Segment Information

12 Months Ended

Dec. 27, 2015

Segment Information

Segment Information

20.  Segment Information

We have five reportable segments for all years presented: 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, including breadsticks, cheesesticks, chicken poppers and wings, dessert items and canned or bottled beverages. 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 our 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 point-of-sale system, 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 or 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. The accounting policies of the segments are the same as those described in the summary of significant accounting policies (see Note 2).

Our segment information is as follows:

(In thousands)	2015			2014			2013
Revenues from external customers:
Domestic Company-owned restaurants	$	756,307		$	701,854		$	635,317
Domestic commissaries	615,610			629,492			578,870
North America franchising	96,056			90,169			82,873
International	104,691			102,455			88,640
All others	64,711			74,179			53,322
Total revenues from external customers	$	1,637,375		$	1,598,149		$	1,439,022
Intersegment revenues:
Domestic commissaries	$	224,067		$	220,406		$	191,756
North America franchising	2,690			2,400			2,222
International	292			320			280
All others	14,821			22,851			14,197
Total intersegment revenues	$	241,870		$	245,977		$	208,455
Depreciation and amortization:
Domestic Company-owned restaurants	$	14,841		$	13,829		$	13,284
Domestic commissaries	6,205			6,776			5,690
International	2,935			3,903			3,966
All others	4,829			6,156			5,320
Unallocated corporate expenses	11,497			9,301			6,845
Total depreciation and amortization	$	40,307		$	39,965		$	35,105
Income (loss) before income taxes:
Domestic Company-owned restaurants	$	56,452		$	40,969		$	34,590
Domestic commissaries	44,721			39,317			37,804
North America franchising	83,315			77,009			70,201
International	10,891			7,250			2,803
All others	845			(9		)	3,490
Unallocated corporate expenses (1)	(75,896		)	(49,440		)	(41,025		)
Elimination of intersegment profits	(1,181		)	(841		)	(1,754		)
Total income before income taxes	$	119,147		$	114,255		$	106,109

(1) Includes a $12.3 million legal settlement expense in 2015.  See Note 17 for additional information.

(In thousands)	2015			2014			2013
Property and equipment:
Domestic Company-owned restaurants	$	223,246		$	208,488		$	195,526
Domestic commissaries	110,344			107,992			104,509
International	14,826			25,443			27,225
All others	47,481			46,013			41,064
Unallocated corporate assets	179,665			169,105			158,462
Accumulated depreciation and amortization	(361,518		)	(337,584		)	(314,689		)
Net property and equipment	$	214,044		$	219,457		$	212,097
Expenditures for property and equipment:
Domestic Company-owned restaurants	$	14,631		$	23,475		$	13,149
Domestic commissaries	3,924			5,756			9,791
International	4,540			1,708			3,754
All others	4,701			5,906			4,689
Unallocated corporate	11,176			11,810			19,367
Total expenditures for property and equipment	$	38,972		$	48,655		$	50,750