Segment Information

3 Months Ended

Mar. 26, 2017

Segment Information

Segment Information

6.Segment Information

We have five reportable segments: domestic Company-owned restaurants, North America 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 North America 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 in the United States and Canada. 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, 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 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):

(In thousands)	March 26, 2017		March 27, 2016
Revenues from external customers:
Domestic Company-owned restaurants	$	206,896	$	205,679
North America commissaries		171,340		155,954
North America franchising		27,607		26,476
International		28,518		27,455
All others		14,905		13,031
Total revenues from external customers	$	449,266	$	428,595
Intersegment revenues:
North America commissaries	$	61,736	$	58,326
North America franchising		764		713
International		63		65
All others		5,026		4,097
Total intersegment revenues	$	67,589	$	63,201
Income (loss) before income taxes:
Domestic Company-owned restaurants	$	15,487	$	20,187
North America commissaries		12,244		11,546
North America franchising		24,875		23,580
International		4,344		3,038
All others		(166)		51
Unallocated corporate expenses		(15,755)		(16,332)
Elimination of intersegment profit and losses		842		(661)
Total income before income taxes	$	41,871	$	41,409
Property and equipment:
Domestic Company-owned restaurants	$	226,420
North America commissaries		130,475
International		16,426
All others		57,163
Unallocated corporate assets		195,321
Accumulated depreciation and amortization		(395,040)
Net property and equipment	$	230,765