10.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 segment principally consists of distribution sales to franchised Papa John’s restaurants located in the United Kingdom and Mexico 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				Nine Months Ended
	September 30,		September 24,		September 30,		September 24,
(In thousands)	2018		2017		2018		2017
Revenues
Domestic Company-owned restaurants	$	158,285	$	196,267	$	529,906	$	605,919
North America commissaries		146,240		164,028		461,408		495,427
North America franchising		12,806		25,567		61,524		79,762
International		30,793		31,792		100,977		90,540
All others		15,883		14,055		45,520		44,105
Total revenues	$	364,007	$	431,709	$	1,199,335	$	1,315,753

Intersegment revenues:
North America commissaries	$	46,023	$	60,364	$	153,389	$	181,302
North America franchising		464		709		2,499		2,224
International		70		71		213		202
All others		6,949		3,716		22,601		12,826
Total intersegment revenues	$	53,506	$	64,860	$	178,702	$	196,554

Income (loss) before income taxes:
Domestic Company-owned restaurants	$	(183)	$	8,449	$	15,350	$	39,486
North America commissaries (1)		6,195		10,087		23,535		34,418
North America franchising (2)		9,394		22,858		53,133		71,732
International		4,519		3,909		10,334		11,518
All others (1) (3)		(2,501)		784		(5,139)		2,149
Unallocated corporate expenses (1) (2) (3)		(37,046)		(15,111)		(74,500)		(50,578)
Elimination of intersegment (profits) losses		(331)		(27)		(599)		(447)
Total (loss) income before income taxes	$	(19,953)	$	30,949	$	22,114	$	108,278

Property and equipment:
Domestic Company-owned restaurants	$	231,817
North America commissaries		139,317
International		17,019
All others		68,767
Unallocated corporate assets		195,964
Accumulated depreciation and amortization		(428,374)
Net property and equipment	$	224,510

(1)

The Company refined its overhead allocation process in 2018 resulting in transfers of expenses from Unallocated corporate expenses of $3.4 million to other segments, primarily North America commissaries of $1.9 million and All others of $900,000 for the three months ended September 30, 2018. The nine months ended September 30, 2018 included transfers of expenses from Unallocated corporate expenses of $10.6 million to other segments, primarily North America commissaries of $6.1 million and All others of $2.7 million. These allocations were eliminated in consolidation.

(2)

Includes Special charges of $9.9 million in North America franchising and $14.9 million in Unallocated corporate expenses for both the three and nine-month periods ended September 30, 2018. See Note 9 for additional information.

(3)

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