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Fair Value Measurements
 12 Months Ended
Dec. 29, 2024
Fair Value Disclosures [Abstract]  
Fair Value Measurements
(4)
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.

 

Fair Value of Cash Equivalents and Marketable Securities

 

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.

 

Fair Value of Investments

The Company holds a non-controlling interest in DPC Dash, the Company’s master franchisee in China that owns and operates Domino’s Pizza stores in that market. As of December 29, 2024 and December 31, 2023, the fair value of the Company’s investment in DPC Dash is based on the active exchange quoted price for the equity security (HK$79.25 per share as of December 29, 2024 and HK$61.95 per share as of December 31, 2023). The Company owned 8,101,019 and 18,101,019 ordinary shares as of December 29, 2024 and December 31, 2023, respectively. The Company sold 10,000,000 ordinary shares of its investment in DPC Dash in the fourth quarter of 2024 for net proceeds of $82.9 million.

 

The Company recorded a total net adjustment to the net carrying amount of its investment in DPC Dash of $22.1 million and $17.7 million in 2024 and 2023, respectively, with the net realized and unrealized gains recorded in other income in its consolidated statements of income. The Company did not record any adjustments to the carrying amount of its investment in 2022.

 

The following table summarizes the carrying amounts and fair values of certain assets at December 29, 2024:

 

 

 

At December 29, 2024

 

 

 

 

 

 

Fair Value Estimated Using

 

 

 

Carrying

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

 

Amount

 

 

Inputs

 

 

Inputs

 

 

Inputs

 

Cash equivalents

 

$

127,074

 

 

$

127,074

 

 

$

—

 

 

$

—

 

Restricted cash equivalents

 

 

140,669

 

 

 

140,669

 

 

 

—

 

 

 

—

 

Investments in marketable securities

 

 

20,638

 

 

 

20,638

 

 

 

—

 

 

 

—

 

Advertising fund cash equivalents, restricted

 

 

70,350

 

 

 

70,350

 

 

 

—

 

 

 

—

 

Investment in DPC Dash

 

 

82,699

 

 

 

82,699

 

 

 

—

 

 

 

—

 

The following table summarizes the carrying amounts and fair values of certain assets at December 31, 2023:

 

 

 

At December 31, 2023

 

 

 

 

 

 

Fair Value Estimated Using

 

 

 

Carrying

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

 

Amount

 

 

Inputs

 

 

Inputs

 

 

Inputs

 

Cash equivalents

 

$

50,732

 

 

$

50,732

 

 

$

—

 

 

$

—

 

Restricted cash equivalents

 

 

133,063

 

 

 

133,063

 

 

 

—

 

 

 

—

 

Investments in marketable securities

 

 

16,720

 

 

 

16,720

 

 

 

—

 

 

 

—

 

Advertising fund cash equivalents, restricted

 

 

69,199

 

 

 

69,199

 

 

 

—

 

 

 

—

 

Investment in DPC Dash

 

 

143,553

 

 

 

143,553

 

 

 

—

 

 

 

—

 

 

Fair Value of Debt

The estimated fair values of the Company’s Notes (Note 3) 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 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 noteholders 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 below.

 

Management estimated the approximate fair values of the Notes as follows:

 

 

 

December 29, 2024

 

 

December 31, 2023

 

 

 

Principal
Amount

 

 

Fair Value

 

 

Principal
Amount

 

 

Fair Value

 

2015 Ten-Year Notes

 

$

742,000

 

 

$

739,032

 

 

$

744,000

 

 

$

727,632

 

2017 Ten-Year Notes

 

 

940,000

 

 

 

915,560

 

 

 

942,500

 

 

 

895,375

 

2018 7.5-Year Notes

 

 

402,688

 

 

 

399,869

 

 

 

403,750

 

 

 

392,041

 

2018 9.25-Year Notes

 

 

379,000

 

 

 

370,662

 

 

 

380,000

 

 

 

365,180

 

2019 Ten-Year Notes

 

 

648,000

 

 

 

599,400

 

 

 

649,688

 

 

 

591,865

 

2021 7.5-Year Notes

 

 

826,625

 

 

 

750,576

 

 

 

828,750

 

 

 

730,958

 

2021 Ten-Year Notes

 

 

972,500

 

 

 

850,938

 

 

 

975,000

 

 

 

830,700

 

 

The Company did not have any outstanding borrowings under its variable funding notes at December 29, 2024 or December 31, 2023.