DOMINOS PIZZA INC Fair Value Disclosure
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 28, 2025 and December 29, 2024, the fair value of the Company’s investment in DPC Dash is based on the active exchange quoted price for the equity security (HK$71.90 per share as of December 28, 2025 and HK$79.25 per share as of December 29, 2024). The Company owned 3,901,019 and 8,101,019 ordinary shares as of December 28, 2025 and December 29, 2024, representing 3.0% and 6.2% of DPC Dash’s ordinary shares as of the respective dates. The Company sold 4,200,000 ordinary shares of its investment in DPC Dash in the second quarter of 2025 for net proceeds of $44.1 million. 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 negative adjustment of $2.5 million in 2025, and total net positive adjustments 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 losses and gains recorded in other expense and other income in its consolidated statements of income.
The following table summarizes the carrying amounts and fair values of certain assets at December 28, 2025:
|
|
At December 28, 2025 |
|
|||||||||||||
|
|
|
|
|
Fair Value Estimated Using |
|
||||||||||
|
|
Carrying |
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
||||
|
|
Amount |
|
|
Inputs |
|
|
Inputs |
|
|
Inputs |
|
||||
Cash equivalents |
|
$ |
54,306 |
|
|
$ |
54,306 |
|
|
$ |
— |
|
|
$ |
— |
|
Restricted cash equivalents |
|
|
146,517 |
|
|
|
146,517 |
|
|
|
— |
|
|
|
— |
|
Investments in marketable securities |
|
|
24,971 |
|
|
|
24,971 |
|
|
|
— |
|
|
|
— |
|
Advertising fund cash equivalents, restricted |
|
|
65,604 |
|
|
|
65,604 |
|
|
|
— |
|
|
|
— |
|
Investment in DPC Dash |
|
|
36,070 |
|
|
|
36,070 |
|
|
|
— |
|
|
|
— |
|
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 |
|
|
|
— |
|
|
|
— |
|
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 28, 2025 |
|
|
December 29, 2024 |
|
||||||||||
|
|
Principal |
|
|
Fair Value |
|
|
Principal |
|
|
Fair Value |
|
||||
2015 Ten-Year Notes |
|
$ |
— |
|
|
|
— |
|
|
$ |
742,000 |
|
|
$ |
739,032 |
|
2017 Ten-Year Notes |
|
|
940,000 |
|
|
|
934,360 |
|
|
|
940,000 |
|
|
|
915,560 |
|
2018 7.5-Year Notes |
|
|
— |
|
|
|
— |
|
|
|
402,688 |
|
|
|
399,869 |
|
2018 9.25-Year Notes |
|
|
379,000 |
|
|
|
377,863 |
|
|
|
379,000 |
|
|
|
370,662 |
|
2019 Ten-Year Notes |
|
|
648,000 |
|
|
|
624,024 |
|
|
|
648,000 |
|
|
|
599,400 |
|
2021 7.5-Year Notes |
|
|
826,625 |
|
|
|
785,294 |
|
|
|
826,625 |
|
|
|
750,576 |
|
2021 Ten-Year Notes |
|
|
972,500 |
|
|
|
893,728 |
|
|
|
972,500 |
|
|
|
850,938 |
|
2025 Five-Year Notes |
|
|
500,000 |
|
|
|
503,000 |
|
|
|
— |
|
|
|
— |
|
2025 Seven-Year Notes |
|
|
500,000 |
|
|
|
506,000 |
|
|
|
— |
|
|
|
— |
|
The Company had no outstanding borrowings under its variable funding notes at December 28, 2025 or December 29, 2024.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 23, 2026 | Showing above |
| 2024 | Feb 24, 2025 | |
| 2023 | Feb 23, 2023 | |
| 2022 | Mar 1, 2022 | |
| 2021 | Feb 25, 2021 | |
| 2019 | Feb 20, 2020 | |
| 2018 | Feb 21, 2019 | |
| 2017 | Feb 20, 2018 | |
| 2016 | Feb 25, 2016 | |
About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.