9.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, franchise contributions to marketing funds 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:


	Three Months Ended
	April 1,		March 26,
(In thousands)	2018		2017
Revenues
Domestic Company-owned restaurants	$	190,242	$	206,896
North America commissaries		161,713		171,340
North America franchising		24,806		27,607
International		35,532		28,518
All others		15,076		14,905
Total revenues	$	427,369	$	449,266

Intersegment revenues:
North America commissaries	$	55,874	$	61,736
North America franchising		1,019		764
International		70		63
All others		8,074		5,026
Total intersegment revenues	$	65,037	$	67,589

Income (loss) before income taxes:
Domestic Company-owned restaurants	$	7,229	$	15,487
North America commissaries (1)		8,610		12,244
North America franchising		22,359		24,875
International		3,537		4,344
All others (1) (2)		(909)		460
Unallocated corporate expenses (1) (2)		(18,131)		(16,381)
Elimination of intersegment (profits) losses		(333)		842
Total income before income taxes	$	22,362	$	41,871

Property and equipment:
Domestic Company-owned restaurants	$	232,662
North America commissaries		137,002
International		17,784
All others		60,993
Unallocated corporate assets		193,593
Accumulated depreciation and amortization		(412,458)
Net property and equipment	$	229,576

(1)

The Company refined its overhead allocation process in 2018 resulting in transfers of expenses from Unallocated corporate expenses of $3.8 million to other segments, primarily North America commissaries of $2.3 million and All others of $900,000. These allocations were eliminated in consolidation.

(2)

Certain prior year amounts have been reclassified to conform to current year presentation.