Business Segment Information

9 Months Ended

Sep. 27, 2016

Segment Reporting [Abstract]

Business Segment Information

Business Segment Information

The Company operates three business segments. The Company Bakery-Cafe Operations segment is comprised of the operating activities of the bakery-cafes owned by the Company. The Company-owned bakery-cafes conduct business under the Panera Bread®, Saint Louis Bread Co.® or Paradise Bakery & Café® names. These bakery-cafes offer some or all of the following: fresh baked goods, made-to-order sandwiches on freshly baked breads, soups, salads, pasta dishes, custom roasted coffees, and other complementary products through on-premise sales, as well as catering.

The Franchise Operations segment is comprised of the operating activities of the franchise business unit, which licenses qualified operators to conduct business under the Panera Bread or Paradise Bakery & Café names and also monitors the operations of these bakery-cafes. Under the terms of most of the agreements, the licensed operators pay royalties and fees to the Company in return for the use of the Panera Bread or Paradise Bakery & Café names.

The Fresh Dough and Other Product Operations segment supplies fresh dough, produce, tuna, and cream cheese, and indirectly supplies proprietary sweet goods items through a contract manufacturing arrangement, to Company-owned and franchise-operated bakery-cafes. The fresh dough is sold to a number of both Company-owned and franchise-operated bakery-cafes at a delivered cost generally not to exceed 27 percent of the retail value of the end product. The sales and related costs to the franchise-operated bakery-cafes are separately stated line items in the Consolidated Statements of Income. The sales, costs, and operating profit related to the sales to Company-owned bakery-cafes are eliminated in consolidation in the Consolidated Statements of Income.

Segment information related to the Company’s three business segments is as follows (in thousands):

	For the 13 Weeks Ended						For the 39 Weeks Ended
	September 27, 2016			September 29, 2015			September 27, 2016			September 29, 2015
Revenues:
Company bakery-cafe operations	$	593,434		$	584,664		$	1,801,502		$	1,756,464
Franchise operations	38,210			33,740			114,079			98,952
Fresh dough and other product operations	103,041			96,198			301,320			284,089
Intercompany sales eliminations	(50,479		)	(49,948		)	(148,642		)	(149,690		)
Total revenues	$	684,206		$	664,654		$	2,068,259		$	1,989,815
Segment profit:
Company bakery-cafe operations (1)	$	92,267		$	87,513		$	286,216		$	266,456
Franchise operations	36,923			32,461			110,141			95,219
Fresh dough and other product operations	6,215			4,607			19,102			16,238
Total segment profit	$	135,405		$	124,581		$	415,459		$	377,913
Depreciation and amortization	$	38,985		$	33,885		$	114,073		$	100,167
Unallocated general and administrative expenses	42,251			36,296			126,719			99,782
Pre-opening expenses	1,948			2,298			5,584			6,253
Interest expense	2,529			1,363			6,059			2,266
Other (income) expense, net	411			(55		)	274			948
Income before income taxes	$	49,281		$	50,794		$	162,750		$	168,497
Depreciation and amortization:
Company bakery-cafe operations	$	28,894		$	26,004		$	85,828		$	78,698
Fresh dough and other product operations	2,519			2,321			7,157			6,855
Corporate administration	7,572			5,560			21,088			14,614
Total depreciation and amortization	$	38,985		$	33,885		$	114,073		$	100,167
Capital expenditures:
Company bakery-cafe operations	$	33,723		$	39,756		$	104,070		$	117,866
Fresh dough and other product operations	3,026			3,217			13,585			7,710
Corporate administration	10,660			5,472			28,709			27,725
Total capital expenditures	$	47,409		$	48,445		$	146,364		$	153,301

(1) Includes refranchising losses of $0.1 million and $2.2 million for the thirteen weeks ended September 27, 2016 and September 29, 2015, respectively, and $9.1 million and $11.7 million for the thirty-nine weeks ended September 27, 2016 and September 29, 2015, respectively.

	September 27, 2016		December 29, 2015
Segment assets:
Company bakery-cafe operations	$	910,698	$	953,717
Franchise operations	18,462		13,049
Fresh dough and other product operations	85,940		75,634
Total segment assets	$	1,015,100	$	1,042,400
Unallocated cash and cash equivalents	$	86,598	$	241,886
Unallocated trade and other accounts receivable	7,022		2,968
Unallocated property and equipment	114,536		107,333
Unallocated deposits and other	5,560		6,660
Other unallocated assets	24,720		39,592
Total assets	$	1,253,536	$	1,440,839

“Unallocated cash and cash equivalents” relates primarily to corporate cash and cash equivalents, “unallocated trade and other accounts receivable” relates primarily to rebates and interest receivable, “unallocated property and equipment” relates primarily to corporate fixed assets, “unallocated deposits and other” relates primarily to insurance deposits, and “other unallocated assets” relates primarily to refundable income taxes.