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Segment Information | 12 Months Ended
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Dec. 29, 2019
Segment Reporting [Abstract] |
Segment Information |
(12) | Segment Information
The Company has three reportable segments: (i) U.S. Stores; (ii) Supply Chain; and (iii) International Franchise. The Company’s operations are organized by management on the combined basis of line of business and geography. The U.S. Stores segment includes operations with respect to all franchised and Company-owned stores throughout the U.S. The Supply Chain segment primarily includes the distribution of food, equipment and supplies to stores from the Company’s supply chain center operations in the U.S. and Canada. The International Franchise segment primarily includes operations related to the Company’s franchising business in foreign markets. The accounting policies of the reportable segments are the same as those described in Note 1. The Company evaluates the performance of its segments and allocates resources to them based on earnings before interest, taxes, depreciation, amortization and other, referred to as Segment Income. The tables below summarize the financial information concerning the Company’s reportable segments for fiscal 2019, 2018 and 2017. Intersegment Revenues are comprised of sales of food, equipment and supplies from the Supply Chain segment to the Company-owned stores in the U.S. Stores segment. Intersegment sales prices are market based. The “Other” column as it relates to Segment Income and income from operations information below primarily includes corporate administrative costs. The “Other” column as it relates to capital expenditures primarily includes capitalized software, certain equipment and leasehold improvements. Tabular amounts presented below are in thousands.
|  | U.S. Stores (1) |  |  | Supply Chain |  |  | International Franchise (2) |  |  | Intersegment Revenues |  |  | Other |  |  | Total |
Revenues- |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
2019 |  | $ | 1,272,863 |  |  | $ | 2,231,838 |  |  | $ | 240,975 |  |  | $ | (126,902 | ) |  |  | — |  |  | $ | 3,618,774 |
2018 |  |  | 1,264,823 |  |  |  | 2,087,408 |  |  |  | 224,747 |  |  |  | (144,111 | ) |  |  | — |  |  |  | 3,432,867 |
2017 |  |  | 842,233 |  |  |  | 1,874,943 |  |  |  | 206,708 |  |  |  | (135,905 | ) |  |  | — |  |  |  | 2,787,979 |
Segment Income- |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
2019 |  | $ | 361,673 |  |  | $ | 199,844 |  |  | $ | 187,318 |  |  |  | N/A |  |  | $ | (36,701 | ) |  | $ | 712,134 |
2018 |  |  | 335,989 |  |  |  | 176,714 |  |  |  | 174,700 |  |  |  | N/A |  |  |  | (43,462 | ) |  |  | 643,941 |
2017 |  |  | 306,406 |  |  |  | 163,077 |  |  |  | 161,263 |  |  |  | N/A |  |  |  | (46,958 | ) |  |  | 583,788 |
Income from Operations- |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
2019 |  | $ | 349,740 |  |  | $ | 181,964 |  |  | $ | 187,097 |  |  |  | N/A |  |  | $ | (89,394 | ) |  | $ | 629,407 |
2018 |  |  | 329,044 |  |  |  | 162,392 |  |  |  | 174,503 |  |  |  | N/A |  |  |  | (94,250 | ) |  |  | 571,689 |
2017 |  |  | 298,852 |  |  |  | 151,622 |  |  |  | 161,066 |  |  |  | N/A |  |  |  | (90,308 | ) |  |  | 521,232 |
Capital Expenditures- |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
2019 |  | $ | 11,793 |  |  | $ | 33,440 |  |  | $ | 131 |  |  |  | N/A |  |  | $ | 43,304 |  |  | $ | 88,668 |
2018 |  |  | 15,717 |  |  |  | 61,652 |  |  |  | 134 |  |  |  | N/A |  |  |  | 42,171 |  |  |  | 119,674 |
2017 |  |  | 20,579 |  |  |  | 34,123 |  |  |  | 28 |  |  |  | N/A |  |  |  | 35,527 |  |  |  | 90,257 |
(1) | The adoption of ASC 606 in 2018 resulted in the recognition of revenue related to U.S. franchise contributions to DNAF in 2019 and 2018. In prior years, under accounting standards in effect at that time, the Company had presented these contributions net with the related disbursements in its consolidated statement of income. Refer to Note 1 to the consolidated financial statements for additional information related to the adoption of this accounting standard.
(2) | In 2018, the Company began managing its franchised stores in Alaska and Hawaii as part of its U.S. Stores segment. Prior to 2018, royalty revenues from these franchised stores were included in the Company’s International Franchise segment in the table above. Consolidated results of the Company have not been impacted by this change and prior year amounts have not been reclassified to conform to the current year presentation due to immateriality.
The following table reconciles total Segment Income to income before provision for income taxes (in thousands):
|  | 2019 |  |  | 2018 |  |  | 2017 |
Total Segment Income |  | $ | 712,134 |  |  | $ | 643,941 |  |  | $ | 583,788 |
Depreciation and amortization |  |  | (59,930 | ) |  |  | (53,665 | ) |  |  | (44,369 | )
(Loss) gain on sale/disposal of assets |  |  | (2,023 | ) |  |  | 4,737 |  |  |  | 3,148 |
Non-cash compensation expense |  |  | (20,265 | ) |  |  | (22,792 | ) |  |  | (20,713 | )
Recapitalization-related expenses |  |  | (509 | ) |  |  | (532 | ) |  |  | (622 | )
Income from operations |  |  | 629,407 |  |  |  | 571,689 |  |  |  | 521,232 |
Interest income |  |  | 4,048 |  |  |  | 3,334 |  |  |  | 1,462 |
Interest expense |  |  | (150,818 | ) |  |  | (146,345 | ) |  |  | (122,541 | )
Income before provision for income taxes |  | $ | 482,637 |  |  | $ | 428,678 |  |  | $ | 400,153 |
The following table summarizes the Company’s identifiable asset information as of December 29, 2019 and December 30, 2018 (in thousands):
|  | 2019 (1) |  |  | 2018 |
U.S. Stores |  | $ | 251,844 |  |  | $ | 211,554 |
U.S. supply chain |  |  | 408,919 |  |  |  | 283,351 |
Total U.S. assets |  |  | 660,763 |  |  |  | 494,905 |
International franchise |  |  | 23,396 |  |  |  | 21,094 |
International supply chain |  |  | 35,745 |  |  |  | 24,049 |
Total international assets |  |  | 59,141 |  |  |  | 45,143 |
Unallocated |  |  | 662,188 |  |  |  | 367,337 |
Total assets |  | $ | 1,382,092 |  |  | $ | 907,385 |
(1) | The adoption of ASC 842 resulted in the recognition of operating lease right-of-use assets in 2019. Refer to Note 1 to the consolidated financial statements for additional information related to the adoption of this new accounting standard.
Unallocated assets primarily include cash and cash equivalents, restricted cash and cash equivalents, investments in marketable securities, certain long-lived assets including the operating lease right-of-use asset for the Company’s corporate headquarters and deferred income taxes. The following table summarizes the Company’s goodwill balance as of December 29, 2019 and December 30, 2018 (in thousands):
|  | 2019 |  |  | 2018 |
U.S. Stores |  | $ | 14,026 |  |  | $ | 13,852 |
Supply Chain |  |  | 1,067 |  |  |  | 1,067 |
Consolidated goodwill |  | $ | 15,093 |  |  | $ | 14,919 |

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI http://asc.fasb.org/topic&trid=2134510 + Details
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