SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE ~~SECURITIES EXCHANGE ACT OF 1934~~

~~For~~SECURITIES ~~the~~EXCHANGE ~~quarterly~~ACT ~~period~~OF ~~ended June 15, 2003~~ 1934

For the quarterly period ended September 7, 2003

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE ~~SECURITIES EXCHANGE ACT OF 1934~~

SECURITIES EXCHANGE ACT OF 1934

For the transition period from: to

Commission file number: 333- 74797

Domino’s, Inc.

(Exact name of registrant as specified in its charter)

Delaware		38-3025165
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification Number)
(State or other jurisdiction ofincorporation or organization)		(I.R.S. EmployerIdentification Number)

30 Frank Lloyd Wright Drive

Ann Arbor, Michigan 48106

(Address of principal executive offices)

(734) 930-3030

(Registrant’s telephone number, including area code)

Indicate by check mark whether registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act): Yes ¨ No x

The number of shares outstanding of the registrant’s common stock as of ~~July~~October 2113, 2003 was 10 shares.

Domino’s, Inc.

INDEX

		Page No.
PART I.	FINANCIAL INFORMATION
Item 1.	Financial Statements
	Condensed Consolidated Balance Sheets – June 15, 2003 (Unaudited) and December 29, 2002	3
	Condensed Consolidated Balance Sheets – September 7, 2003 (Unaudited) and December 29, 2002	3
	Condensed Consolidated Statements of Income (Unaudited) – Fiscal quarter and two fiscal quarters ended June 15, 2003 and June 16, 2002	4
	Condensed Consolidated Statements of Operations (Unaudited) – Fiscal quarter and three fiscal quarters ended September 7, 2003 and September 8, 2002	4
	Condensed Consolidated Statements of Cash Flows (Unaudited) – Two fiscal quarters ended June 15, 2003 and June 16, 2002	5
	Condensed Consolidated Statements of Cash Flows (Unaudited) – Three fiscal quarters ended September 7, 2003 and September 8, 2002	5
	Notes to Condensed Consolidated Financial Statements (Unaudited)	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	12
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	1718
Item 4.	Controls and Procedures	1718
PART II.	OTHER INFORMATION
Item 6.	Exhibits and Reports on Form 8-K	1819
SIGNATURES		1819

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

Domino’s, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(In thousands)	~~June~~September 157, 2003(Unaudited)			December 29, 2002(Note)
	(Unaudited)			(Note)
Assets
Current assets:
Cash and cash equivalents	$	5125,~~746~~010		$	22,472
Accounts receivable		5660,~~269~~339			57,497
Inventories		2022,~~539~~470			21,832
Notes receivable		3,~~179~~455			3,398
Prepaid expenses and other		813,~~917~~440			6,673
Advertising fund assets, restricted		3128,~~920~~005			28,231
Deferred income taxes		7,141			6,809
Total current assets		~~179~~159,~~711~~860			146,912
Property, plant and equipment:
Land and buildings		15,~~865~~669			15,986
Leasehold and other improvements		59,~~108~~892			57,029
Equipment		~~150~~152,~~675~~461			145,513
Construction in progress		5,~~047~~952			5,727
		230,695			224,255
		233,974			224,255
Accumulated depreciation and amortization		~~111~~115,~~161~~139			103,708
Property, plant and equipment, net		~~119~~118,~~534~~835			120,547
Other assets:
Deferred financing costs		1619,~~038~~770			18,264
Goodwill		27,~~601~~533			27,232
Capitalized software		2726,~~374~~976			28,313
Other assets		1914,~~697~~550			20,872
Deferred income taxes		5654,~~416~~911			60,287
Total other assets		~~147~~143,~~126~~740			154,968
Total assets	$	~~446~~422,~~371~~435		$	422,427
Liabilities and stockholder’s deficit
Current liabilities:
Current portion of long-term debt	$	322,~~761~~091		$	2,843
Accounts payable		4548,~~123~~955			46,131
Insurance reserves		8,~~677~~638			8,452
Advertising fund liabilities		3128,~~920~~005			28,231
Other accrued liabilities		7361,~~906~~418			71,571
Total current liabilities		~~163~~169,~~387~~107			157,228
Long-term liabilities:
Long-term debt, less current portion		~~576~~949,~~905~~480			599,180
Insurance reserves		1516,~~011~~356			12,510
Other accrued liabilities		2928,~~386~~928			29,090
Total long-term liabilities		~~621~~994,~~302~~764			640,780
Stockholder’s deficit:
Common stock		—			—
Additional paid-in capital		~~120~~124,~~723~~019			120,723
Retained deficit		(~~456~~863,~~292~~509	)		(491,793	)
Accumulated other comprehensive loss		(21,~~749~~946	)		(4,511	)
Total stockholder’s deficit		(~~338~~741,~~318~~436	)		(375,581	)
Total liabilities and stockholder’s deficit	$	~~446~~422,~~371~~435		$	422,427

Note: The balance sheet at December 29, 2002 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.

See accompanying notes.

Domino’s, Inc. and Subsidiaries

Condensed Consolidated Statements of ~~Income~~Operations

(Unaudited)

	Fiscal Quarter Ended						~~Two Fiscal Quarters Ended~~		Three Fiscal Quarters Ended
(In thousands)	~~June~~September 157, 2003			~~June 16,2002~~	September 8, 2002		~~June 15,2003~~		September 7, 2003	~~June 16,2002~~		September 8, 2002
Revenues:
Domestic Company-owned stores	$	8582,~~875~~419		$	~~88,482~~$	84,436	$	~~175,817~~	$	$258,236	~~178,388~~	$	262,824
Domestic franchise		3231,~~349~~411			~~32,037~~	30,623		~~66,753~~		98,164	~~66,596~~		97,219
Domestic distribution		~~154~~157,~~632~~689			~~154,721~~	143,614		~~322,068~~		479,757	~~320,466~~		464,080
International		2221,~~360~~329			~~18,822~~	18,387		~~42,830~~		64,159	~~36,668~~		55,055
Total revenues		~~295~~292,~~216~~848			~~294,062~~	277,060		~~607,468~~		900,316	~~602,118~~		879,178
Operating expenses:
Cost of sales		~~216~~220,~~583~~066			~~215,790~~	203,450		~~446,635~~		666,701	~~441,128~~		644,578
General and administrative		3950,~~407~~857			~~47,473~~	39,111		~~80,260~~		129,375	~~91,644~~		129,839
Total operating expenses		~~255~~270,~~990~~923			~~263,263~~	242,561		~~526,895~~		796,076	~~532,772~~		774,417
Income from operations		3921,~~226~~925			~~30,799~~	34,499		~~80,573~~		104,240	~~69,346~~		104,761
Interest income		92124			50	47		~~195~~		319	~~268~~		315
Interest expense		11(30,~~020~~967	)		~~13,694~~	(17,099	)	~~23,353~~		(54,320	~~27,213~~)		(44,312	)
Income before provision for income taxes		28,298			17,155			57,415			42,401
Other		(20,422	)			(301	)			(22,164	)		(1,217	)
Provision for income taxes		10,757			6,346			21,530			15,687
Income (loss) before provision (benefit) for income taxes		(29,340	)			17,146				28,075			59,547
Net income	$	17,541		$	10,809		$	35,885		$	26,714
Provision (benefit) for income taxes		(11,002	)			6,345				10,528			22,032
Net income (loss)	$	(18,338	)		$	10,801			$	17,547		$	37,515

See accompanying notes.

Domino’s, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(Unaudited)

	Two Fiscal Quarters Ended
	Three Fiscal Quarters Ended
(In thousands)	~~June~~September 157,2003			~~June~~September 168,2002
Cash flows from operating activities:
Net cash provided by operating activities	$	6052,~~458~~094		$	5266,~~356~~032
Cash flows from investing activities:
Capital expenditures		(1117,~~556~~567	)		(2438,~~696~~361	)
Acquisitions of franchise operations		—			(21,850	)
Other		17,~~992~~653			~~(618~~1,123	)
Net cash used in investing activities		(9,~~564~~914	)		(4759,~~164~~088	)
Cash flows from financing activities:
Proceeds from issuance of long-term debt		1,010,090			365,000
Repayments of long-term debt		(640,426	)		(408,911	)
Cash paid for financing costs		(20,048	)		(3,609	)
Capital contribution		—			521
Repayments of long-term debt		(21,413	)		(32,087	)
Distributions to Parent		(389,263	)		(10,191	)
Distributions to Parent		(384	)		(10,063	)
Net cash used in financing activities		(39,647	)		(57,190	)
Net cash used in financing activities		(21,797	)		(41,629	)
Effect of exchange rate changes on cash and cash equivalents		5			119
Effect of exchange rate changes on cash and cash equivalents		177			117
Increase (decrease) in cash and cash equivalents		2,538			(50,127	)
Increase (decrease) in cash and cash equivalents		29,274			(36,320	)
Cash and cash equivalents, at beginning of period		22,472			55,147
Cash and cash equivalents, at end of period	$	5125,~~746~~010		$	185,~~827~~020

See accompanying notes.

Domino’s, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

(Unaudited; tabular amounts in thousands)

~~June~~September 157, 2003

1. Basis of Presentation

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 and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. In the opinion of management, all adjustments, consisting of normal recurring items, considered necessary for a fair presentation have been included. Operating results for the fiscal quarter and ~~two~~three fiscal quarters ended ~~June~~September 157, 2003 are not necessarily indicative of the results that may be expected for the fiscal year ending December 28, 2003. For further information, refer to the consolidated financial statements and footnotes thereto for the fiscal year ended December 29, 2002 included in our Form 10-K.

2. Comprehensive Income

	Fiscal Quarter Ended						~~Two~~Three Fiscal Quarters Ended
	June 15, 2003			June 16,2002			June 15, 2003			June 16,2002
	September 7, 2003			September 8,2002			September 7, 2003			September 8,2002
Net income	$	17,541		$	10,809		$	35,885		$	26,714
Net income (loss)	$	(18,338	)	$	10,801		$	17,547		$	37,515
Unrealized loss on derivative instruments, net of tax		(1,464	)		(2,543	)		(1,565	)		(2,898	)
Unrealized gain (loss) on derivative instruments, net of tax		576			(1,821	)		(990	)		(4,719	)
Reclassification adjustment for losses included in net income, net of tax		1,044			726			2,092			1,465
Reclassification adjustment for losses included in net income (loss), net of tax		906			779			2,999			2,244
Currency translation adjustment		~~1,124~~(679	)		~~522~~213			~~1,235~~556			~~480~~693
Comprehensive income	$	18,245		$	9,514		$	37,647		$	25,761
Comprehensive income (loss)	$	(17,535	)	$	9,972		$	20,112		$	35,733

3. Segment Information

The following table summarizes revenues, income from operations and earnings before interest, taxes, depreciation and amortization, calculated in the manner required by SFAS No. 131 and which we refer to throughout this document as EBITDA, as adjusted, for each of the Company’s ~~reportable~~ reportable segments.

	Fiscal Quarter Ended June 15, 2003 and June 16, 2002
	Fiscal Quarter Ended September 7, 2003 and September 8, 2002
	DomesticStores		DomesticDistribution		International		IntersegmentRevenues			Other			Total
Revenues –
2003	$	~~118~~113,~~224~~830	$	~~177~~181,~~817~~092	$	2221,~~360~~329	$	(23,~~185~~403	)	$	—		$	~~295~~292,~~216~~848
2002		~~120~~115,~~519~~059		~~179~~166,~~391~~924		18,~~822~~387		(2423,~~670~~310	)		—			~~294~~277,~~062~~060
Income from operations –
2003	$	2925,~~213~~625	$	109,~~407~~195	$	6,~~337~~655		N/A		$	(619,~~731~~550	)	$	3921,~~226~~925
2002		2827,~~620~~174		9,~~830~~035		54,~~042~~883		N/A			(126,~~693~~593	)		3034,~~799~~499
EBITDA –
EBITDA, as adjusted –
2003	$	3228,~~033~~643	$	1210,~~125~~958	$	6,~~565~~895		N/A		$	(520,~~271~~698	)	$	4525,~~452~~798
2002		3029,~~789~~729		1110,~~360~~620		5,~~207~~065		N/A			(5,~~709~~618	)		4139,~~647~~796
	Two Fiscal Quarters Ended June 15, 2003 and June 16, 2002
	DomesticStores		DomesticDistribution		International		IntersegmentRevenues			Other			Total
Revenues –
2003	$	242,570	$	370,346	$	42,830	$	(48,278	)	$	—		$	607,468
2002		244,984		369,065		36,668		(48,599	)		—			602,118
Income from operations –
2003	$	60,827	$	22,331	$	12,012		N/A		$	(14,597	)	$	80,573
2002		62,104		19,937		9,646		N/A			(22,341	)		69,346
EBITDA –
2003	$	66,614	$	25,720	$	12,442		N/A		$	(9,493	)	$	95,283
2002		66,584		22,971		9,965		N/A			(12,132	)		87,388

	Three Fiscal Quarters Ended September 7, 2003 and September 8, 2002
	Domestic Stores		Domestic Distribution		International		Intersegment Revenues			Other			Total
Revenues –
2003	$	356,400	$	551,438	$	64,159	$	(71,681	)	$	—		$	900,316
2002		360,043		535,989		55,055		(71,909	)		—			879,178
Income from operations –
2003	$	86,452	$	31,526	$	18,667		N/A		$	(32,405	)	$	104,240
2002		89,278		28,972		14,529		N/A			(28,018	)		104,761
EBITDA, as adjusted –
2003	$	95,257	$	36,678	$	19,337		N/A		$	(30,191	)	$	121,081
2002		96,313		33,591		15,030		N/A			(17,750	)		127,184

The following table reconciles EBITDA, as adjusted to consolidated income (loss) before provision (benefit) for income taxes.

	Fiscal Quarter Ended						~~Two~~Three Fiscal Quarters Ended
	June 15, 2003			June 16, 2002			June 15, 2003			June 16, 2002
	September 7,2003			September 8,2002			September 7,2003			September 8,2002
EBITDA	$	45,452		$	41,647		$	95,283		$	87,388
EBITDA, as adjusted	$	25,798		$	39,796		$	121,081		$	127,184
Depreciation and amortization		(6,~~587~~668	)		(65,~~671~~737	)		(1319,~~325~~993	)		(1319,~~823~~560	)
Interest expense		(1130,~~020~~967	)		(1317,~~694~~099	)		(2354,~~353~~320	)		(2744,~~213~~312	)
Interest income		92124			5047			~~195~~319			~~268~~315
Gains (losses) on sale/disposal of assets and other		361			(3,473	)		358			(3,303	)
Gains (losses) on sale/disposal of assets		2,795			440			3,152			(2,863	)
Loss on debt extinguishments		—(20,422	)		(~~704~~301	)		(122,~~743~~164	)		(~~916~~1,217	)
Income before provision for income taxes	$	28,298		$	17,155		$	57,415		$	42,401
Income (loss) before provision (benefit) for income taxes	$	(29,340	)	$	17,146		$	28,075		$	59,547

4. ~~Recapitalization~~New Accounting Pronouncement

OnIn ~~June~~January ~~25,~~ 2003, the ~~Company~~FASB issued FASB Interpretation No. 46, ~~together~~“Consolidation ~~with its~~of ~~parent~~Variable ~~and~~Interest ~~subsidiaries~~Entities, ~~consummated~~an interpretation of ARB No. 51” (“FIN 46”). FIN 46 addresses the consolidation of entities whose equity holders have either (a) ~~recapitalization~~not ~~transaction~~provided sufficient equity at risk to allow the entity to finance its own activities or (b) do not possess certain characteristics of a controlling financial interest. FIN 46 requires the ~~“2003~~consolidation ~~Recapitalization~~of these entities, known as variable interest entities (“VIEs”), ~~whereby~~by the ~~Company:~~primary beneficiary of the entity. FIN 46 applies immediately to variable interests in VIEs created or obtained after January 31, 2003. For variable interests of a non-public equity company in a VIE created before February 1, 2003, FIN 46 is applied to the VIE no later than the end of the first annual reporting period beginning after June 15, 2003, which is the end of our fiscal 2004. We have concluded that we have not created or obtained any VIEs subsequent to January 31, 2003 that would require consolidation. We are assessing FIN 46 as it relates to VIEs created before February 1, 2003 and, although we have not completed our analysis, we currently do not expect adoption to have a material effect on our financial statements.

~~(1) issued and sold $403~~5.0 ~~million~~Balance ~~aggregate~~Sheet Presentation ~~principal amount at maturity~~ of ~~8¼%~~Advertising ~~Senior~~Fund ~~Subordinated Notes due 2011 (the “2011 Notes”) at a discount resulting in gross proceeds of $400.1 million;~~

The Company has presented on a gross basis approximately $28.0 million of assets and liabilities of our advertising fund (the “Advertising Fund”) in the condensed consolidated balance sheet as of September 7, 2003 and has reclassified approximately $28.2 million of assets and liabilities of the Advertising Fund in the condensed consolidated balance sheet as of December 29, 2002. The Company had previously presented these assets and liabilities on a net basis. As the related assets, consisting primarily of cash and accounts receivable, held by the Advertising Fund can only be used for activities that promote the Domino’s Pizza brand, all assets held by the Advertising Fund are considered restricted.

6. Stock Based Compensation

The Company accounts for our parent company’s stock option plan under the recognition and measurement principles of APB Opinion No. 25 “Accounting for Stock Issued to Employees,” and related Interpretations. The following table illustrates the effect on net income (loss) if the Company had applied the fair value recognition provisions of SFAS No. 123 “Accounting for Stock-Based Compensation” to the stock-based employee compensation.

	Fiscal Quarter Ended						Three Fiscal Quarters Ended
	September 7, 2003			September 8, 2002			September 7, 2003			September 8, 2002
Net income (loss), as reported	$	(18,338	)	$	10,801		$	17,547		$	37,515
Add: Stock-based employee compensation expense included in reported net income (loss), net of related tax effects		2,060			—			2,060			—
Deduct: Total stock-based employee compensation expense determined under the fair value method for all awards, net of related tax effects		(2,806	)		(16	)		(2,906	)		(47	)

Net income (loss), pro forma	$	(19,084	)	$	10,785		$	16,701		$	37,468

7. Recapitalization

On June 25, 2003, the Company, together with its parent consummated a recapitalization transaction whereby the Company:

(1)

issued and sold $403.0 million aggregate principal amount at maturity of 8¹/4% Senior Subordinated Notes due 2011 (the “2011 Notes”) at a discount resulting in gross proceeds of $400.1 million;

(2)

borrowed $610.0 million in term loans and secured a $125.0 million revolving credit facility (collectively the “2003 Senior Credit Facility”); and

(3)

used the proceeds from the 2011 Notes, borrowings under the 2003 Senior Credit Facility and cash from operations to:

• purchase an aggregate of $206.7 million principal amount of its 10 3/8% Senior Subordinated Notes due 2009 ~~(the “2009 Notes”)~~ for an aggregate purchase price, including $20.4 million of bond tender fees recorded in other expense and $9.6 million of accrued interest, of approximately $236.7 million; losses on debt extinguishments for all periods presented have been reclassified from general and administrative expenses to other expense to conform with the income statement presentation of the aforementioned bond tender fees.

•

repay all amounts outstanding under the previous senior credit facility;

•

distribute amounts to its parent to redeem all of its outstanding 11.5% Cumulative Preferred Stock for an aggregate redemption price of approximately $200.5 million;

•

distribute amounts to its parent to pay a dividend on its outstanding common stock in the aggregate amount of approximately $188.3 million;

•

make compensatory make-whole payments to specified parent shareholders and Company officers, directors and employees who hold parent stock options in the aggregate amount of approximately $12.4 million; and

•

pay related transaction fees and expenses.

The 2003 Recapitalization, including the transactions described above, will be recorded in the third fiscal quarter of 2003.

The tables below present condensed consolidating financial information for the applicable periods for: (1) Domino’s, Inc.; (2) on a combined basis, the guarantor subsidiaries of the 2011 Notes, which includes most of the domestic subsidiaries of the Company and one foreign subsidiary of the Company; and (3) on a combined basis, the non-guarantor subsidiaries of the 2011 Notes. Each of the guarantor subsidiaries is jointly, severally, fully and unconditionally liable under the related guarantee.

Domino’s, Inc.

Supplemental Condensed Consolidating Statements of Operations ~~Income~~

	Fiscal Quarter Ended June 15, 2003
	Fiscal Quarter Ended September 7, 2003
	Domino’s, Inc.			GuarantorSubsidiaries			Non-GuarantorSubsidiaries	~~Non-GuarantorSubsidiaries~~			Eliminations	~~Eliminations~~			Consolidated	~~Consolidated~~
Revenues	$	—		$	~~289~~288,~~882~~044		$	$4,804	~~5,334~~		$	$—	—		$	$292,848	~~295,216~~
Cost of sales		—			~~212~~216,~~626~~322			3,744	~~3,957~~			—	—			220,066	~~216,583~~
General and administrative		—			3849,~~018~~542			1,315	~~1,389~~			—	—			50,857	~~39,407~~
Total operating expenses		—			~~250~~265,~~644~~864			5,059	~~5,346~~			—	—			270,923	~~255,990~~
Income (loss) from operations		—			3922,~~238~~180			(255	~~(12~~)	)		—	—			21,925	~~39,226~~
Equity earnings in subsidiaries		2413,~~455~~736			—			—	—			(13,736	~~(24,455~~)	)		—	—
Interest income (expense), net		(1030,~~961~~916	)		~~109~~147			(74	~~(76~~)	)		—	—			(30,843	~~(10,928~~)	)
Income (loss) before (provision) benefit for income taxes		13,494			39,347				(88	)			(24,455	)			28,298
Other		(20,422	)		—			—				—				(20,422	)
(Provision) benefit for income taxes		4,047			(14,804	)			—				—				(10,757	)
Income (loss) before provision (benefit) for income taxes		(37,602	)		22,327			(329	)			(13,736	)			(29,340	)
Net income (loss)	$	17,541		$	24,543			$	(88	)		$	(24,455	)		$	17,541
Provision (benefit) for income taxes		(19,264	)		8,262			—				—				(11,002	)
	Two Fiscal Quarters Ended June 15, 2003
Net income (loss)	$	(18,338	)	$	14,065		$	(329	)		$	(13,736	)		$	(18,338	)
	Domino’s, Inc.			GuarantorSubsidiaries				Non-GuarantorSubsidiaries				Eliminations				Consolidated
Revenues	$	—		$	597,496			$	9,972			$	—			$	607,468
Cost of sales		—			439,039				7,596				—				446,635
General and administrative		1,743			75,979				2,538				—				80,260
Total operating expenses		1,743			515,018				10,134				—				526,895
Income (loss) from operations		(1,743	)		82,478				(162	)			—				80,573
Equity earnings in subsidiaries		52,597			—				—				(52,597	)			—
Interest income (expense), net		(23,253	)		228				(133	)			—				(23,158	)
Income (loss) before (provision) benefit for income taxes		27,601			82,706				(295	)			(52,597	)			57,415
(Provision) benefit for income taxes		8,284			(29,814	)			—				—				(21,530	)
Net income (loss)	$	35,885		$	52,892			$	(295	)		$	(52,597	)		$	35,885
	Fiscal Quarter Ended June 16, 2002
	Domino’s, Inc.			GuarantorSubsidiaries				Non-GuarantorSubsidiaries				Eliminations				Consolidated
Revenues	$	—		$	290,329			$	3,733			$	—			$	294,062
Cost of sales		—			213,074				2,716				—				215,790
General and administrative		704			45,825				944				—				47,473
Total operating expenses		704			258,899				3,660				—				263,263
Income (loss) from operations		(704	)		31,430				73				—				30,799
Equity earnings in subsidiaries		20,227			—				—				(20,227	)			—
Interest income (expense), net		(13,614	)		23				(53	)			—				(13,644	)
Income (loss) before (provision) benefit for income taxes		5,909			31,453				20				(20,227	)			17,155
(Provision) benefit for income taxes		4,900			(11,246	)			—				—				(6,346	)
Net income (loss)	$	10,809		$	20,207			$	20			$	(20,227	)		$	10,809

	Two Fiscal Quarters Ended June 16, 2002
	Three Fiscal Quarters Ended September 7, 2003
	Domino’s, Inc.			GuarantorSubsidiaries			Non-GuarantorSubsidiaries	~~Non-GuarantorSubsidiaries~~			Eliminations	~~Eliminations~~			Consolidated	~~Consolidated~~
Revenues	$	—		$	~~594~~885,~~907~~540		$	$14,776	~~7,211~~		$	$—	—		$	$900,316	~~602,118~~
Cost of sales		—			~~435~~655,~~774~~360			11,341	~~5,354~~			—	—			666,701	~~441,128~~
General and administrative		~~916~~—			88125,~~780~~521			3,854	~~1,948~~			—	—			129,375	~~91,644~~
Total operating expenses		~~916~~—			~~524~~780,~~554~~881			15,195	~~7,302~~			—	—			796,076	~~532,772~~
Income (loss) from operations		~~(916~~—	)		70104,~~353~~659			(419	~~(91~~)	)		—	—			104,240	~~69,346~~
Equity earnings in subsidiaries		4465,~~733~~545			—			—	—			(65,545	~~(44,733~~)	)		—	—
Interest income (expense), net		(2754,~~054~~169	)		~~212~~375			(207	~~(103~~)	)		—	—			(54,001	~~(26,945~~)	)
Income (loss) before (provision) benefit for income taxes		16,763			70,565				(194	)			(44,733	)			42,401
Other		(22,164	)		—			—				—				(22,164	)
(Provision) benefit for income taxes		9,951			(25,638	)			—				—				(15,687	)
Income (loss) before provision (benefit) for income taxes		(10,788	)		105,034			(626	)			(65,545	)			28,075
Net income (loss)	$	26,714		$	44,927			$	(194	)		$	(44,733	)		$	26,714
Provision (benefit) for income taxes		(28,335	)		38,863			—				—				10,528
Net income (loss)	$	17,547		$	66,171		$	(626	)		$	(65,545	)		$	17,547
	Fiscal Quarter Ended September 8, 2002
	Domino’s, Inc.			GuarantorSubsidiaries			Non-GuarantorSubsidiaries				Eliminations				Consolidated
Revenues	$	—		$	273,160		$	3,900			$	—			$	277,060
Cost of sales		—			200,465			2,985				—				203,450
General and administrative		—			38,083			1,028				—				39,111
Total operating expenses		—			238,548			4,013				—				242,561
Income (loss) from operations		—			34,612			(113	)			—				34,499
Equity earnings in subsidiaries		21,641			—			—				(21,641	)			—
Interest income (expense), net		(17,007	)		19			(64	)			—				(17,052	)
Other		(301	)		—			—				—				(301	)
Income (loss) before provision (benefit) for income taxes		4,333			34,631			(177	)			(21,641	)			17,146
Provision (benefit) for income taxes		(6,468	)		12,813			—				—				6,345
Net income (loss)	$	10,801		$	21,818		$	(177	)		$	(21,641	)		$	10,801
	Three Fiscal Quarters Ended September 8, 2002
	Domino’s, Inc.			GuarantorSubsidiaries			Non-GuarantorSubsidiaries				Eliminations				Consolidated
Revenues	$	—		$	868,067		$	11,111			$	—			$	879,178
Cost of sales		—			636,239			8,339				—				644,578
General and administrative		—			126,863			2,976				—				129,839
Total operating expenses		—			763,102			11,315				—				774,417
Income (loss) from operations		—			104,965			(204	)			—				104,761
Equity earnings in subsidiaries		65,902			—			—				(65,902	)			—
Interest income (expense), net		(44,061	)		230			(166	)			—				(43,997	)
Other		(1,217	)		—			—				—				(1,217	)
Income (loss) before provision (benefit) for income taxes		20,624			105,195			(370	)			(65,902	)			59,547
Provision (benefit) for income taxes		(16,890	)		38,922			—				—				22,032
Net income (loss)	$	37,514		$	66,273		$	(370	)		$	(65,902	)		$	37,515

Domino’s, Inc.

Supplemental Condensed Consolidating Balance Sheets

	As of June 15, 2003
	Domino’s, Inc.			GuarantorSubsidiaries		Non-GuarantorSubsidiaries		Eliminations			Consolidated
Cash	$	—		$	50,736	$	1,010	$	—		$	51,746
Accounts receivable		—			50,952		5,317		—			56,269
Advertising fund assets, restricted		—			—		31,920		—			31,920
Other current assets		—			37,923		1,853		—			39,776
Current assets		—			139,611		40,100		—			179,711
Property, plant and equipment, net		—			115,292		4,242		—			119,534
Other assets		262,163			75,363		6,498		(196,898	)		147,126
Total assets	$	262,163		$	330,266	$	50,840	$	(196,898	)	$	446,371
Current portion of long-term debt	$	3,650		$	—	$	111	$	—		$	3,761
Accounts payable		—			35,290		9,833		—			45,123
Advertising fund liabilities		—			—		31,920		—			31,920
Other current liabilities		19,504			61,850		1,229		—			82,583
Current liabilities		23,154			97,140		43,093		—			163,387
Long-term debt		576,553			—		352		—			576,905
Other long-term liabilities		774			43,372		251		—			44,397
Long-term liabilities		577,327			43,372		603		—			621,302
Stockholder’s equity (deficit)		(338,318	)		189,754		7,144		(196,898	)		(338,318	)
Total liabilities and stockholder’s equity (deficit)	$	262,163		$	330,266	$	50,840	$	(196,898	)	$	446,371

	As of December 29, 2002
	Domino’s, Inc.			GuarantorSubsidiaries		Non-GuarantorSubsidiaries		Eliminations			Consolidated
Cash	$	—		$	21,522	$	950	$	—		$	22,472
Accounts receivable		—			53,523		3,974		—			57,497
Advertising fund assets, restricted		—			—		28,231		—			28,231
Other current assets		—			37,075		1,637		—			38,712
Current assets		—			112,120		34,792		—			146,912
Property, plant and equipment, net		—			116,916		3,631		—			120,547
Other assets		246,053			81,404		6,435		(178,924	)		154,968
Total assets	$	246,053		$	310,440	$	44,858	$	(178,924	)	$	422,427
Current portion of long-term debt	$	2,738		$	—	$	105	$	—		$	2,843
Accounts payable		—			38,010		8,121		—			46,131
Advertising fund liabilities		—			—		28,231		—			28,231
Other current liabilities		18,858			59,746		1,419		—			80,023
Current liabilities		21,596			97,756		37,876		—			157,228
Long-term debt		598,877			—		303		—			599,180
Other long-term liabilities		1,161			40,165		274		—			41,600
Long-term liabilities		600,038			40,165		577		—			640,780
Stockholder’s equity (deficit)		(375,581	)		172,519		6,405		(178,924	)		(375,581	)
Total liabilities and stockholder’s equity (deficit)	$	246,053		$	310,440	$	44,858	$	(178,924	)	$	422,427

Domino’s, Inc.

Supplemental Condensed Consolidating ~~Statements~~Balance ofSheets ~~Cash Flows~~

	Two Fiscal Quarters Ended June 15, 2003
	As of September 7, 2003
	Domino’s, Inc.			GuarantorSubsidiaries			Non-GuarantorSubsidiaries	~~Non-GuarantorSubsidiaries~~		Eliminations		~~Eliminations~~		Consolidated	~~Consolidated~~
Net cash flows provided by (used in) operating activities	$	(21,673	)	$	81,712			$	419			$	—		$	60,458
Cash and cash equivalents	$	—		$	24,286		$	724		$	—			$	25,010
Capital expenditures		—			(11,141	)			(415	)			—			(11,556	)
Accounts receivable		—			54,727			5,612			—				60,339
Other		—			1,992				—				—			1,992
Advertising fund assets, restricted		—			—			28,005			—				28,005
Net cash flows used in investing activities		—			(9,149	)			(415	)			—			(9,564	)
Other current assets		3,316			41,431			1,759			—				46,506
Repayments of long-term debt		(21,413	)		—				—				—			(21,413	)
Current assets		3,316			120,444			36,100			—				159,860
Other		43,086			(43,470	)			—				—			(384	)
Property, plant and equipment, net		—			114,970			3,865			—				118,835
Net cash flows provided by (used in) financing activities		21,673			(43,470	)			—				—			(21,797	)
Other assets		246,673			75,132			1,116			(179,181	)			143,740
Effect of exchange rate differences on cash and cash equivalents		—			121				56				—			177
Total assets	$	249,989		$	310,546		$	41,081		$	(179,181	)		$	422,435
Increase in cash and cash equivalents		—			29,214				60				—			29,274
Current portion of long-term debt	$	21,987		$	—		$	104		$	—			$	22,091
Cash and cash equivalents, at the beginning of the period		—			21,522				950				—			22,472
Accounts payable		—			38,488			10,467			—				48,955
Cash and cash equivalents, at the end of the period	$	—		$	50,736			$	1,010			$	—		$	51,746
Advertising fund liabilities		—			—			28,005			—				28,005
Other current liabilities		16,990			52,223			843			—				70,056
Current liabilities		38,977			90,711			39,419			—				169,107
Long-term debt		949,193			—			287			—				949,480
Other long-term liabilities		3,255			41,790			239			—				45,284
Long-term liabilities		952,448			41,790			526			—				994,764
Stockholder’s equity (deficit)		(741,436	)		178,045			1,136			(179,181	)			(741,436	)
Total liabilities and stockholder’s equity (deficit)	$	249,989		$	310,546		$	41,081		$	(179,181	)		$	422,435
	As of December 29, 2002
	Domino’s, Inc.			GuarantorSubsidiaries			Non-GuarantorSubsidiaries			Eliminations				Consolidated
Cash and cash equivalents	$	—		$	21,522		$	950		$	—			$	22,472
Accounts receivable		—			53,523			3,974			—				57,497
Advertising fund assets, restricted		—			—			28,231			—				28,231
Other current assets		—			37,075			1,637			—				38,712
Current assets		—			112,120			34,792			—				146,912
Property, plant and equipment, net		—			116,916			3,631			—				120,547
Other assets		246,053			86,373			1,466			(178,924	)			154,968
Total assets	$	246,053		$	315,409		$	39,889		$	(178,924	)		$	422,427
Current portion of long-term debt	$	2,738		$	—		$	105		$	—			$	2,843
Accounts payable		—			38,010			8,121			—				46,131
Advertising fund liabilities		—			—			28,231			—				28,231
Other current liabilities		18,858			59,746			1,419			—				80,023
Current liabilities		21,596			97,756			37,876			—				157,228
Long-term debt		598,877			—			303			—				599,180
Other long-term liabilities		1,161			40,165			274			—				41,600
Long-term liabilities		600,038			40,165			577			—				640,780
Stockholder’s equity (deficit)		(375,581	)		177,488			1,436			(178,924	)			(375,581	)
Total liabilities and stockholder’s equity (deficit)	$	246,053		$	315,409		$	39,889		$	(178,924	)		$	422,427

	Two Fiscal Quarters Ended June 16, 2002
	Domino’s, Inc.			GuarantorSubsidiaries			Non-GuarantorSubsidiaries			Eliminations		Consolidated
Net cash flows provided by (used in) operating activities	$	(14,195	)	$	66,060		$	491		$	—	$	52,356
Capital expenditures		—			(24,260	)		(436	)		—		(24,696	)
Other		—			(22,468	)		—			—		(22,468	)
Net cash flows used in investing activities		—			(46,728	)		(436	)		—		(47,164	)
Repayments of long-term debt		(31,378	)		—			(709	)		—		(32,087	)
Other		45,573			(55,115	)		—			—		(9,542	)
Net cash flows provided by (used in) financing activities		14,195			(55,115	)		(709	)		—		(41,629	)
Effect of exchange rate differences on cash and cash equivalents		—			86			31			—		117
Decrease in cash and cash equivalents		—			(35,697	)		(623	)		—		(36,320	)
Cash and cash equivalents, at the beginning of the period		—			53,966			1,181			—		55,147
Cash and cash equivalents, at the end of the period	$	—		$	18,269		$	558		$	—	$	18,827

Domino’s, Inc.

Supplemental Condensed Consolidating Statements of Cash Flows

	Three Fiscal Quarters Ended September 7, 2003
	Domino’s, Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations		Consolidated
Net cash flows provided by (used in) operating activities	$	(57,872	)	$	109,672		$	294		$	—	$	52,094

Capital expenditures		—			(17,065	)		(502	)		—		(17,567	)
Other		—			7,653			—			—		7,653

Net cash flows used in investing activities		—			(9,412	)		(502	)		—		(9,914	)

Proceeds from issuance of long-term debt		1,010,090			—			—			—		1,010,090
Repayments of long-term debt		(640,381	)		—			(45	)		—		(640,426	)
Other		(311,837	)		(97,474	)		—			—		(409,311	)

Net cash flows provided by (used in) financing activities		57,872			(97,474	)		(45	)		—		(39,647	)

Effect of exchange rate changes on cash and cash equivalents		—			(22	)		27			—		5

Increase (decrease) in cash and cash equivalents		—			2,764			(226	)		—		2,538

Cash and cash equivalents, at beginning of period		—			21,522			950			—		22,472

Cash and cash equivalents, at end of period	$	—		$	24,286		$	724		$	—	$	25,010


	Three Fiscal Quarters Ended September 8, 2002
	Domino’s, Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations		Consolidated
Net cash flows provided by (used in) operating activities	$	(43,861	)	$	109,625		$	268		$	—	$	66,032

Capital expenditures		—			(37,910	)		(451	)		—		(38,361	)
Other		—			(20,727	)		—			—		(20,727	)

Net cash flows used in investing activities		—			(58,637	)		(451	)		—		(59,088	)

Proceeds from issuance of long-term debt		365,000			—			—			—		365,000
Repayments of long-term debt		(408,202	)		—			(709	)		—		(408,911	)
Other		87,063			(100,342	)		—			—		(13,279	)

Net cash flows provided by (used in) financing activities		43,861			(100,342	)		(709	)		—		(57,190	)

Effect of exchange rate changes on cash and cash equivalents		—			74			45			—		119

Decrease in cash and cash equivalents		—			(49,280	)		(847	)		—		(50,127	)

Cash and cash equivalents, at beginning of period		—			53,966			1,181			—		55,147

Cash and cash equivalents, at end of period	$	—		$	4,686		$	334		$	—	$	5,020

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

(Unaudited; tabular amounts in millions, except percentages and store data)

The 2003 and 2002 ~~second~~third quarters referenced herein represent the twelve-week periods ended ~~June~~September 157, 2003 and ~~June~~September 168, 2002, respectively. The 2003 and 2002 first ~~two~~three quarters referenced herein represent the ~~twenty~~thirty-~~four~~six week periods ~~ended~~ ~~June~~ended 15September 7, 2003 and ~~June~~September 168, 2002, respectively.

Store Growth Activity

The following is a summary of the Company’s store growth activity for the ~~second~~third quarter and first ~~two~~three quarters of 2003.

	Second Quarter of 2003
	Third Quarter of 2003
	Beginning of Period	Opened	Closed		Transfers	End of Period
	Beginningof Period	Opened	Closed		Transfers	End ofPeriod
Domestic Company-owned stores	~~578~~579	31	(21	)	—	579
Domestic franchise	4,~~274~~283	2125	(12	)	—	4,~~283~~296
Domestic stores	4,~~852~~862	2426	(1413	)	—	4,~~862~~875
International	2,~~401~~429	4446	(1618	)	—	2,~~429~~457
Total	7,~~253~~291	6872	(3031	)	—	7,~~291~~332
	First Two Quarters of 2003
	First Three Quarters of 2003
	Beginning of Period	Opened	Closed		Transfers	End of Period
	Beginningof Period	Opened	Closed		Transfers	End ofPeriod
Domestic Company-owned stores	577	45	(23	)	—	579
Domestic franchise	4,271	4368	(3143	)	—	4,~~283~~296
Domestic stores	4,848	4773	(3346	)	—	4,~~862~~875
International	2,382	91137	(4462	)	—	2,~~429~~457
Total	7,230	~~138~~210	(77108	)	—	7,~~291~~332

Revenues

Revenues include retail sales by Company-owned stores, royalties and fees from domestic and international franchise stores, and sales of food, equipment and supplies by our distribution centers to certain domestic and international franchise stores.

Consolidated revenues increased $115.17 million or 05.47% to $~~295~~292.28 million in the ~~second~~third quarter of 2003, from $~~294~~277.1 million in the comparable period in 2002, and increased $521.41 million or 02.94% to $~~607~~900.53 million in the first ~~two~~three quarters of 2003, from $~~602~~879.12 million in the comparable period in 2002. These increases in revenues were due primarily to increases in ~~international~~domestic distribution revenues and, ~~offset~~to ina ~~part~~lesser byextent, ~~decreases~~increases in ~~domestic~~international ~~stores~~ revenues. ~~Additionally,~~These ~~revenues~~increases ~~for the first two quarters of 2003~~ were ~~positively~~offset ~~impacted~~in part by andecreases ~~increase~~ in domestic ~~distribution~~stores revenues. These results are more fully described below.

Domestic Stores

Domestic stores are comprised of domestic Company-owned store operations and domestic franchise operations, as summarized in the following table.

Domestic Stores	~~Second~~Third ~~Quarter~~Quarterof of 2003				~~Second~~Third ~~Quarter~~Quarterof of 2002				~~First~~FirstThree ~~TwoQuarters~~Quartersof of 2003				~~First~~FirstThree ~~Two~~Quartersof ~~Quarters of~~ 2002
Domestic Company-owned stores	$	8582.94	72.64	%	$	8884.54	73.4	%	$	~~175~~258.82	72.5	%	$	~~178~~262.48	7273.80	%
Domestic franchise		3231.34	27.46	%		3230.06	26.6	%		6698.82	27.5	%		6697.62	27.20	%
Total domestic stores revenues	$	~~118~~113.28	100.0	%	$	~~120~~115.51	100.0	%	$	~~242~~356.64	100.0	%	$	~~245~~360.0	100.0	%

Domestic stores revenues decreased $21.3 million or 1.91% to $~~118~~113.28 million in the ~~second~~third quarter of 2003, from $~~120~~115.51 million in the comparable period in 2002, and decreased $23.46 million or 1.0% to $~~242~~356.64 million in the first ~~two~~three quarters of 2003, from $~~245~~360.0 million in the comparable period in 2002. These decreases in revenues were due primarily to decreases in same store sales at our domestic Company-owned stores during 2003, offset in part by increases in same store sales at our domestic franchise stores, and are more fully described below. Same store sales for domestic stores ~~decreased~~increased 0.35% in the third quarter of 2003 and decreased 0.84% in the ~~second quarter and~~ first ~~two~~three quarters of 2003, ~~respectively,~~ compared to the same ~~period~~periods in 2002.

Domestic Company-Owned Stores

Revenues from domestic Company-owned store operations decreased $2.60 million or 2.94% to $8582.94 million in the ~~second~~third quarter of 2003, from $8884.54 million in the comparable period in 2002, and decreased $24.6 million or 1.47% to $~~175~~258.82 million in the first ~~two~~three quarters of 2003, from $~~178~~262.48 million in the comparable period in 2002. These decreases in revenues were due ~~primarily~~ to decreases in same store sales. Same store sales for domestic Company-owned stores decreased 2.94% and 4.3.7% in the ~~second~~third quarter and first ~~two~~three quarters of 2003, respectively, compared to the same ~~period~~ periods in 2002. There were 579 and ~~583~~584 domestic Company-owned stores in operation as of ~~June~~September 157, 2003, and ~~June~~September 168, 2002, respectively.

Domestic Franchise

Revenues from domestic franchise operations increased ~~slightly~~$0.8 million or 2.6% to $31.4 million in the ~~second~~third quarter of 2003, from $30.6 million in the comparable period in 2002, and increased $1.0 million or 1.0% to $98.2 million in the first ~~two~~three quarters of 2003, from $97.2 in the comparable period in 2002. These increases in revenues were due ~~primarily~~ to increases in the average number of domestic franchise stores open during 2003 and increases in same store sales. There were 4,~~283~~296 and 4,~~223~~227 domestic franchise stores in operation as of ~~June~~September 157, 2003 and ~~June~~September 168, 2002, respectively. Same store sales for domestic franchise stores increased ~~remained~~0.9% ~~relatively~~and ~~flat, increasing~~ 0.1% in the ~~second~~third quarter ~~of 2003~~ and ~~decreasing 0.2% in the~~ first ~~two~~three quarters of 2003, respectively, compared to the same ~~period~~periods in 2002.

Domestic Distribution

Revenues from domestic distribution operations ~~decreased~~increased ~~slightly~~$14.1 million or 9.8% to $157.7 million in the ~~second~~ third quarter of 2003, from ~~the~~$143.6 million in the comparable period in 2002, and increased $115.67 million or 03.54% to $~~322~~479.18 million in the first ~~two~~three quarters of 2003, from $~~320~~464.51 million in the comparable period in 2002. ~~This~~These ~~increase~~increases in revenues inwere ~~the first two quarters of 2003 was~~ due primarily to ~~increases~~an inincrease ~~volumes, offset by a market decrease~~ in overall food basket prices, including ~~lower~~higher cheese prices, and to a lesser extent, an increase in volumes. The cheese block price per pound averaged $1.1138 and $1.1221 in the ~~second~~third quarter and first ~~two~~ three quarters of 2003, respectively, compared to $1.2212 and $1.24 20 in the comparable ~~period~~periods in 2002.

International

Revenues from international operations increased $32.6 9 million or 1816.80% to $2221.43 million in the ~~second~~third quarter of 2003, from $18.84 million in the comparable period in 2002, and increased $69.1 million or 16.85% to $4264.82 million in the first ~~two~~ three quarters of 2003, from $3655.71 million in the comparable period in 2002. These increases in revenues were due in part to increases in same store sales and in the average number of international stores open during 2003. On a constant dollar basis, same store sales increased 24.68% and 34.50% in the ~~second~~ third quarter and first ~~two~~three quarters of 2003, respectively, compared to the same ~~period~~periods in 2002. On a historical dollar basis, same store sales increased 67.08% and 6.38% in the ~~second~~third quarter and first ~~two~~ three quarters of 2003, respectively, compared to the same ~~period~~periods in 2002. The 2003 same store sales results indicate that the U.S. Dollar was generally weaker against the currencies of those countries in which we compete, as compared to the same ~~period~~ periods in 2002. There were 2,~~429~~457 and 2,~~290~~ 327 international stores in operation as of ~~June~~September 157, 2003 and ~~June~~September 168, 2002, respectively.

Cost of Sales / Operating Margin

The consolidated operating margin, which we define as revenues less cost of sales, ~~increased~~decreased ~~slightly~~$0.8 million or 1.1% to $72.8 million in the ~~second~~third quarter of 2003, ~~and~~from ~~decreased~~$73.6 ~~slightly~~million in the comparable period in 2002, and decreased $1.0 million or 0.4% to $233.6 million in the first ~~two~~three quarters of 2003, from $234.6 million in the comparable period in 2002, as summarized in the following table.

	Second Quarter of 2003				Second Quarter of 2002				First Two Quarters of 2003				First Two Quarters of 2002
	Third Quarterof 2003				Third Quarterof 2002				First Three Quarters of 2003				First Three Quarters of 2002
Revenues	$	~~295~~292.28	100.0	%	$	~~294~~277.1	100.0	%	$	~~607~~900.53	100.0	%	$	~~602~~879.12	100.0	%
Cost of sales		~~216~~220.61	7375.41	%		~~215~~203.85	73.4	%		~~446~~666.67	7374.51	%		~~441~~644.16	73.3	%
Consolidated operating margin	$	7872.68	2624.69	%	$	7873.36	26.6	%	$	~~160~~233.96	2625.59	%	$	~~161~~234.06	26.7	%

Consolidated cost of sales is comprised primarily of domestic Company-owned store and domestic distribution costs incurred to generate related revenues. Components of consolidated cost of sales primarily include food, labor and occupancy costs.

Consolidated cost of sales increased $016.86 million or 08.42% to $~~216~~220.61 million in the ~~second~~third quarter of 2003, from $~~215~~203.85 million in the comparable period in 2002, and increased $522.51 million or 13.24% to $~~446~~666.67 million in the first ~~two~~three quarters of 2003, from $~~441~~644.16 million in the comparable period in 2002. These net increases in consolidated cost of sales were driven in part by cost of sales changes at domestic Company-owned stores and domestic distribution, as more fully described below.

Domestic Company-Owned Stores

The domestic Company-owned store operating margin decreased $23.74 million or 1318.17% to $1815.30 million in the ~~second~~third quarter of 2003, from $2118.04 million in ~~the~~ the comparable period in 2002, and decreased $69.38 million or 1415.58% to $3752.21 million in the first ~~two~~three quarters of 2003, from $4361.59 million in the comparable period in 2002, as summarized in the following table.

Domestic Company-Owned Stores	~~Second~~Third ~~Quarter~~Quarterof of 2003				~~Second~~Third ~~Quarter~~Quarterof of 2002				First ~~Two~~Three Quarters of 2003				First ~~Two~~Three Quarters of 2002
Revenues	$	8582.94	100.0	%	$	8884.54	100.0	%	$	~~175~~258.82	100.0	%	$	~~178~~262.48	100.0	%
Cost of sales		67.64	7881.8	%		6766.50	7678.2	%		~~138~~206.61	7879.98	%		~~134~~200.9	7576.65	%
Store operating margin	$	1815.30	2118.2	%	$	2118.04	2321.8	%	$	3752.21	2120.12	%	$	4361.59	2423.45	%

Cost of sales increased as a percentage of store revenues in the ~~second~~third quarter and first ~~two~~three quarters of 2003, compared to the comparable period in 2002, due primarily to increases in food, ~~labor~~ and occupancy costs.

As a percentage of store revenues, food costs increased 01.49% to 2627.47% in the ~~second~~third quarter of 2003, from 2625.08% in the comparable period in 2002, and increased 01.93% to 2627.71% in the first ~~two~~three quarters of 2003, from 25.8% in the comparable period in 2002. These increases in food costs as a percentage of store revenues were ~~due~~ due primarily to a ~~change in product mix per order as a result of certain promotions and new product introductions, offset in part by a~~ market ~~decrease~~increase in overall food prices, including cheese~~. As a percentage of store revenues~~, ~~labor costs remained flat at 30.1% in the second quarter of 2003, compared to the same period in 2002,~~ and ~~increased~~a ~~0.5%~~change ~~to 30.3%~~ in ~~the~~product ~~first~~mix ~~two~~per ~~quarters~~order ofas ~~2003,~~a ~~from~~result ~~29.8% in the comparable period in 2002. This increase primarily reflects the impact~~ of ~~decreased same~~certain ~~store~~promotions ~~sales~~ and ~~the~~new ~~resulting~~product ~~effects on the fixed portion of store labor and, to a lesser extent, increased average wage rates at our stores~~introductions. As a percentage of store revenues, occupancy costs, which include rent, telephone, utilities and depreciation, increased 1.51% to 1011.60% in the ~~second~~third quarter of 2003, from 9.19% in the comparable period in 2002, and increased 1.43% to 10.25% in the first ~~two~~three quarters of 2003, from 89.82% in the comparable period in 2002. These increases in occupancy costs were due primarily to increases in ~~store operating costs including, telephone, utilities and~~ depreciation. ~~This~~These ~~increase~~increases in depreciation isare primarily a result of recent investments in our stores including the implementation of a new point of sale system ~~as well as significant investments in the re-imaging of substantially all of our stores~~.

Domestic Distribution

The domestic distribution operating margin ~~increased~~decreased $0.63 million or 31.56% to $1716.92 million in the ~~second~~third quarter of 2003, from $1716.35 million in the comparable period in 2002, and increased $2.75 million or 74.8% to $3753.79 million in the first ~~two~~three quarters of 2003, from $3551.04 million in the comparable period in 2002., ~~These results are~~ as summarized in the following ~~tables~~table.

Domestic Distribution	~~Second~~Third ~~Quarter~~Quarterof of 2003				~~Second~~Third ~~Quarter~~Quarterof of 2002				First ~~Two~~Three Quarters of 2003				First ~~Two~~Three Quarters of 2002
Revenues	$	~~154~~157.67	100.0	%	$	~~154~~143.76	100.0	%	$	~~322~~479.18	100.0	%	$	~~320~~464.51	100.0	%
Cost of sales		~~136~~141.75	8889.47	%		~~137~~127.41	88.85	%		~~284~~425.49	88.38	%		~~285~~412.57	8988.19	%
Distribution operating margin	$	1716.92	1110.63	%	$	1716.35	11.25	%	$	3753.79	11.72	%	$	3551.04	1011.91	%

Cost of sales as a percentage of distribution revenues for the third quarter of 2003 was ~~positively~~negatively impacted by increases in ~~volumes,~~certain ~~efficiencies~~commodity inprices, ~~the~~including ~~areas~~cheese, ~~of operations and purchasing~~ as well as ~~reductions~~increases in ~~certain~~fuel ~~commodity~~and ~~prices,~~insurance ~~including cheese~~costs. ~~Reductions~~Increases in certain food prices, including cheese, have a ~~positive~~ negative effect on the distribution operating margin as a percentage of distribution revenues due to the fixed dollar margin earned by domestic distribution on sales of ~~certain~~these food items, ~~including~~to ~~cheese~~stores. Had cheese prices remained constant ~~with~~ with 2002 levels, the domestic distribution operating margin for the ~~second~~third quarter ~~and first two quarters~~ of 2003 would have been approximately 1110.38% ~~and 11.4%~~ of distribution revenues, ~~respectively,~~ or 0.35% ~~less~~higher than the reported amounts for ~~each of~~ the ~~second~~third quarter ~~and~~of ~~first~~2003. ~~two~~These ~~quarters~~increases in cost of ~~2003~~sales as a percentage of distribution revenues were offset in part by a slight increase in volumes.

Cost of sales as a percentage of distribution revenues for the first three quarters of 2003 was positively impacted by increases in volumes and efficiencies in the areas of operations and purchasing, offset in part by increases in certain commodity prices.

General and Administrative Expenses

General and administrative expenses ~~decreased~~increased $811.18 million or 1730.0% to $3950.49 million in the ~~second~~third quarter of 2003, from $4739.51 million in the comparable period in 2002, and decreased $110.34 million or 120.4% to $80129.34 million in the first ~~two~~three quarters of 2003, from $91129.68 million in the ~~comparables~~comparable period in 2002. AsThe aincrease ~~percentage~~in ~~of total revenues,~~ general and administrative expenses ~~decreased 2.8% to 13.3% in~~ for the ~~second~~third quarter of 2003, ~~from~~was due primarily to approximately $16.1%4 million of general and administrative expenses in connection with the ~~comparable~~Company’s ~~period~~June in2003 ~~2002~~recapitalization, ~~and~~which ~~decreased~~primarily 2included $12.0%4 tomillion ~~13.2%~~of incertain ~~the~~make-whole ~~first~~payments and ~~two~~$4.0 ~~quarters~~million of ~~2003~~other charges, ~~from~~offset ~~15.2%~~ in ~~the~~part ~~comparable~~by ~~period~~managements’ continued focus on controlling overhead costs, including decreases in ~~2002~~administrative labor. ~~These improvements~~The decrease in general and administrative expenses asfor athe ~~percentage~~first ofthree ~~revenues~~quarters ~~were~~of 2003 was due inprimarily ~~part~~ to management’s continued focus on controlling overhead costs, including decreases in administrative labor~~, and decreases in depreciation and amortization~~. Additionally, ~~during~~in the second quarter of 2002, the Company expensed approximately $5.3 million of certain capitalized software costs. These decreases were offset in part by the aforementioned expenses incurred in connection with the Company’s June 2003 recapitalization.

Interest Expense

Interest expense ~~decreased~~increased $213.79 million or 1981.51% to $1131.0 million in the ~~second~~third quarter of 2003, from $1317.71 million in the comparable period in 2002, and ~~decreased~~increased $310.80 million or 1422.26% to $2354.43 million in the first ~~two~~three quarters of 2003, from $2744.23 million in the comparable period in 2002. These ~~decreases~~increases in interest expense were due primarily to a $15.6 million write-off of financing fees through interest expense in connection with the Company’s June 2003 recapitalization. These increases were offset in part by decreases in related variable interest rates on our senior credit facility borrowings, ~~and~~as well as reduced debt levels in the first two quarters of 2003. ~~The~~Additionally, in the third quarter of 2002, the Company ~~repaid~~recorded a $~~21.~~4.5 million write-off of ~~debt~~financing fees through interest expense in ~~the~~connection ~~first~~with ~~two~~the ~~quarters~~refinancing of ~~2003~~its senior credit facility.

~~Provision~~Other ~~for Income Taxes~~

~~Provision~~Other ~~for~~expenses ~~income taxes~~ increased $420.51 million to $1020.84 million in the ~~second~~third quarter of 2003, from $60.3 million in the comparable period in 2002, and increased $521.80 million to $2122.52 million in the first ~~two~~three quarters of 2003, from $151.72 million in the comparable period in 2002. These increases were due primarily to $20.4 million of bond tender fees incurred in connection with the Company’s June 2003 recapitalization.

Provision (Benefit) for Income Taxes

Provision (benefit) for income taxes decreased $17.3 million to a benefit of $11.0 million in the third quarter of 2003, from a provision of $6.3 million in the comparable period in 2002, and decreased $11.5 million to a provision of $10.5 million in the first three quarters of 2003, from a provision of $22.0 million in the comparable period in 2002. These decreases were primarily due to lower income related to the aforementioned expenses incurred as part of the Company’s June 2003 recapitalization.

Liquidity and Capital Resources

We had negative working capital of $169.32 million and cash and cash equivalents of $5125.70 million at ~~June~~September 157, 2003. Historically, we have operated with minimal positive or negative working capital primarily because our receivable collection periods and inventory turn rates are faster than the normal payment terms on our current liabilities. We generally collect our receivables within three weeks from the date of the related sale and we generally experience 40 to 50 inventory turns per year. In addition, our sales are not typically seasonal, which further limits our working capital requirements. These factors, coupled with significant and ongoing cash flows from operations, which are primarily used to repay long-term debt and invest in long-term assets, reduce our working capital amounts. Our primary sources of liquidity are cash flows from operations and availability of borrowings under our revolving credit facility. We expect to fund planned capital expenditures and debt repayments from these sources. We did not have any material commitments for capital expenditures as of September 7, 2003.

As of June 15, 2003, we had $580.7 million of long-term debt, of which $3.8 million was classified as a current liability. There were no borrowings under our $100 million revolving credit facility. Letters of credit issued under the revolving credit facility were $21.8 million. These letters of credit are primarily related to our casualty insurance programs and distribution center leases. Borrowings under the revolving credit facility are available to fund our working capital requirements, capital expenditures and other general corporate purposes.

Cash provided by operating activities was $60.5 million and $52.4 million in the first two quarters of 2003 and 2002, respectively. The $8.1 million increase was due primarily to a $9.2 million increase in net income.

Cash used in investing activities was $9.6 million and $47.2 million in the first two quarters of 2003 and 2002, respectively. The $37.6 million decrease was due primarily to a $21.9 million decrease in acquisitions of franchise operations and a $13.1 million decrease in capital expenditures. The decrease in acquisitions of franchise operations is due primarily to the Company’s purchase of our franchise operations in Arizona in the first quarter of 2002 (the “Arizona Acquisition”).

Cash used in financing activities was $21.8 million and $41.6 million in the first two quarters of 2003 and 2002, respectively. The $19.8 million decrease was due primarily to a $9.7 million decrease in distributions to parent primarily relating to the Arizona Acquisition and a $10.7 million decrease in repayments of long-term debt.

OnAs ~~June~~of 25September 7, 2003, ~~the~~we ~~Company,~~had ~~together~~$971.6 ~~with~~million ~~its~~of ~~parent~~long-term ~~and subsidiaries~~debt, ~~consummated~~of awhich ~~recapitalization transaction~~$22.1 ~~which~~million ~~included,~~was ~~among~~classified as ~~other~~a ~~things,~~current liability. Of the ~~issuance~~$22.1 ~~and~~million ~~sale~~classified byas ~~Domino’s,~~a ~~Inc.~~current ofliability, $~~403~~22.0 million ~~aggregate~~was ~~principal~~paid ~~amount~~subsequent atto ~~maturity~~the ofthird ~~8¼%~~quarter. ~~Senior~~There ~~Subordinated~~were ~~Notes~~no ~~due~~borrowings ~~2011~~under ~~(the~~our ~~“2011~~$125 ~~Notes”)~~million ~~and~~revolving ~~borrowings~~credit ~~by Domino’s, Inc~~facility. Letters of credit issued under the revolving credit facility were $~~610~~23.04 million. inThese ~~term~~letters ~~loans.~~of ~~The~~credit ~~Company~~are ~~also~~primarily ~~secured~~related ato ~~$125.0~~our ~~million~~casualty ~~revolving~~insurance ~~credit~~programs ~~facility~~and ~~(together~~distribution ~~with~~center ~~the~~leases. ~~term~~Borrowings ~~loans,~~under the ~~“2003~~revolving ~~Senior~~credit ~~Credit~~facility ~~Facility”).~~are ~~The~~available ~~Company~~to ~~used~~fund ~~the~~our ~~proceeds~~working ~~from~~capital requirements, ~~these~~capital ~~borrowings~~ expenditures and ~~cash~~other ~~from~~general ~~operations~~corporate ~~to:~~purposes.

•Cash ~~purchase~~provided anby ~~aggregate~~operating activities was $52.1 million and $66.0 million in the first three quarters of 2003 and 2002, respectively. The $~~206~~13.79 million ~~principal~~decrease ~~amount~~was due primarily to a $20.0 million decrease in net income and a $6.0 million non-cash change in loss (gain) on sale/disposal of ~~its~~assets. 10The 3change in loss (gain) on sale/8%disposal ~~Senior~~of ~~Subordinated~~assets ~~Notes~~is due ~~2009~~primarily (to the ~~“2009~~Company ~~Notes”)~~expensing ~~for~~$5.3 million of certain capitalized software costs in 2002 offset in part by an ~~aggregate~~increase ~~purchase~~in ~~price~~non-cash income from deferred gains recognized when the related notes receivable were collected. These decreases were offset in part by a $10.0 million increase in amortization of ~~approximately~~deferred financing costs and a $~~236~~3.73 million; increase in non-cash compensation expenses both related to the Company’s June 2003 recapitalization.

•Cash ~~repay~~used ~~all~~in ~~amounts~~investing ~~outstanding~~activities ~~under~~was $9.9 million and $59.1 million in the ~~previous~~first ~~senior~~three ~~credit~~quarters ~~facility;~~of 2003 and 2002, respectively. The $49.2 million decrease was due primarily to a $21.9 million decrease in acquisitions of franchise operations, a $20.8 million decrease in capital expenditures and a $7.7 million increase in repayments of notes receivable. The decrease in acquisitions of franchise operations is due primarily to the Company’s purchase of our franchise operations in Arizona in the first quarter of 2002. The decrease in capital expenditures was due in part to significant investments in 2002 in connections with the implementation of a new point of sale system and the related hardware in our Company-owned stores.

•Cash ~~distribute~~used ~~amounts~~in financing activities was $39.6 million and $57.2 million in the first three quarters of 2003 and 2002, respectively. The $17.5 million decrease was due primarily to ~~its~~activity ~~parent~~relating to ~~redeem~~the ~~all~~Company’s ofJune ~~its~~2003 ~~outstanding~~recapitalization, 11including a $231.5% ~~Cumulative~~million ~~Preferred~~increase ~~Stock~~in repayments of long-term debt, a $379.1 million increase in distributions to parent and a $16.4 million increase in cash paid for anfinancing ~~aggregate~~costs. ~~redemption~~These ~~price~~decreases ofwere ~~approximately~~offset by a $~~200~~645.51 million; increase in proceeds from the issuance of debt.

•On ~~distribute~~June ~~amounts~~25, to2003, Domino’s, Inc., together with its parent toand ~~pay~~subsidiaries, consummated a ~~dividend~~recapitalization ontransaction ~~its~~which ~~outstanding~~included, ~~common~~among ~~stock~~other things, in the issuance by Domino’s, Inc. of $403.0 million aggregate principal amount at maturity of ~~approximately~~8 1/4% Senior Subordinated Notes due 2011 (the “2011 Notes”) and borrowings by Domino’s, Inc. of $~~188~~610.30 million; in term loans. The Company also entered into a $125.0 million revolving credit facility (together with the term loans, the “2003 Senior Credit Facility”).

•The ~~make~~2011 Notes ~~compensatory~~accrue ~~make~~interest at a rate of 8 1/4% per annum and will be payable semi-~~whole~~annually ~~payments~~in toarrears ~~specified~~on ~~parent~~January ~~shareholders~~1 and July 1, commencing on January 1, 2004. Prior to July 1, 2006, the Company ~~officers~~may redeem, ~~directors~~at ~~and~~a ~~employees~~fixed ~~who~~price, ~~hold~~up to 40% of the aggregate principal amount of the 2011 Notes with the proceeds of equity offerings, if any, by the Company or its parent. ~~stock~~Prior to ~~options~~July 1, 2007, the Company may also redeem the 2011 Notes, as a whole, but not in part, upon the ~~aggregate~~occurrence ~~amount~~of a change in control, as defined in the 2011 Notes. Beginning July 1, 2007, the Company may redeem all or a part of ~~approximately~~the ~~$12~~2011 Notes at fixed redemption prices, ranging from 104.4125% ~~million;~~of par in 2007 to 100% of par in 2009 and thereafter. In the event of a change in control, as defined in the 2011 Notes, the Company will be obligated to repurchase the 2011 Notes tendered by the holders at a fixed price. The 2011 Notes are guaranteed by most of the Company’s domestic subsidiaries as well as one foreign subsidiary.

•The ~~pay~~2003 ~~related~~Senior ~~transaction~~Credit ~~fees~~Facility consists of $610.0 million in term loans expiring in June 2010 and ~~expenses~~a $125.0 million revolving credit facility expiring in June 2009. The agreement requires annual amortization of the term loans, made in equal quarterly payments, of $10.0 million in 2003, $30.0 million in 2004, $45.0 million in 2005, $60.0 million in 2006, $75.0 million in 2007, $85.0 million in 2008, $95.0 million in 2009 and $210.0 million in 2010. Pre-payments of principal are applied to future quarterly amortization payments, as defined in the 2003 Senior Credit Facility. The 2003 Senior Credit Facility contains certain financial and non-financial covenants and is guaranteed by the Company’s parent and most of the Company’s domestic subsidiaries and one foreign subsidiary. The 2003 Senior Credit Facility is secured by a first priority lien on substantially all of the assets of the Company. Borrowings under the 2003 Senior Credit Facility bear interest at LIBOR plus an applicable margin of between 275 and 300 basis points.

The 2011 Notes accrue interest at a rate of 8¼% per annum and will be payable semi-annually in arrears on January 1 and July 1, commencing on January 1, 2004. Prior to July 1, 2006, the Company may redeem, at a fixed price, up to 40% of the aggregate principal amount of the 2011 Notes with the proceeds of equity offerings, if any, by the Company or its parent. Prior to July 1, 2007, the Company may also redeem the 2011 Notes, as a whole, but not in part, upon the occurrence of a change in control, as defined in the 2011 Notes. Beginning July 1, 2007, the Company may redeem all or a part of the 2011 Notes at fixed redemption prices, ranging from 104.125% of par in 2007 to 100% of par in 2009 and thereafter. In the event of a change in control, as defined in the 2011 Notes, the Company will be obligated to repurchase the 2011 Notes tendered by the holders at a fixed price. The 2011 Notes are guaranteed by most of the Company’s domestic subsidiaries as well as one foreign subsidiary.

The 2003 Senior Credit Facility consists of $610.0 million in term loans expiring in June 2010 and a $125.0 million revolving credit facility expiring in June 2009. The agreement requires annual amortization of the term loans, made in equal quarterly payments, of $10.0 million in 2003, $30.0 million in 2004, $45.0 million in 2005, $60.0 million in 2006, $75.0 million in 2007, $85.0 million in 2008, $95.0 million in 2009 and $210.0 million in 2010. The 2003 Senior Credit Facility contains certain financial and non-financial covenants and is guaranteed by the Company’s parent and most of the Company’s domestic subsidiaries and one foreign subsidiary. The 2003 Senior Credit Facility is secured by a first priority lien on substantially all of the assets of the Company. Borrowings under the 2003 Senior Credit Facility bear interest at LIBOR plus an applicable margin not to exceed 300 basis points.

Based upon the current level of operations and anticipated growth, we believe that the cash generated from operations and amounts available under the revolving credit facility will be adequate to meet our anticipated debt service requirements, capital expenditures and working capital needs for the next several years. There can be no assurance, however, that our business will generate sufficient cash flows from operations or that future borrowings will be available under the senior credit facility or through other sources to enable us to service our indebtedness, including the senior credit facility and the senior subordinated notes, or to make anticipated capital expenditures. Our future operating performance and our ability to service or refinance the senior subordinated notes and to service, extend or refinance the senior credit facility will be subject to future economic conditions and subject to financial, business and other factors, many of which are beyond our control. Additionally, the Company may be requested to provide funds to TISM, Inc., our parent company (“TISM”), for stock dividends, stock repurchases, distributions and/or other cash needs of TISM.

We believe that funds generated from operations and available borrowings under the revolving credit facility will be adequate to meet our debt service requirements, capital expenditures and working capital requirements for the near future. Our ability to continue to fund these items and continue to reduce debt could be adversely affected by the occurrence of any of the events described under “Risk Factors” in our Form 10-K for the year ended December 29, 2002. However, our business may not generate sufficient cash flows from operations or future borrowings available to us under the revolving credit portion of our senior credit facility may not be sufficient to enable us to pay our indebtedness, or to fund our liquidity needs. Additionally, we may be requested to provide funds to TISM, Inc., our parent company (“TISM”), for stock dividends, stock repurchases, distributions and/or other cash needs of TISM.

New Accounting Pronouncement

In January 2003, the FASB issued FASB Interpretation No. 46, “Consolidation of Variable Interest Entities, an interpretation of ARB No. 51” (“FIN 46”). FIN 46 addresses the consolidation of entities whose equity holders have either (a) not provided sufficient equity at risk to allow the entity to finance its own activities or (b) do not possess certain characteristics of a controlling financial interest. FIN 46 requires the consolidation of these entities, known as variable interest entities (“VIEs”), by the primary beneficiary of the entity. FIN 46 applies immediately to variable interests in VIEs created or obtained after January 31, 2003. For variable interests of a non-public equity company in a VIE created before February 1, 2003, FIN 46 is applied to the VIE no later than the end of the first annual reporting period beginning after June 15, 2003, which is the end of our fiscal 2004. We have concluded that we have not created or obtained any VIEs subsequent to January 31, 2003 that would require consolidation. We are assessing FIN 46 as it relates to VIEs created before February 1, 2003 and, although we have not completed our analysis, we currently do not expect adoption to have a material effect on our financial statements.

Contractual Obligations

The Company’s contractual debt obligations, primarily relating to principal payment requirements under the 2011 Notes and the 2003 Senior Credit Facility, are summarized in the following table.

		2003			2004			2005			2006			2007			Thereafter			Total
Long-term debt		$	22,091		$	7,046		$	41,957		$	55,931		$	52,438		$	795,161		$	974,624

The Company’s other significant contractual obligations, including operating leases, have not changed significantly from December 29, 2002.

Forward-Looking Statements

Certain statements contained in this filing relating to capital spending levels and the adequacy of our capital resources are forward-looking. Also, statements that contain words such as “believes,” “expects,” “anticipates,” “intends,” “estimates” or similar expressions are forward-looking statements. Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. Among these risks and uncertainties are competitive factors, increases in our operating costs, ability to retain our key personnel, our substantial leverage, ability to implement our growth and cost-saving strategies, industry trends and general economic conditions, adequacy of insurance coverage and other factors, all of which are described in the Form 10-K for the year ended December 29, 2002 and our other filings with the Securities and Exchange Commission. We do not undertake to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Market Risk

The Company is exposed to market risks from interest rate changes on our variable rate debt. Management actively monitors this exposure. The Company does not engage in speculative transactions nor does it hold or issue financial instruments for trading purposes.

Interest Rate Derivatives

The Company may enter into interest rate swaps, collars or similar instruments with the objective of reducing volatility relating to our borrowing costs.

The Company is party to ~~an interest rate collar and~~ four interest rate swap agreements which effectively convert the variable ~~Eurodollar~~LIBOR component of the effective interest rate on a portion of the Company’s debt under its senior credit facility to various fixed rates over various terms. ~~These agreements are summarized as follows:~~

Derivative	Total Notional Amount	Term	Rate
Interest Rate Collar	$70.0 million	June 2001—June 2003	3.86%—Floor 6.00%—Ceiling
Interest Rate Swap	$70.0 million	June 2001—June 2004	4.90%
Interest Rate Swap	$35.0 million	September 2001—September 2003	3.645%
Interest Rate Swap	$35.0 million	September 2001—September 2004	3.69%
Interest Rate Swap	$75.0 million	August 2002—June 2005	3.25%

Additionally, in the third quarter of 2003, the Company entered into two interest rate swap agreements which effectively convert the fixed component of the Company’s debt under the 2011 Notes to variable LIBOR rates over the term of the 2011 Notes.

These agreements are summarized in the following table.

Derivative	Total Notional Amount	Term	Rate
Interest Rate Swap	$70.0 million	June 2001 –June 2004	4.90%
Interest Rate Swap	$35.0 million	September 2001 –September 2003	3.645%
Interest Rate Swap	$35.0 million	September 2001 –September 2004	3.69%
Interest Rate Swap	$75.0 million	August 2002 – June 2005	3.25%
Interest Rate Swap	$50.0 million	August 2003 – July 2011	LIBOR plus 319 basis points
Interest Rate Swap	$50.0 million	August 2003 – July 2011	LIBOR plus 324 basis points

Interest Rate Risk

The Company’s variable interest expense is sensitive to changes in the general level of interest rates. As of ~~June~~September 157, 2003, a portion of the Company’s debt is borrowed at ~~Eurodollar~~LIBOR rates plus a blended margin rate of 23.2509%. As of ~~June~~September 157, 2003, the weighted average interest rate on our $77455.30 million of variable interest debt was 34.5428%.

The Company had total interest expense of approximately $2354.43 million in the first ~~two~~three quarters of 2003. The estimated increase in interest expense for this period from a hypothetical 200 basis point adverse change in applicable variable interest rates would be approximately $02.73 million.

Item 4. Controls and Procedures

Within 90 days prior to the date of the filing of this report, the Company’s Chief Executive Officer and Chief Financial Officer conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Exchange Act Rules 13a-14 and 15d-14. Based upon that evaluation such officers concluded that our disclosure controls and procedures are effective to ensure that information is gathered, analyzed and disclosed on a timely basis.

b.	There have been no significant changes in the Company’s internal controls or in other factors that could significantly affect these controls subsequent to the date of the evaluation referred to above.

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PART II. OTHER INFORMATION

Item 6. Exhibits and Reports on Form 8-K

Exhibits

Exhibit Number		Description
ExhibitNumber		Description
31.1		Certification by David A. Brandon pursuant to Rule 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2		Certification by Harry J. Silverman pursuant to Rule 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1		Certification by David A. Brandon pursuant to Section 1350, Chapter 63 of Title 18, United States Code, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2		Certification by Harry J. Silverman pursuant to Section 1350, Chapter 63 of Title 18, United States Code, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

b. The following Current Reports on Form 8-K were filed with or furnished ~~with~~to the SEC during the period covered in this report:

Current Report on Form 8-K dated May 28, 2003 which included a press release to announce the commencement of a tender offer for all outstanding 10 3/8% Senior Subordinated Notes due January 15, 2009 (the “Notes”) issued by the Company and to solicit the consent of holders of the Notes to amend certain provisions of the Indenture governing the Notes.

Current Report on Form 8-K dated June 10, 2003 which included a press release to announce that it had fixed the tender offer consideration and the total purchase price to be paid for the Notes validly tendered and accepted for purchase. The Company also announced in a separate press release that it had received consents from holders of the Notes representing in excess of a majority in principal amount of its outstanding Notes and the consent condition relating to the pending tender offer for all of the outstanding Notes had been satisfied.

Current Report on Form 8-K dated June 25, 2003 which included a press release stating that the Company accepted for purchase $206.7 million in principal amount of the outstanding Notes issued by the Company.

Current Report on Form 8-K dated June 25, 2003 stating that the Company, together with its parent and subsidiaries, consummated a recapitalization transaction. Accompanying exhibits included the related indenture and credit agreement, as well as stock option plan amendment documentation and the employment agreement with the Company’s Chief Executive Officer.

Current Report on Form 8-K dated July 29, 2003 which included a press release announcing the Company’s second quarter 2003 financial results.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned duly authorized officer.

		DOMINO’S, INC. (Registrant)
	DOMINO’S, INC.
Date: July 29, 2003		/s/ HARRY J. SILVERMAN
	(Registrant)
		Chief Financial Officer
Date: October 22, 2003	/s/ Harry J. Silverman
	Chief Financial Officer

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