Segment information

12 Months Ended

Dec. 30, 2017

Segment Reporting [Abstract]

Segment Information

Segment information

The Company is strategically aligned into two global brands, Dunkin’ Donuts and Baskin-Robbins, which are further segregated between U.S. operations and international operations. As such, the Company has determined that it has four operating segments, which are its reportable segments: Dunkin’ Donuts U.S., Dunkin’ Donuts International, Baskin-Robbins U.S., and Baskin-Robbins International. Dunkin’ Donuts U.S., Baskin-Robbins U.S., and Dunkin’ Donuts International primarily derive their revenues through royalty income and franchise fees. Baskin-Robbins U.S. also derives revenue through license fees from a third-party license agreement and rental income. Dunkin’ Donuts U.S. also derives revenue through rental income. Prior to the sale of remaining company-operated restaurants in the fourth quarter of fiscal year 2016, Dunkin’ Donuts U.S. also derived revenue through retail sales at company-operated restaurants. Baskin-Robbins International primarily derives its revenues from sales of ice cream products, as well as royalty income, franchise fees, and license fees. The operating results of each segment are regularly reviewed and evaluated separately by the Company’s senior management, which includes, but is not limited to, the chief executive officer. Senior management primarily evaluates the performance of its segments and allocates resources to them based on operating income adjusted for amortization of intangible assets, long-lived asset impairment charges, impairment of our joint ventures, and other infrequent or unusual charges, which does not reflect the allocation of any corporate charges. This profitability measure is referred to as segment profit. When senior management reviews a balance sheet, it is at a consolidated level. The accounting policies applicable to each segment are generally consistent with those used in the consolidated financial statements.

Revenues for all operating segments include only transactions with unaffiliated customers and include no intersegment revenues. Revenues reported as “Other” include revenues earned through certain licensing arrangements with third parties in which our brand names are used, including the licensing fees earned from the Dunkin’ K-Cup® pod licensing agreement and sales of Dunkin' Donuts branded ready-to-drink bottled iced coffee and retail packaged coffee, revenues generated from online training programs for franchisees, and revenues from the sale of Dunkin’ Donuts products in certain international markets, all of which are not allocated to a specific segment. Revenues by segment were as follows (in thousands):

	Revenues
	Fiscal year ended
	December 30, 2017		December 31, 2016	December 26, 2015
Dunkin’ Donuts U.S.	$	641,896	607,964	591,062
Dunkin’ Donuts International	20,573		22,903	22,973
Baskin-Robbins U.S.	49,204		47,512	47,140
Baskin-Robbins International	114,680		119,015	117,076
Total reportable segment revenues	826,353		797,394	778,251
Other	34,148		31,495	32,682
Total revenues	$	860,501	828,889	810,933

Revenues for foreign countries are represented by the Dunkin’ Donuts International and Baskin-Robbins International segments above. No individual foreign country accounted for more than 10% of total revenues for any fiscal year presented.

Amounts included in “Corporate” in the segment profit table below include corporate overhead costs, such as payroll and related benefit costs and professional services, net of “Other” revenues reported above. Segment profit by segment was as follows (in thousands):

	Segment profit
	Fiscal year ended
	December 30, 2017			December 31, 2016		December 26, 2015
Dunkin’ Donuts U.S.	$	501,451		466,976		431,065
Dunkin’ Donuts International	6,970			9,658		10,240
Baskin-Robbins U.S.	34,212			34,240		29,289
Baskin-Robbins International	39,336			38,967		36,218
Total reportable segments	581,969			549,841		506,812
Corporate	(112,015		)	(112,899	)	(161,934	)
Interest expense, net	(101,110		)	(100,270	)	(96,341	)
Amortization of other intangible assets	(21,335		)	(22,079	)	(24,688	)
Long-lived asset impairment charges	(1,617		)	(149	)	(623	)
Loss on debt extinguishment and refinancing transactions	(6,996		)	—		(20,554	)
Other gains (losses), net	391			(1,195	)	(1,084	)
Income before income taxes	$	339,287		313,249		201,588

Net income (loss) of equity method investments, including amortization on investor-level intangible assets, is included in segment profit for the Dunkin’ Donuts International and Baskin-Robbins International reportable segments. Amounts reported as “Other” in the segment profit table below include the impairment charge recorded in fiscal year 2015 related to our investment in the Japan JV and the related reduction in depreciation and amortization, net of tax, as well as the reduction in depreciation and amortization, net of tax, reported by the South Korea JV as a result of the impairment charge recorded in fiscal year 2011 (see note 6). Net income (loss) of equity method investments by reportable segment was as follows (in thousands):

	Net income (loss) of equity method investments
	Fiscal year ended
	December 30, 2017			December 31, 2016	December 26, 2015
Dunkin’ Donuts International	$	(83	)	622	1,295
Baskin-Robbins International	11,117			9,803	10,535
Total reportable segments	11,034			10,425	11,830
Other	4,164			4,127	(53,575	)
Total net income (loss) of equity method investments	$	15,198		14,552	(41,745	)

Depreciation is reflected in segment profit for each reportable segment. Depreciation by reportable segments was as follows (in thousands):

	Depreciation
	Fiscal year ended
	December 30, 2017		December 31, 2016	December 26, 2015
Dunkin’ Donuts U.S.	$	11,296	11,378	12,229
Dunkin’ Donuts International	31		27	7
Baskin-Robbins U.S.	320		272	358
Baskin-Robbins International	53		74	60
Total reportable segments	11,700		11,751	12,654
Corporate	8,384		8,707	7,902
Total depreciation	$	20,084	20,458	20,556

Property and equipment, net by geographic region as of December 30, 2017 and December 31, 2016 is based on the physical locations within the indicated geographic regions and are as follows (in thousands):

	December 30, 2017		December 31, 2016
United States	$	168,933	176,524
International	72		138
Total property and equipment, net	$	169,005	176,662