Segment Information

12 Months Ended

Dec. 25, 2016

Segment Information

Segment Information

20.  Segment Information

We have five reportable segments for all years presented: 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 bottledbeverages. 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 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 andintercompany 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)	2016		2015			2014
Revenues from external customers:
Domestic Company-owned restaurants	$	815,931	$	756,307	$	701,854
North America commissaries		623,883		615,610		629,492
North America franchising		102,980		96,056		90,169
International		113,103		104,691		102,455
All others		57,723		64,711		74,179
Total revenues from external customers	$	1,713,620	$	1,637,375	$	1,598,149
Intersegment revenues:
North America commissaries	$	236,896	$	224,067	$	220,406
North America franchising		2,869		2,690		2,400
International		269		292		320
All others		16,410		14,821		22,851
Total intersegment revenues	$	256,444	$	241,870	$	245,977
Depreciation and amortization:
Domestic Company-owned restaurants	$	16,028	$	14,841	$	13,829
North America commissaries		6,027		6,205		6,776
International		2,188		2,935		3,903
All others		3,830		4,829		6,156
Unallocated corporate expenses		12,914		11,497		9,301
Total depreciation and amortization	$	40,987	$	40,307	$	39,965
Income (loss) before income taxes:
Domestic Company-owned restaurants (1)	$	75,136	$	56,452	$	40,969
North America commissaries		46,325		44,721		39,317
North America franchising		91,669		83,315		77,009
International (2)		11,408		10,891		7,250
All others		1,467		845		(9)
Unallocated corporate expenses (3)		(64,791)		(75,896)		(49,440)
Elimination of intersegment profit		(2,405)		(1,181)		(841)
Total income before income taxes	$	158,809	$	119,147	$	114,255

(1) Includes an $11.6 million refranchising gain in 2016. See Note 7 for additional information.

(2) Includes a $1.4 million impairment loss in 2016.  See Note 7 for additional information.

(3) Includes a ($900,000) million legal settlement in 2016 and a $12.3 million legal settlement in 2015. See Note 17 for additional information.

(In thousands)	2016		2015		2014
Property and equipment:
Domestic Company-owned restaurants	$	225,081	$	223,246	$	208,488
North America commissaries		128,469		110,344		107,992
International		15,673		14,826		25,443
All others		55,586		47,481		46,013
Unallocated corporate assets		192,548		179,665		169,105
Accumulated depreciation and amortization		(386,884)		(361,518)		(337,584)
Net property and equipment	$	230,473	$	214,044	$	219,457
Expenditures for property and equipment:
Domestic Company-owned restaurants	$	16,257	$	14,631	$	23,475
North America commissaries		14,164		3,924		5,756
International		4,390		4,540		1,708
All others		7,897		4,701		5,906
Unallocated corporate		12,846		11,176		11,810
Total expenditures for property and equipment	$	55,554	$	38,972	$	48,655