Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 25, 2018 | Apr. 19, 2018 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 25, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | DPZ | |
Entity Registrant Name | DOMINOS PIZZA INC | |
Entity Central Index Key | 1,286,681 | |
Current Fiscal Year End Date | --12-30 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 42,281,423 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 25, 2018 | Dec. 31, 2017 | [1] |
Current assets: | |||
Cash and cash equivalents | $ 44,609 | $ 35,768 | |
Restricted cash and cash equivalents | 145,186 | 191,762 | |
Accounts receivable, net | 174,416 | 173,677 | |
Advertising fund assets, restricted | 112,265 | 120,223 | |
Inventories | 41,229 | 39,961 | |
Prepaid expenses and other | 18,718 | 18,389 | |
Total current assets | 536,423 | 579,780 | |
Property, plant and equipment: | |||
Land and buildings | 31,907 | 29,171 | |
Leasehold and other improvements | 131,739 | 128,613 | |
Equipment | 222,439 | 216,599 | |
Construction in progress | 26,689 | 32,482 | |
Property, plant and equipment, Gross | 412,774 | 406,865 | |
Accumulated depreciation and amortization | (243,249) | (237,279) | |
Property, plant and equipment, net | 169,525 | 169,586 | |
Other assets: | |||
Goodwill | 15,423 | 15,423 | |
Capitalized software, net | 55,976 | 52,823 | |
Other assets | 16,884 | 16,391 | |
Deferred income taxes | 4,069 | 2,750 | |
Total other assets | 92,352 | 87,387 | |
Total assets | 798,300 | 836,753 | |
Current liabilities: | |||
Current portion of long-term debt | 32,342 | 32,324 | |
Accounts payable | 88,979 | 106,894 | |
Insurance reserves | 21,466 | 20,754 | |
Dividends payable | 24,006 | 536 | |
Advertising fund liabilities | 105,830 | 120,223 | |
Other accrued liabilities | 112,143 | 117,554 | |
Total current liabilities | 384,766 | 398,285 | |
Long-term liabilities: | |||
Long-term debt, less current portion | 3,117,193 | 3,121,490 | |
Insurance reserves | 31,362 | 30,611 | |
Other accrued liabilities | 35,843 | 21,751 | |
Total long-term liabilities | 3,184,398 | 3,173,852 | |
Stockholders' deficit: | |||
Common stock | 426 | 429 | |
Additional paid-in capital | 137 | 5,654 | |
Retained deficit | (2,768,591) | (2,739,437) | |
Accumulated other comprehensive loss | (2,836) | (2,030) | |
Total stockholders' deficit | (2,770,864) | (2,735,384) | |
Total liabilities and stockholders' deficit | $ 798,300 | $ 836,753 | |
[1] | Note: The balance sheet at December 31, 2017 has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 25, 2018 | Mar. 26, 2017 | |
Revenues: | ||
Revenue | $ 785,371 | $ 624,217 |
Cost of sales: | ||
Cost of sales | 485,506 | 430,401 |
Operating margin | 299,865 | 193,816 |
General and administrative | 84,178 | 77,782 |
Income from operations | 133,476 | 116,034 |
Interest income | 480 | 111 |
Interest expense | (30,286) | (25,631) |
Income before provision for income taxes | 103,670 | 90,514 |
Provision for income taxes | 14,843 | 28,045 |
Net income | $ 88,827 | $ 62,469 |
Earnings per share: | ||
Common stock - basic | $ 2.07 | $ 1.31 |
Common stock - diluted | 2 | 1.26 |
Dividends declared per share | $ 0.55 | $ 0.46 |
Domestic Stores [Member] | Domestic Company Owned Stores [Member] | ||
Revenues: | ||
Revenue | $ 121,186 | $ 113,545 |
Cost of sales: | ||
Cost of sales | 93,038 | 87,184 |
Domestic Stores [Member] | Domestic Franchise Royalties and Fees [Member] | ||
Revenues: | ||
Revenue | 89,490 | 79,901 |
Domestic Stores [Member] | Domestic Franchise Advertising [Member] | ||
Revenues: | ||
Revenue | 82,211 | |
Cost of sales: | ||
Domestic franchise advertising | 82,211 | |
Supply Chain [Member] | ||
Revenues: | ||
Revenue | 440,063 | 388,553 |
Cost of sales: | ||
Cost of sales | 392,468 | 343,217 |
International Franchise [Member] | International Franchise Royalties and Fees [Member] | ||
Revenues: | ||
Revenue | $ 52,421 | $ 42,218 |
Condensed Consolidated Stateme4
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 25, 2018 | Mar. 26, 2017 | |
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 88,827 | $ 62,469 |
Currency translation adjustment | (455) | 67 |
Comprehensive income | $ 88,372 | $ 62,536 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 25, 2018 | Mar. 26, 2017 | ||
Cash flows from operating activities: | |||
Net income | $ 88,827 | $ 62,469 | |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 11,069 | 9,498 | |
Losses on sale/disposal of assets | 365 | 182 | |
Amortization of debt issuance costs | 1,177 | 1,400 | |
Provision for deferred income taxes | 566 | 6,232 | |
Non-cash compensation expense | 6,063 | 5,220 | |
Excess tax benefits from equity-based compensation | (8,410) | (6,498) | |
Other | (57) | (52) | |
Changes in operating assets and liabilities | (15,405) | 7,242 | |
Changes in advertising fund assets and liabilities, restricted | (519) | (9,065) | |
Net cash provided by operating activities | 83,676 | 76,628 | |
Cash flows from investing activities: | |||
Capital expenditures | (13,647) | (12,444) | |
Proceeds from sale of assets | 779 | ||
Maturities of advertising fund investments, restricted | 4,007 | ||
Other | (499) | 544 | |
Net cash used in investing activities | (10,139) | (11,121) | |
Cash flows from financing activities: | |||
Repayments of long-term debt and capital lease obligations | (8,078) | (9,718) | |
Proceeds from exercise of stock options | 3,718 | 1,433 | |
Purchases of common stock | (101,084) | (12,721) | |
Tax payments for restricted stock upon vesting | (2,299) | (4,896) | |
Payments of common stock dividends and equivalents | (79) | (253) | |
Net cash used in financing activities | (107,822) | (26,155) | |
Effect of exchange rate changes on cash | 48 | 32 | |
Change in cash and cash equivalents, restricted cash and cash equivalents | (34,237) | 39,384 | |
Cash and cash equivalents, beginning of period | 35,768 | [1] | 42,815 |
Restricted cash and cash equivalents, beginning of period | 191,762 | [1] | 126,496 |
Cash and cash equivalents included in advertising fund assets, restricted, beginning of period | 27,316 | 25,091 | |
Cash and cash equivalents, restricted cash and cash equivalents and cash and cash equivalents included in advertising fund assets, restricted, beginning of period | 254,846 | 194,402 | |
Cash and cash equivalents, end of period | 44,609 | 52,094 | |
Restricted cash and cash equivalents, end of period | 145,186 | 165,666 | |
Cash and cash equivalents included in advertising fund assets, restricted, end of period | 30,814 | 16,026 | |
Cash and cash equivalents, restricted cash and cash equivalents and cash and cash equivalents included in advertising fund assets, restricted, end of period | $ 220,609 | $ 233,786 | |
[1] | Note: The balance sheet at December 31, 2017 has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. |
Basis of Presentation and Updat
Basis of Presentation and Updates to Significant Accounting Policies | 3 Months Ended |
Mar. 25, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Updates to Significant Accounting Policies | 1. Basis of Presentation and Updates to Significant Accounting Policies The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q 10-01 S-X. 10-K, 10-K”). In the opinion of management, all adjustments, consisting of normal recurring items, considered necessary for a fair statement have been included. Operating results for the fiscal quarter ended March 25, 2018 are not necessarily indicative of the results that may be expected for the fiscal year ending December 30, 2018. Reclassification of Revenues Beginning in the first quarter of 2018, the Company began managing its franchised stores in Alaska and Hawaii as part of its Domestic Stores segment (Note 2). Prior to 2018, the revenues from these franchised stores were included in the Company’s International Franchise segment (Note 2). International franchise revenues for the first quarter of 2017 include $0.6 million of franchise revenues related to these stores. These amounts have not been reclassified to conform to the current year presentation due to immateriality. Updates to Significant Accounting Policies The Company adopted Accounting Standards Codification 606, Revenue from Contracts with Customers Revenue Recognition Domestic Company-owned stores revenues were $121.2 million in the first quarter of 2018 and were comprised of retail sales of food through Company-owned Domino’s Pizza stores located in the United States. Domestic Company-owned store revenues are recognized when the items are delivered to or carried out by customers and customer payments are generally due at the time of sale. Sales taxes related to these sales are collected from customers and remitted to the appropriate taxing authority and are not reflected in the Company’s condensed consolidated statements of income as revenue. Domestic franchise royalties and fees were $89.5 million in the first quarter of 2018 and are primarily comprised of royalties and fees from Domino’s Pizza franchisees with operations in the United States. Royalty revenues are based on a percentage of franchise sales and are recognized when the items are delivered to or carried out by franchise customers. Domestic franchise fee revenue primarily relates to per-transaction Supply chain revenues were $440.1 million in the first quarter of 2018 and were primarily comprised of sales of food, equipment and supplies to franchised Domino’s Pizza stores located in the United States and Canada. Revenues from the sale of food are recognized upon delivery of the food to franchisees and payments for food purchases are generally due within 30 days of the shipping date. Revenues from the sale of equipment and supplies are recognized upon delivery or shipment of the related products to franchisees, based on shipping terms, and payments for equipment and supplies are generally due within 90 days of the shipping date. The Company also offers profit sharing rebates and volume discounts to its supply chain customers. Obligations for profit sharing rebates are calculated each period based on actual results of its supply chain centers and are recognized as a reduction to revenue. Volume discounts are based on annual sales. Each period, the Company estimates the amount that will be earned and records a reduction to revenue. International franchise royalties and fees were $52.4 million in the first quarter of 2018 and were primarily comprised of royalties and fees from Domino’s Pizza franchisees outside of the United States. Royalty revenues are recognized when the items are delivered to or carried out by franchise customers. Store opening fees received from international franchisees are recognized as revenue on a straight-line basis over the term of each respective franchise store agreement, which is typically 10 years. Development fees received from international master franchisees are also deferred when amounts are received and are recognized as revenue on a straight-line basis over the term of the respective master franchise agreement. International franchise royalties and fees are invoiced at least quarterly and payments are generally due within 60 days. As of January 1, 2018 and March 25, 2018, the contract liability recorded for store opening fees and development fees was $19.4 million and $18.9 million, respectively. During the first quarter of 2018, the Company recognized $1.1 million in revenue related to development fees and store opening fees. Domestic franchise advertising revenues were $82.2 million in the first quarter of 2018 and are primarily comprised of contributions from Domino’s Pizza franchisees with operations in the United States to the Domino’s National Advertising Fund Inc. (“DNAF”), the Company’s not-for-profit Advertising Costs Domestic Stores (Note 2) are required to contribute a certain percentage of sales to DNAF. Domestic franchise advertising costs are accrued and expensed when the related domestic franchise advertising revenues are recognized, as DNAF is obligated to expend such revenues on advertising. Advertising costs funded by our Company-owned stores are generally expensed as incurred and are included in general and administrative expense. The contributions from Company-owned stores that have not yet been expended are included in advertising fund assets, restricted, on the Company’s consolidated balance sheet. As of March 25, 2018, advertising fund assets, restricted of $112.3 million includes approximately $6.5 million of Company-owned store contributions that had not yet been expended and approximately $105.8 million which primarily consists of cash, investments and accounts receivable from our domestic franchisees. |
Segment Information
Segment Information | 3 Months Ended |
Mar. 25, 2018 | |
Segment Reporting [Abstract] | |
Segment Information | 2. Segment Information The following table summarizes revenues, income from operations and earnings before interest, taxes, depreciation, amortization and other, which is the measure by which the Company allocates resources to its segments and which the Company refers to as Segment Income, for each of its reportable segments. Fiscal Quarters Ended March 25, 2018 and March 26, 2017 Domestic Supply International Intersegment Other Total Revenues 2018 $ 292,887 $ 473,956 $ 52,421 $ (33,893 ) $ — $ 785,371 2017 193,446 420,006 42,218 (31,453 ) — 624,217 Income from operations 2018 $ 75,289 $ 37,372 $ 41,524 N/A $ (20,709 ) $ 133,476 2017 67,327 35,959 33,174 N/A (20,426 ) 116,034 Segment Income 2018 $ 78,344 $ 40,156 $ 41,572 N/A $ (9,099 ) $ 150,973 2017 69,874 38,514 33,218 N/A (10,672 ) 130,934 (1) The Domestic Stores segment includes $82.2 million in revenues related to franchise advertising contributions in the first quarter of 2018 due to the adoption of ASC 606 (Note 12). These contributions did not have an impact on income from operations or Segment Income. (2) The International Franchise segment includes $0.6 million in revenues, income from operations and Segment Income in the first quarter of 2017 related to franchised stores in Alaska and Hawaii that are managed as part of the Company’s Domestic Stores business beginning in the first quarter of 2018. The following table reconciles Total Segment Income to consolidated income before provision for income taxes. Fiscal Quarter Ended March 25, March 26, 2018 2017 Total Segment Income $ 150,973 $ 130,934 Depreciation and amortization (11,069 ) (9,498 ) Losses on sale/disposal of assets (365 ) (182 ) Non-cash (6,063 ) (5,220 ) Income from operations 133,476 116,034 Interest income 480 111 Interest expense (30,286 ) (25,631 ) Income before provision for income taxes $ 103,670 $ 90,514 |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 25, 2018 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | 3. Earnings Per Share Fiscal Quarter Ended March 25, March 26, 2018 2017 Net income available to common stockholders – basic and diluted $ 88,827 $ 62,469 Basic weighted average number of shares 42,822,112 47,839,847 Earnings per share – basic $ 2.07 $ 1.31 Diluted weighted average number of shares 44,377,509 49,706,023 Earnings per share – diluted $ 2.00 $ 1.26 The denominator used in calculating diluted earnings per share for common stock for the first quarter of 2018 does not include 87,420 options to purchase common stock, as the effect of including these options would have been anti-dilutive. The denominator used in calculating diluted earnings per share for the first quarter of 2018 did not include 117,062 restricted performance shares, as the performance targets for these awards had not yet been met. The denominator used in calculating diluted earnings per share for common stock for the first quarter of 2017 does not include 69,010 options to purchase common stock as the effect of including these options would have been anti-dilutive. The denominator used in calculating diluted earnings per share for the first quarter of 2017 did not include 142,009 restricted performance shares, as the performance targets for these awards had not yet been met. |
Stockholders' Deficit
Stockholders' Deficit | 3 Months Ended |
Mar. 25, 2018 | |
Equity [Abstract] | |
Stockholders' Deficit | 4. Stockholders’ Deficit The following table summarizes changes in Stockholders’ Deficit for the first quarter of 2018. Accumulated Additional Other Common Stock Paid-in Retained Comprehensive Shares Amount Capital Deficit Loss Balance at December 31, 2017 42,898,329 $ 429 $ 5,654 $ (2,739,437 ) $ (2,030 ) Net income — — — 88,827 — Common stock dividends and equivalents — — — (23,549 ) — Issuance of common stock, net 9,282 — — — — Tax payments for restricted stock upon vesting (10,237 ) — (2,299 ) — — Purchases of common stock (448,008 ) (5 ) (12,997 ) (88,082 ) — Exercise of stock options 176,515 2 3,716 — — Non-cash — — 6,063 — — Adoption of ASC 606 (Note 12) — — — (6,701 ) — Currency translation adjustment — — — — (455 ) Reclassification adjustment for stranded taxes (Note 12) — — — 351 (351 ) Balance at March 25, 2018 42,625,881 $ 426 $ 137 $ (2,768,591 ) $ (2,836 ) |
Dividends
Dividends | 3 Months Ended |
Mar. 25, 2018 | |
Statement of Stockholders' Equity [Abstract] | |
Dividends | 5. Dividends During the first quarter of 2018, on February 14, 2018, the Company’s Board of Directors declared a $0.55 per share quarterly dividend on its outstanding common stock for shareholders of record as of March 15, 2018 which was paid on March 30, 2018. The Company had approximately $24.0 million accrued for common stock dividends at March 25, 2018. Subsequent to the first quarter, on April 24, 2018, the Company’s Board of Directors declared a $0.55 per share quarterly dividend on its outstanding common stock for shareholders of record as of June 15, 2018 to be paid on June 29, 2018. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 3 Months Ended |
Mar. 25, 2018 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Loss | 6. Accumulated Other Comprehensive Loss Accumulated other comprehensive loss was approximately $2.8 million at March 25, 2018 and was approximately $2.0 million as of December 31, 2017 and represented currency translation adjustments, net of tax. During the first quarter of 2018, the Company adopted ASU 2018-02, Income Statement – Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income |
Recapitalization
Recapitalization | 3 Months Ended |
Mar. 25, 2018 | |
Debt Disclosure [Abstract] | |
Recapitalization | 7. Recapitalization On April 24, 2018, the Company completed a recapitalization (the “2018 Recapitalization”) in which certain of the Company’s subsidiaries issued new notes pursuant to an asset-backed securitization. The new notes consist of $425.0 million Series 2018-1 Class A-2-I A-2-I 2018-1 Class A-2-II A-2-II A-2-I |
Open Market Share Repurchase Pr
Open Market Share Repurchase Program | 3 Months Ended |
Mar. 25, 2018 | |
Equity [Abstract] | |
Open Market Share Repurchase Program | 8. Open Market Share Repurchase Program During the first quarter of 2018, the Company repurchased and retired 448,008 shares of its common stock under its Board of Directors-approved open market share repurchase program for a total of approximately $101.1 million, or an average price of $225.63 per share. As of March 25, 2018, the end of the first quarter, the Company had a total remaining authorized amount for share repurchases of approximately $648.9 million. Subsequent to the first quarter of 2018, the Company repurchased and retired an additional 351,699 shares of common stock for a total of approximately $81.3 million, or an average price of $231.25 per share. During the first quarter of 2017, the Company repurchased and retired 80,360 shares of its common stock under its Board of Directors-approved open market share repurchase program for approximately $12.7 million, or an average price of $158.30 per share. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 25, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 9. Fair Value Measurements Fair value measurements enable the reader of the financial statements to assess the inputs used to develop those measurements by establishing a hierarchy for ranking the quality and reliability of the information used to determine fair values. The Company classifies and discloses assets and liabilities carried at fair value in one of the following three categories: Level 1: Quoted market prices in active markets for identical assets or liabilities. Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data. Level 3: Unobservable inputs that are not corroborated by market data. The fair values of the Company’s cash equivalents and investments in marketable securities are based on quoted prices in active markets for identical assets. The following tables summarize the carrying amounts and fair values of certain assets at March 25, 2018 and December 31, 2017: At March 25, 2018 Fair Value Estimated Using Carrying Level 1 Level 2 Level 3 Amount Inputs Inputs Inputs Cash equivalents $ 32,221 $ 32,221 $ — $ — Restricted cash equivalents 91,137 91,137 — — Investments in marketable securities 8,669 8,669 — — Advertising fund cash equivalents, restricted 18,502 18,502 — — Advertising fund investments, restricted 70,000 70,000 — — At December 31, 2017 Fair Value Estimated Using Carrying Level 1 Level 2 Level 3 Amount Inputs Inputs Inputs Cash equivalents $ 7,933 $ 7,933 $ — $ — Restricted cash equivalents 96,375 96,375 — — Investments in marketable securities 8,119 8,119 — — Advertising fund cash equivalents, restricted 19,945 19,945 — — Advertising fund investments, restricted 74,007 74,007 — — Management estimated the approximate fair values of the 2015 fixed rate notes and the 2017 fixed and floating rate notes as follows (in thousands): March 25, 2018 December 31, 2017 Principal Fair Value Principal Fair Value 2015 Five-Year Fixed Rate Notes $ 491,250 $ 490,268 $ 492,500 $ 494,470 2015 Ten-Year 786,000 811,938 788,000 821,884 2017 Five-Year Fixed Rate Notes 597,000 583,269 598,500 592,515 2017 Ten-Year 995,000 998,980 997,500 1,023,435 2017 Five-Year Floating Rate Notes 298,500 299,694 299,250 300,746 The fixed and floating rate notes are classified as Level 2 measurements, as the Company estimates the fair value amount by using available market information. The Company obtained quotes from two separate brokerage firms that are knowledgeable about the Company’s fixed and floating rate notes and, at times, trade these notes. The Company also performed its own internal analysis based on the information gathered from public markets, including information on notes that are similar to those of the Company. However, considerable judgment is required to interpret market data to estimate fair value. Accordingly, the fair value estimates presented are not necessarily indicative of the amount that the Company or the debtholders could realize in a current market exchange. The use of different assumptions and/or estimation methodologies may have a material effect on the estimated fair values stated above. |
Legal Matters
Legal Matters | 3 Months Ended |
Mar. 25, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Legal Matters | 10. Legal Matters On February 14, 2011, Domino’s Pizza LLC was named as a defendant in a lawsuit along with Fischler Enterprises of C.F., Inc., a franchisee, and Jeffrey S. Kidd, the franchisee’s delivery driver, filed by Yvonne Wiederhold, the plaintiff, as Personal Representative of the Estate of Richard E. Wiederhold, deceased. The case involved a traffic accident in which the franchisee’s delivery driver is alleged to have caused an accident involving a vehicle driven by Richard Wiederhold. Mr. Wiederhold sustained spinal injuries resulting in quadriplegia and passed away several months after the accident. The jury returned a $10.1 million judgment for the plaintiff where the Company and Mr. Kidd were found to be 90% liable (after certain offsets and other deductions the final verdict was $8.9 million). In the second quarter of 2016, the trial court ruled on all post-judgment motions and entered the judgment. The Company denies liability and in the third quarter of 2016 filed an appeal of the verdict on a variety of grounds. The Company continues to deny liability in this matter. |
Supplemental Disclosures of Cas
Supplemental Disclosures of Cash Flow Information | 3 Months Ended |
Mar. 25, 2018 | |
Supplemental Cash Flow Elements [Abstract] | |
Supplemental Disclosures of Cash Flow Information | 11. Supplemental Disclosures of Cash Flow Information The Company had non-cash non-cash |
New Accounting Pronouncements
New Accounting Pronouncements | 3 Months Ended |
Mar. 25, 2018 | |
Accounting Changes and Error Corrections [Abstract] | |
New Accounting Pronouncements | 12. New Accounting Pronouncements Recently Adopted Accounting Standards Accounting Standards Update 2014-09, Revenue In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update 2014-09, Revenue from Contracts with Customers (Topic 606) The Company recognized the cumulative effect of initially applying ASC 606 as an adjustment to the opening balance of retained deficit. The comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods. The Company has determined that the store opening fees received from international franchisees do not relate to separate and distinct performance obligations from the franchise right and those upfront fees will therefore be recognized as revenue over the term of each respective franchise store agreement, which is typically 10 years. In the past, the Company recognized such fees as revenue when the related store opened. An adjustment to beginning retained deficit and a corresponding contract liability of approximately $15.0 million (of which $2.4 million is current and $12.6 million is long-term) was established on the date of adoption associated with the fees received through December 31, 2017 that would have been deferred and recognized over the term of each respective franchise store agreement if the new guidance had been applied in the past. A deferred tax asset of $3.5 million related to this contract liability was also established on the date of adoption. The Company has also determined that ASC 606 requires a gross presentation on the consolidated statement of income for franchisee contributions received by and related expenses of DNAF, the Company’s consolidated not-for-profit subsidiary. Upon the adoption of ASC 606, the Company determined that there are not performance obligations associated with the franchise advertising contributions received by DNAF that are separate from our domestic royalty payment stream and as a result, these franchise contributions and the related expenses are presented gross in the Company’s consolidated statement of income and consolidated statement of cash flows. While this change will materially impact the gross amount of reported franchise revenues and expenses, the impact will generally be an offsetting increase to both revenues and expenses such that the impact on income from operations and net income is not expected to be material. An adjustment to beginning retained deficit and advertising fund liabilities of approximately $6.4 million related to the timing of advertising expense recognition was recorded on the date of adoption. A deferred tax liability (which is reflected net against deferred tax assets in the consolidated balance sheet) of approximately $1.6 million related to this adjustment was also established on the date of adoption. The cumulative effect of the changes made to our consolidated balance sheet as of January 1, 2018 for the adoption of ASC 606 were as follows (in thousands): Balance at Adjustments Balance at Assets Other assets: Deferred income taxes $ 2,750 $ 1,878 $ 4,628 Liabilities and stockholders’ deficit Current liabilities: Advertising fund liabilities 120,223 (6,425 ) 113,798 Other accrued liabilities 58,578 2,365 60,943 Long-term liabilities: Other accrued liabilities 21,751 12,639 34,390 Stockholders’ deficit: Retained deficit (2,739,437 ) (6,701 ) (2,746,138 ) In accordance with the new revenue standard requirements, the disclosure of the impact of adoption on the Company’s condensed consolidated statement of income and condensed consolidated balance sheet for the period ended March 25, 2018 was as follows (in thousands): First Quarter As Reported Balances Effect of (Lower) Revenues: Domestic franchise royalties and fees $ 89,490 $ 94,068 $ (4,578 ) International franchise royalties and fees 52,421 52,383 38 Domestic franchise advertising 82,211 — 82,211 General and administrative 84,178 88,746 (4,568 ) Domestic franchise advertising 82,211 — 82,211 Income from operations 133,476 133,428 48 Income before provision for income taxes 103,670 103,622 48 Provision for income taxes 14,843 14,832 11 Net income 88,827 88,790 37 As Reported Balances Effect of Assets Other assets: Deferred income taxes $ 4,069 $ 2,202 $ 1,867 Liabilities and stockholders’ deficit Current liabilities: Advertising fund liabilities 105,830 112,265 (6,435 ) Other accrued liabilities 112,143 109,747 2,396 Long-term liabilities: Other accrued liabilities 35,843 23,273 12,570 Stockholders’ deficit: Retained deficit (2,768,591 ) (2,761,927 ) (6,664 ) ASU 2016-04, 405-20) In March 2016, the FASB issued ASU 2016-04, Liabilities – Extinguishment of Liabilities (Subtopic 405-20): Recognition of Breakage for Certain Prepaid Stored-Value Products 2016-04”). ASU 2016-04 aligns for non-financial liabilities. ASU 2016-18, Statement In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (“ASU 2016-18”), which ASU 2016-18 is ASU 2018-02, 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 Accounting Standards Not Yet Adopted The Company has considered all new accounting pronouncements issued by the FASB and concluded the following accounting pronouncements may have a material impact on its consolidated financial statements, or represent accounting pronouncements for which the Company has not yet completed its assessment. ASU 2016-02, In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) 2016-02”). ASU 2016-02 requires ASU 2016-02 is of right-of-use assets Form 10-K. ASU 2016-13, In June 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments (Topic 326): Measurement of Credit Losses on Financial Instruments 2016-13”). ASU 2016-13 requires ASU 2016-13 is ASU 2017-04, In January 2017, the FASB issued ASU 2017-04 , Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment (“ASU 2017-04”). ASU 2017-04 simplifies ASU 2017-04 is |
Basis of Presentation and Upd18
Basis of Presentation and Updates to Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 25, 2018 | |
Accounting Policies [Abstract] | |
Revenue Recognition | Revenue Recognition Domestic Company-owned stores revenues were $121.2 million in the first quarter of 2018 and were comprised of retail sales of food through Company-owned Domino’s Pizza stores located in the United States. Domestic Company-owned store revenues are recognized when the items are delivered to or carried out by customers and customer payments are generally due at the time of sale. Sales taxes related to these sales are collected from customers and remitted to the appropriate taxing authority and are not reflected in the Company’s condensed consolidated statements of income as revenue. Domestic franchise royalties and fees were $89.5 million in the first quarter of 2018 and are primarily comprised of royalties and fees from Domino’s Pizza franchisees with operations in the United States. Royalty revenues are based on a percentage of franchise sales and are recognized when the items are delivered to or carried out by franchise customers. Domestic franchise fee revenue primarily relates to per-transaction Supply chain revenues were $440.1 million in the first quarter of 2018 and were primarily comprised of sales of food, equipment and supplies to franchised Domino’s Pizza stores located in the United States and Canada. Revenues from the sale of food are recognized upon delivery of the food to franchisees and payments for food purchases are generally due within 30 days of the shipping date. Revenues from the sale of equipment and supplies are recognized upon delivery or shipment of the related products to franchisees, based on shipping terms, and payments for equipment and supplies are generally due within 90 days of the shipping date. The Company also offers profit sharing rebates and volume discounts to its supply chain customers. Obligations for profit sharing rebates are calculated each period based on actual results of its supply chain centers and are recognized as a reduction to revenue. Volume discounts are based on annual sales. Each period, the Company estimates the amount that will be earned and records a reduction to revenue. International franchise royalties and fees were $52.4 million in the first quarter of 2018 and were primarily comprised of royalties and fees from Domino’s Pizza franchisees outside of the United States. Royalty revenues are recognized when the items are delivered to or carried out by franchise customers. Store opening fees received from international franchisees are recognized as revenue on a straight-line basis over the term of each respective franchise store agreement, which is typically 10 years. Development fees received from international master franchisees are also deferred when amounts are received and are recognized as revenue on a straight-line basis over the term of the respective master franchise agreement. International franchise royalties and fees are invoiced at least quarterly and payments are generally due within 60 days. As of January 1, 2018 and March 25, 2018, the contract liability recorded for store opening fees and development fees was $19.4 million and $18.9 million, respectively. During the first quarter of 2018, the Company recognized $1.1 million in revenue related to development fees and store opening fees. Domestic franchise advertising revenues were $82.2 million in the first quarter of 2018 and are primarily comprised of contributions from Domino’s Pizza franchisees with operations in the United States to the Domino’s National Advertising Fund Inc. (“DNAF”), the Company’s not-for-profit |
Advertising Costs | Advertising Costs Domestic Stores (Note 2) are required to contribute a certain percentage of sales to DNAF. Domestic franchise advertising costs are accrued and expensed when the related domestic franchise advertising revenues are recognized, as DNAF is obligated to expend such revenues on advertising. Advertising costs funded by our Company-owned stores are generally expensed as incurred and are included in general and administrative expense. The contributions from Company-owned stores that have not yet been expended are included in advertising fund assets, restricted, on the Company’s consolidated balance sheet. As of March 25, 2018, advertising fund assets, restricted of $112.3 million includes approximately $6.5 million of Company-owned store contributions that had not yet been expended and approximately $105.8 million which primarily consists of cash, investments and accounts receivable from our domestic franchisees. |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 25, 2018 | |
Segment Reporting [Abstract] | |
Financial Information by Operating Segment | The following table summarizes revenues, income from operations and earnings before interest, taxes, depreciation, amortization and other, which is the measure by which the Company allocates resources to its segments and which the Company refers to as Segment Income, for each of its reportable segments. Fiscal Quarters Ended March 25, 2018 and March 26, 2017 Domestic Supply International Intersegment Other Total Revenues 2018 $ 292,887 $ 473,956 $ 52,421 $ (33,893 ) $ — $ 785,371 2017 193,446 420,006 42,218 (31,453 ) — 624,217 Income from operations 2018 $ 75,289 $ 37,372 $ 41,524 N/A $ (20,709 ) $ 133,476 2017 67,327 35,959 33,174 N/A (20,426 ) 116,034 Segment Income 2018 $ 78,344 $ 40,156 $ 41,572 N/A $ (9,099 ) $ 150,973 2017 69,874 38,514 33,218 N/A (10,672 ) 130,934 (1) The Domestic Stores segment includes $82.2 million in revenues related to franchise advertising contributions in the first quarter of 2018 due to the adoption of ASC 606 (Note 12). These contributions did not have an impact on income from operations or Segment Income. (2) The International Franchise segment includes $0.6 million in revenues, income from operations and Segment Income in the first quarter of 2017 related to franchised stores in Alaska and Hawaii that are managed as part of the Company’s Domestic Stores business beginning in the first quarter of 2018. |
Reconciliation of Total Segment Income to Consolidated Income Before Provision for Income Taxes | The following table reconciles Total Segment Income to consolidated income before provision for income taxes. Fiscal Quarter Ended March 25, March 26, 2018 2017 Total Segment Income $ 150,973 $ 130,934 Depreciation and amortization (11,069 ) (9,498 ) Losses on sale/disposal of assets (365 ) (182 ) Non-cash (6,063 ) (5,220 ) Income from operations 133,476 116,034 Interest income 480 111 Interest expense (30,286 ) (25,631 ) Income before provision for income taxes $ 103,670 $ 90,514 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 25, 2018 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Fiscal Quarter Ended March 25, March 26, 2018 2017 Net income available to common stockholders – basic and diluted $ 88,827 $ 62,469 Basic weighted average number of shares 42,822,112 47,839,847 Earnings per share – basic $ 2.07 $ 1.31 Diluted weighted average number of shares 44,377,509 49,706,023 Earnings per share – diluted $ 2.00 $ 1.26 |
Stockholders' Deficit (Tables)
Stockholders' Deficit (Tables) | 3 Months Ended |
Mar. 25, 2018 | |
Equity [Abstract] | |
Changes in Stockholders' Deficit | The following table summarizes changes in Stockholders’ Deficit for the first quarter of 2018. Accumulated Additional Other Common Stock Paid-in Retained Comprehensive Shares Amount Capital Deficit Loss Balance at December 31, 2017 42,898,329 $ 429 $ 5,654 $ (2,739,437 ) $ (2,030 ) Net income — — — 88,827 — Common stock dividends and equivalents — — — (23,549 ) — Issuance of common stock, net 9,282 — — — — Tax payments for restricted stock upon vesting (10,237 ) — (2,299 ) — — Purchases of common stock (448,008 ) (5 ) (12,997 ) (88,082 ) — Exercise of stock options 176,515 2 3,716 — — Non-cash — — 6,063 — — Adoption of ASC 606 (Note 12) — — — (6,701 ) — Currency translation adjustment — — — — (455 ) Reclassification adjustment for stranded taxes (Note 12) — — — 351 (351 ) Balance at March 25, 2018 42,625,881 $ 426 $ 137 $ (2,768,591 ) $ (2,836 ) |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 25, 2018 | |
Fair Value Disclosures [Abstract] | |
Carrying Amounts and Fair Values of Certain Assets | The fair values of the Company’s cash equivalents and investments in marketable securities are based on quoted prices in active markets for identical assets. The following tables summarize the carrying amounts and fair values of certain assets at March 25, 2018 and December 31, 2017: At March 25, 2018 Fair Value Estimated Using Carrying Level 1 Level 2 Level 3 Amount Inputs Inputs Inputs Cash equivalents $ 32,221 $ 32,221 $ — $ — Restricted cash equivalents 91,137 91,137 — — Investments in marketable securities 8,669 8,669 — — Advertising fund cash equivalents, restricted 18,502 18,502 — — Advertising fund investments, restricted 70,000 70,000 — — At December 31, 2017 Fair Value Estimated Using Carrying Level 1 Level 2 Level 3 Amount Inputs Inputs Inputs Cash equivalents $ 7,933 $ 7,933 $ — $ — Restricted cash equivalents 96,375 96,375 — — Investments in marketable securities 8,119 8,119 — — Advertising fund cash equivalents, restricted 19,945 19,945 — — Advertising fund investments, restricted 74,007 74,007 — — |
Schedule of Estimated Fair Value | Management estimated the approximate fair values of the 2015 fixed rate notes and the 2017 fixed and floating rate notes as follows (in thousands): March 25, 2018 December 31, 2017 Principal Fair Value Principal Fair Value 2015 Five-Year Fixed Rate Notes $ 491,250 $ 490,268 $ 492,500 $ 494,470 2015 Ten-Year 786,000 811,938 788,000 821,884 2017 Five-Year Fixed Rate Notes 597,000 583,269 598,500 592,515 2017 Ten-Year 995,000 998,980 997,500 1,023,435 2017 Five-Year Floating Rate Notes 298,500 299,694 299,250 300,746 |
New Accounting Pronouncements (
New Accounting Pronouncements (Tables) | 3 Months Ended |
Mar. 25, 2018 | |
Accounting Changes and Error Corrections [Abstract] | |
Cumulative Effect of Changes Made to Consolidated Balance Sheet | The cumulative effect of the changes made to our consolidated balance sheet as of January 1, 2018 for the adoption of ASC 606 were as follows (in thousands): Balance at Adjustments Balance at Assets Other assets: Deferred income taxes $ 2,750 $ 1,878 $ 4,628 Liabilities and stockholders’ deficit Current liabilities: Advertising fund liabilities 120,223 (6,425 ) 113,798 Other accrued liabilities 58,578 2,365 60,943 Long-term liabilities: Other accrued liabilities 21,751 12,639 34,390 Stockholders’ deficit: Retained deficit (2,739,437 ) (6,701 ) (2,746,138 ) |
Impact of Adoption on Company's Condensed Consolidated Statement of Income and Condensed Consolidated Balance Sheet | In accordance with the new revenue standard requirements, the disclosure of the impact of adoption on the Company’s condensed consolidated statement of income and condensed consolidated balance sheet for the period ended March 25, 2018 was as follows (in thousands): First Quarter As Reported Balances Effect of (Lower) Revenues: Domestic franchise royalties and fees $ 89,490 $ 94,068 $ (4,578 ) International franchise royalties and fees 52,421 52,383 38 Domestic franchise advertising 82,211 — 82,211 General and administrative 84,178 88,746 (4,568 ) Domestic franchise advertising 82,211 — 82,211 Income from operations 133,476 133,428 48 Income before provision for income taxes 103,670 103,622 48 Provision for income taxes 14,843 14,832 11 Net income 88,827 88,790 37 As Reported Balances Effect of Assets Other assets: Deferred income taxes $ 4,069 $ 2,202 $ 1,867 Liabilities and stockholders’ deficit Current liabilities: Advertising fund liabilities 105,830 112,265 (6,435 ) Other accrued liabilities 112,143 109,747 2,396 Long-term liabilities: Other accrued liabilities 35,843 23,273 12,570 Stockholders’ deficit: Retained deficit (2,768,591 ) (2,761,927 ) (6,664 ) |
Basis of Presentation and Upd24
Basis of Presentation and Updates to Significant Accounting Policies - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 25, 2018 | Mar. 26, 2017 | Dec. 31, 2017 | ||
Basis of Presentation [Line Items] | ||||
Revenue | $ 785,371 | $ 624,217 | ||
Advertising fund assets, restricted | 112,265 | $ 120,223 | [1] | |
Store Opening and Development Fees [Member] | ||||
Basis of Presentation [Line Items] | ||||
Revenue | 1,100 | |||
Contract liability | 18,900 | $ 19,400 | ||
International Franchise [Member] | Alaska and Hawaii [Member] | ||||
Basis of Presentation [Line Items] | ||||
Revenue | 600 | |||
International Franchise [Member] | International Franchise Royalties and Fees [Member] | ||||
Basis of Presentation [Line Items] | ||||
Revenue | 52,421 | 42,218 | ||
Domestic Stores [Member] | Domestic Franchise [Member] | ||||
Basis of Presentation [Line Items] | ||||
Advertising fund assets, restricted | 105,800 | |||
Domestic Stores [Member] | Domestic Company Owned Stores [Member] | ||||
Basis of Presentation [Line Items] | ||||
Revenue | 121,186 | 113,545 | ||
Advertising fund assets, restricted | 6,500 | |||
Domestic Stores [Member] | Domestic Franchise Royalties and Fees [Member] | ||||
Basis of Presentation [Line Items] | ||||
Revenue | 89,490 | 79,901 | ||
Domestic Stores [Member] | Domestic Franchise Advertising [Member] | ||||
Basis of Presentation [Line Items] | ||||
Revenue | 82,211 | |||
Supply Chain [Member] | ||||
Basis of Presentation [Line Items] | ||||
Revenue | $ 440,063 | $ 388,553 | ||
[1] | Note: The balance sheet at December 31, 2017 has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. |
Financial Information by Operat
Financial Information by Operating Segment (Detail) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 25, 2018 | Mar. 26, 2017 | ||
Segment Reporting Information [Line Items] | |||
Revenues | $ 785,371 | $ 624,217 | |
Income from operations | 133,476 | 116,034 | |
Segment Income | 150,973 | 130,934 | |
Supply Chain [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenues | 440,063 | 388,553 | |
Operating Segments [Member] | Domestic Stores [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenues | [1] | 292,887 | 193,446 |
Income from operations | [1] | 75,289 | 67,327 |
Segment Income | [1] | 78,344 | 69,874 |
Operating Segments [Member] | Supply Chain [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenues | 473,956 | 420,006 | |
Income from operations | 37,372 | 35,959 | |
Segment Income | 40,156 | 38,514 | |
Operating Segments [Member] | International Franchise [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenues | [2] | 52,421 | 42,218 |
Income from operations | [2] | 41,524 | 33,174 |
Segment Income | [2] | 41,572 | 33,218 |
Intersegment Revenues [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenues | (33,893) | (31,453) | |
Segment Reconciling [Member] | |||
Segment Reporting Information [Line Items] | |||
Income from operations | (20,709) | (20,426) | |
Segment Income | $ (9,099) | $ (10,672) | |
[1] | The Domestic Stores segment includes $82.2 million in revenues related to franchise advertising contributions in the first quarter of 2018 due to the adoption of ASC 606 (Note 12). These contributions did not have an impact on income from operations or Segment Income. | ||
[2] | The International Franchise segment includes $0.6 million in revenues, income from operations and Segment Income in the first quarter of 2017 related to franchised stores in Alaska and Hawaii that are managed as part of the Company's Domestic Stores business beginning in the first quarter of 2018. |
Financial Information by Oper26
Financial Information by Operating Segment (Parenthetical) (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 25, 2018 | Mar. 26, 2017 | |
Segment Reporting Information [Line Items] | ||
Revenue | $ 785,371 | $ 624,217 |
Domestic Stores [Member] | Domestic Franchise Advertising [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenue | $ 82,211 | |
Alaska and Hawaii [Member] | International Franchise [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenue | $ 600 |
Reconciliation of Total Segment
Reconciliation of Total Segment Income to Consolidated Income Before Provision for Income Taxes (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 25, 2018 | Mar. 26, 2017 | |
Segment Reconciliation [Abstract] | ||
Total Segment Income | $ 150,973 | $ 130,934 |
Depreciation and amortization | (11,069) | (9,498) |
Losses on sale/disposal of assets | (365) | (182) |
Non-cash compensation expense | (6,063) | (5,220) |
Income from operations | 133,476 | 116,034 |
Interest income | 480 | 111 |
Interest expense | (30,286) | (25,631) |
Income before provision for income taxes | $ 103,670 | $ 90,514 |
Earnings Per Share (Detail)
Earnings Per Share (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 25, 2018 | Mar. 26, 2017 | |
Earnings Per Share [Abstract] | ||
Net income available to common stockholders - basic and diluted | $ 88,827 | $ 62,469 |
Basic weighted average number of shares | 42,822,112 | 47,839,847 |
Earnings per share - basic | $ 2.07 | $ 1.31 |
Diluted weighted average number of shares | 44,377,509 | 49,706,023 |
Earnings per share - diluted | $ 2 | $ 1.26 |
Earnings Per Share - Additional
Earnings Per Share - Additional Information (Detail) - shares | 3 Months Ended | |
Mar. 25, 2018 | Mar. 26, 2017 | |
Stock Option [Member] | ||
Earnings Per Share [Line Items] | ||
Anti-dilutive Securities Excluded from Computation of Earnings Per Share | 87,420 | 69,010 |
Restricted Performance Shares [Member] | ||
Earnings Per Share [Line Items] | ||
Securities excluded from computation of earnings per share, amount unvested | 117,062 | 142,009 |
Changes in Stockholders' Defici
Changes in Stockholders' Deficit (Detail) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 25, 2018 | Mar. 26, 2017 | ||
Stockholders' Deficit [Line Items] | |||
Beginning Balance | [1] | $ (2,735,384) | |
Net income | 88,827 | $ 62,469 | |
Ending Balance | $ (2,770,864) | ||
Common Stock [Member] | |||
Stockholders' Deficit [Line Items] | |||
Beginning Balance, (in shares) | 42,898,329 | ||
Beginning Balance | $ 429 | ||
Issuance of common stock, net, (in shares) | 9,282 | ||
Issuance of common stock, net | $ 0 | ||
Tax payments for restricted stock upon vesting, (in shares) | (10,237) | ||
Purchases of common stock, (in shares) | (448,008) | ||
Purchases of common stock | $ (5) | ||
Exercise of stock options, (in shares) | 176,515 | ||
Exercise of stock options | $ 2 | ||
Ending Balance, (in shares) | 42,625,881 | ||
Ending Balance | $ 426 | ||
Additional Paid-in Capital [Member] | |||
Stockholders' Deficit [Line Items] | |||
Beginning Balance | 5,654 | ||
Issuance of common stock, net | 0 | ||
Tax payments for restricted stock upon vesting | (2,299) | ||
Purchases of common stock | (12,997) | ||
Exercise of stock options | 3,716 | ||
Non-cash compensation expense | 6,063 | ||
Ending Balance | 137 | ||
Retained Deficit [Member] | |||
Stockholders' Deficit [Line Items] | |||
Beginning Balance | (2,739,437) | ||
Net income | 88,827 | ||
Common stock dividends and equivalents | (23,549) | ||
Issuance of common stock, net | 0 | ||
Purchases of common stock | (88,082) | ||
Adoption of ASC 606 (Note 12) | (6,701) | ||
Reclassification adjustment for stranded taxes (Note 12) | 351 | ||
Ending Balance | (2,768,591) | ||
Accumulated Other Comprehensive Loss [Member] | |||
Stockholders' Deficit [Line Items] | |||
Beginning Balance | (2,030) | ||
Issuance of common stock, net | 0 | ||
Currency translation adjustment | (455) | ||
Reclassification adjustment for stranded taxes (Note 12) | (351) | ||
Ending Balance | $ (2,836) | ||
[1] | Note: The balance sheet at December 31, 2017 has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. |
Dividends - Additional Informat
Dividends - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands | Apr. 24, 2018 | Feb. 14, 2018 | Mar. 25, 2018 | Mar. 26, 2017 | Dec. 31, 2017 | [1] |
Dividends Payable [Line Items] | ||||||
Dividends declared per share | $ 0.55 | $ 0.55 | $ 0.46 | |||
Common stock dividends accrued | $ 24,006 | $ 536 | ||||
Dividend declared date | Feb. 14, 2018 | |||||
Record date of dividend | Mar. 15, 2018 | |||||
Dividend payable date | Mar. 30, 2018 | |||||
Subsequent Event [Member] | ||||||
Dividends Payable [Line Items] | ||||||
Dividends declared per share | $ 0.55 | |||||
Record date of dividend | Jun. 15, 2018 | |||||
Dividend payable date | Jun. 29, 2018 | |||||
[1] | Note: The balance sheet at December 31, 2017 has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. |
Accumulated Other Comprehensi32
Accumulated Other Comprehensive Loss - Additional Information (Detail) - USD ($) | 3 Months Ended | |||
Mar. 25, 2018 | Mar. 26, 2017 | Dec. 31, 2017 | [1] | |
Other Comprehensive Income [Line Items] | ||||
Accumulated other comprehensive loss | $ (2,836,000) | $ (2,030,000) | ||
Reclassification losses from accumulated other comprehensive loss to net income | 0 | $ 0 | ||
Accumulated Other Comprehensive Loss [Member] | ||||
Other Comprehensive Income [Line Items] | ||||
Reclassification of certain tax effects from accumulated other comprehensive income | $ (351,000) | |||
[1] | Note: The balance sheet at December 31, 2017 has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. |
Recapitalization - Additional I
Recapitalization - Additional Information (Detail) - 2018 Recapitalization [Member] - USD ($) $ in Millions | Apr. 24, 2018 | Mar. 25, 2018 |
2018 Notes [Member] | ||
Debt Instrument [Line Items] | ||
Scheduled principal payments in year 2018 | $ 4.1 | |
Scheduled principal payments in year 2019 | 8.3 | |
Scheduled principal payments in year 2020 | 8.3 | |
Scheduled principal payments in year 2021 | 8.3 | |
Scheduled principal payments in year 2022 | 8.3 | |
Scheduled principal payments in year 2023 | 8.3 | |
Scheduled principal payments in year 2024 | 8.3 | |
Scheduled principal payments in year 2025 | 401.4 | |
Scheduled principal payments in year 2026 | 4 | |
Scheduled principal payments in year 2027 | $ 366 | |
Subsequent Event [Member] | 2018 A-2-I Notes [Member] | ||
Debt Instrument [Line Items] | ||
Debt instrument face amount | $ 425 | |
Debt instrument, stated percentage | 4.116% | |
Debt instrument, term | 7 years 6 months | |
Subsequent Event [Member] | 2018 A-2-II Notes [Member] | ||
Debt Instrument [Line Items] | ||
Debt instrument face amount | $ 400 | |
Debt instrument, stated percentage | 4.328% | |
Debt instrument, term | 9 years 3 months | |
Subsequent Event [Member] | 2018 Notes [Member] | ||
Debt Instrument [Line Items] | ||
Gross proceeds from the issuance of debt | $ 825 |
Open Market Share Repurchase 34
Open Market Share Repurchase Program - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | |
Apr. 24, 2018 | Mar. 25, 2018 | Mar. 26, 2017 | |
Share Repurchases [Line Items] | |||
Common stock repurchased and retired (in shares) | 448,008 | 80,360 | |
Payments for purchases of common stock | $ 101,084 | $ 12,721 | |
Common stock repurchased and retired during period, average price | $ 225.63 | $ 158.30 | |
Stock repurchase remaining authorized repurchase amount | $ 648,900 | ||
Subsequent Event [Member] | |||
Share Repurchases [Line Items] | |||
Common stock repurchased and retired (in shares) | 351,699 | ||
Payments for purchases of common stock | $ 81,300 | ||
Common stock repurchased and retired during period, average price | $ 231.25 |
Carrying Amounts and Fair Value
Carrying Amounts and Fair Values of Certain Assets (Detail) - USD ($) $ in Thousands | Mar. 25, 2018 | Dec. 31, 2017 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash equivalents, carrying amount | $ 32,221 | $ 7,933 |
Restricted cash equivalents, carrying amount | 91,137 | 96,375 |
Investments in marketable securities, carrying amount | 8,669 | 8,119 |
Advertising fund cash equivalents, restricted, carrying amount | 18,502 | 19,945 |
Advertising fund investments, restricted, carrying amount | 70,000 | 74,007 |
Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash equivalents, fair value | 32,221 | 7,933 |
Restricted cash equivalents, fair value | 91,137 | 96,375 |
Investments in marketable securities, carrying amount | 8,669 | 8,119 |
Advertising fund cash equivalents, restricted, fair value | 18,502 | 19,945 |
Advertising fund investments, restricted, fair value | $ 70,000 | $ 74,007 |
Schedule of Estimated Fair Valu
Schedule of Estimated Fair Value (Detail) - USD ($) $ in Thousands | Mar. 25, 2018 | Dec. 31, 2017 |
2015 Class Five-Year Notes [Member] | ||
Debt Instrument [Line Items] | ||
Principal Amount | $ 491,250 | $ 492,500 |
Fair Value | 490,268 | 494,470 |
2015 Ten-Year Notes [Member] | ||
Debt Instrument [Line Items] | ||
Principal Amount | 786,000 | 788,000 |
Fair Value | 811,938 | 821,884 |
2017 Five-Year Fixed Rate Notes [Member] | ||
Debt Instrument [Line Items] | ||
Principal Amount | 597,000 | 598,500 |
Fair Value | 583,269 | 592,515 |
2017 Ten-Year Fixed Rate Notes [Member] | ||
Debt Instrument [Line Items] | ||
Principal Amount | 995,000 | 997,500 |
Fair Value | 998,980 | 1,023,435 |
2017 Five-Year Floating Rate Notes [Member] | ||
Debt Instrument [Line Items] | ||
Principal Amount | 298,500 | 299,250 |
Fair Value | $ 299,694 | $ 300,746 |
Legal Matters - Additional Info
Legal Matters - Additional Information (Detail) - Yvonne Wiederhold [Member] $ in Millions | Feb. 14, 2011USD ($) |
Legal Settlement By Party [Line Items] | |
Amount delivered for plaintiff | $ 10.1 |
Percentage liable by company for plaintiff | 90.00% |
Litigation settlement, amount | $ 8.9 |
Supplemental Disclosures of C38
Supplemental Disclosures of Cash Flow Information - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended |
Mar. 25, 2018 | Dec. 31, 2017 | |
Supplemental Cash Flow Elements [Abstract] | ||
Capital expenditure accrual | $ 2.4 | $ 4 |
Capital lease of supply chain center building expiration year | 2,033 | |
Capital lease | $ 2.6 |
New Accounting Pronouncements -
New Accounting Pronouncements - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 25, 2018 | Dec. 31, 2017 | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Deferred tax asset | $ 4,069 | $ 2,750 | [1] |
Accumulated Other Comprehensive Loss [Member] | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Reclassification of certain tax effects from accumulated other comprehensive income | $ (351) | ||
Accounting Standards Update 2014-09 [Member] | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Adjustment to beginning retained deficit | (15,000) | ||
Contract liability, Current | 2,400 | ||
Contract liability, Noncurrent | 12,600 | ||
Deferred tax asset | $ 3,500 | ||
Term of franchise store agreement | 10 years | ||
Adjustment to retained deficit | $ (6,400) | ||
Deferred tax liability | $ 1,600 | ||
[1] | Note: The balance sheet at December 31, 2017 has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. |
New Accounting Pronouncements40
New Accounting Pronouncements - Cumulative Effect of Changes Made to Consolidated Balance Sheet (Detail) - USD ($) $ in Thousands | Mar. 25, 2018 | Dec. 31, 2017 | |
Other assets: | |||
Deferred income taxes | $ 4,069 | $ 2,750 | [1] |
Current liabilities: | |||
Advertising fund liabilities | 105,830 | 120,223 | [1] |
Other accrued liabilities | 112,143 | 117,554 | [1] |
Long-term liabilities: | |||
Other accrued liabilities | 35,843 | 21,751 | [1] |
Stockholders' deficit: | |||
Retained deficit | (2,768,591) | (2,739,437) | [1] |
Accounting Standards Update 2014-09 [Member] | |||
Other assets: | |||
Deferred income taxes | 3,500 | ||
Scenario, Previously Reported [Member] | |||
Other assets: | |||
Deferred income taxes | 2,202 | 2,750 | |
Current liabilities: | |||
Advertising fund liabilities | 112,265 | 120,223 | |
Other accrued liabilities | 109,747 | 58,578 | |
Long-term liabilities: | |||
Other accrued liabilities | 23,273 | 21,751 | |
Stockholders' deficit: | |||
Retained deficit | (2,761,927) | (2,739,437) | |
Restatement Adjustment [Member] | |||
Other assets: | |||
Deferred income taxes | 1,867 | ||
Current liabilities: | |||
Advertising fund liabilities | (6,435) | ||
Other accrued liabilities | 2,396 | ||
Long-term liabilities: | |||
Other accrued liabilities | 12,570 | ||
Stockholders' deficit: | |||
Retained deficit | $ (6,664) | ||
Restatement Adjustment [Member] | Accounting Standards Update 2014-09 [Member] | |||
Other assets: | |||
Deferred income taxes | 1,878 | ||
Current liabilities: | |||
Advertising fund liabilities | (6,425) | ||
Other accrued liabilities | 2,365 | ||
Long-term liabilities: | |||
Other accrued liabilities | 12,639 | ||
Stockholders' deficit: | |||
Retained deficit | (6,701) | ||
Scenario As Restated [Member] | |||
Other assets: | |||
Deferred income taxes | 4,628 | ||
Current liabilities: | |||
Advertising fund liabilities | 113,798 | ||
Other accrued liabilities | 60,943 | ||
Long-term liabilities: | |||
Other accrued liabilities | 34,390 | ||
Stockholders' deficit: | |||
Retained deficit | $ (2,746,138) | ||
[1] | Note: The balance sheet at December 31, 2017 has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. |
New Accounting Pronouncements41
New Accounting Pronouncements - Impact of Adoption on Company's Condensed Consolidated Statement of Income and Condensed Consolidated Balance Sheet (Detail) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 25, 2018 | Mar. 26, 2017 | Dec. 31, 2017 | ||
Revenues: | ||||
Revenue | $ 785,371 | $ 624,217 | ||
General and administrative | 84,178 | 77,782 | ||
Income from operations | 133,476 | 116,034 | ||
Income before provision for income taxes | 103,670 | 90,514 | ||
Provision for income taxes | 14,843 | 28,045 | ||
Net income | 88,827 | 62,469 | ||
Other assets: | ||||
Deferred income taxes | 4,069 | $ 2,750 | [1] | |
Current liabilities: | ||||
Advertising fund liabilities | 105,830 | 120,223 | [1] | |
Other accrued liabilities | 112,143 | 117,554 | [1] | |
Long-term liabilities: | ||||
Other accrued liabilities | 35,843 | 21,751 | [1] | |
Stockholders' deficit: | ||||
Retained deficit | (2,768,591) | (2,739,437) | [1] | |
Domestic Stores [Member] | Domestic Franchise Royalties and Fees [Member] | ||||
Revenues: | ||||
Revenue | 89,490 | 79,901 | ||
Domestic Stores [Member] | Domestic Franchise Advertising [Member] | ||||
Revenues: | ||||
Revenue | 82,211 | |||
Domestic franchise advertising | 82,211 | |||
International Franchise [Member] | International Franchise Royalties and Fees [Member] | ||||
Revenues: | ||||
Revenue | 52,421 | $ 42,218 | ||
Scenario, Previously Reported [Member] | ||||
Revenues: | ||||
General and administrative | 88,746 | |||
Income from operations | 133,428 | |||
Income before provision for income taxes | 103,622 | |||
Provision for income taxes | 14,832 | |||
Net income | 88,790 | |||
Other assets: | ||||
Deferred income taxes | 2,202 | 2,750 | ||
Current liabilities: | ||||
Advertising fund liabilities | 112,265 | 120,223 | ||
Other accrued liabilities | 109,747 | 58,578 | ||
Long-term liabilities: | ||||
Other accrued liabilities | 23,273 | 21,751 | ||
Stockholders' deficit: | ||||
Retained deficit | (2,761,927) | $ (2,739,437) | ||
Scenario, Previously Reported [Member] | Domestic Stores [Member] | Domestic Franchise Royalties and Fees [Member] | ||||
Revenues: | ||||
Revenue | 94,068 | |||
Scenario, Previously Reported [Member] | International Franchise [Member] | International Franchise Royalties and Fees [Member] | ||||
Revenues: | ||||
Revenue | 52,383 | |||
Restatement Adjustment [Member] | ||||
Revenues: | ||||
General and administrative | (4,568) | |||
Income from operations | 48 | |||
Income before provision for income taxes | 48 | |||
Provision for income taxes | 11 | |||
Net income | 37 | |||
Other assets: | ||||
Deferred income taxes | 1,867 | |||
Current liabilities: | ||||
Advertising fund liabilities | (6,435) | |||
Other accrued liabilities | 2,396 | |||
Long-term liabilities: | ||||
Other accrued liabilities | 12,570 | |||
Stockholders' deficit: | ||||
Retained deficit | (6,664) | |||
Restatement Adjustment [Member] | Domestic Stores [Member] | Domestic Franchise Royalties and Fees [Member] | ||||
Revenues: | ||||
Revenue | (4,578) | |||
Restatement Adjustment [Member] | Domestic Stores [Member] | Domestic Franchise Advertising [Member] | ||||
Revenues: | ||||
Revenue | 82,211 | |||
Domestic franchise advertising | 82,211 | |||
Restatement Adjustment [Member] | International Franchise [Member] | International Franchise Royalties and Fees [Member] | ||||
Revenues: | ||||
Revenue | $ 38 | |||
[1] | Note: The balance sheet at December 31, 2017 has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. |