Segment Information

3 Months Ended

Mar. 30, 2014

Segment Information

Segment Information

7. Segment Information

We have five reportable segments: domestic Company-owned restaurants, domestic commissaries, North America franchising, international operations, and “all other” units.

The domestic Company-owned restaurant segment consists of the operations of all domestic (“domestic” is defined as contiguous United States) Company-owned restaurants and derives its revenues principally from retail sales of pizza and side items, such as breadsticks, cheesesticks, chicken poppers, chicken wings, dessert pizza and soft drinks to the general public. The domestic commissary segment consists of the operations of our regional dough production and product distribution centers and derives its revenues principally from the sale and distribution of food and paper products to domestic Company-owned and franchised restaurants. The North America franchising segment consists of our franchise sales and support activities and derives its revenues from sales of franchise and development rights and collection of royalties from our franchisees located in the United States and Canada. The international operations segment principally consists of Company-owned restaurants in China and distribution sales to franchised Papa John’s restaurants located in the United Kingdom, Mexico and China and our franchise sales and support activities, which derive revenues from sales of franchise and development rights and the collection of royalties from our international franchisees. International franchisees are defined as all franchise operations outside of the United States and Canada. All other business units that do not meet the quantitative thresholds for determining reportable segments, which are not operating segments, we refer to as our “all other” segment, which consists of operations that derive revenues from the sale, principally to Company-owned and franchised restaurants, of printing and promotional items, risk management services, and information systems and related services used in restaurant operations, including our online and other technology-based ordering platforms.

Generally, we evaluate performance and allocate resources based on profit or loss from operations before income taxes and intercompany eliminations. Certain administrative and capital costs are allocated to segments based upon predetermined rates or actual estimated resource usage. We account for intercompany sales and transfers as if the sales or transfers were to third parties and eliminate the activity in consolidation.

Our reportable segments are business units that provide different products or services. Separate management of each segment is required because each business unit is subject to different operational issues and strategies. No single external customer accounted for 10% or more of our consolidated revenues.

Our segment information is as follows (in thousands):

	Three Months Ended
	March 30, 2014			March 31, 2013
Revenues from external customers:
Domestic Company-owned restaurants	$	178,193		$	157,898
Domestic commissaries	164,047			143,894
North America franchising	22,758			21,279
International	23,629			19,926
All others	12,750			12,607
Total revenues from external customers	$	401,377		$	355,604
Intersegment revenues:
Domestic commissaries	$	54,721		$	46,797
North America franchising	604			553
International	68			67
All others	3,730			3,168
Total intersegment revenues	$	59,123		$	50,585
Income (loss) before income taxes:
Domestic Company-owned restaurants	$	13,285		$	10,956
Domestic commissaries	10,431			10,163
North America franchising	19,484			18,222
International	732			341
All others	590			659
Unallocated corporate expenses	(12,461		)	(9,518		)
Elimination of intersegment profit	(651		)	(526		)
Total income before income taxes	$	31,410		$	30,297
Property and equipment:
Domestic Company-owned restaurants	$	199,613
Domestic commissaries	104,465
International	27,034
All others	41,929
Unallocated corporate assets	161,545
Accumulated depreciation and amortization	(321,159		)
Net property and equipment	$	213,427