v3.24.0.1
Segment Information
 12 Months Ended
Dec. 31, 2023
Segment Reporting [Abstract]  
Segment Information
(11)
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. Over 90% of the Company's supply chain revenues are attributable to the U.S. 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 revenues and earnings before interest, taxes, depreciation, amortization and other, which is the measure by which the Company allocates resources to its segments and which the Company refers to as Segment Income.

 

The tables below summarize the financial information concerning the Company’s reportable segments for fiscal 2023, 2022 and 2021. 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 below primarily includes corporate administrative costs that are not allocable to a reportable segment, including labor, computer expenses, professional fees, travel and entertainment, rent, insurance and other corporate administrative costs.

 

 

 

U.S.
Stores

 

 

Supply
Chain

 

 

International
Franchise

 

 

Intersegment
Revenues

 

 

Other

 

 

Total

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2023

 

$

1,454,272

 

 

$

2,829,224

 

 

$

310,077

 

 

$

(114,215

)

 

$

—

 

 

$

4,479,358

 

2022

 

 

1,487,409

 

 

 

2,898,069

 

 

 

295,007

 

 

 

(143,327

)

 

 

—

 

 

 

4,537,158

 

2021

 

 

1,498,360

 

 

 

2,699,863

 

 

 

298,036

 

 

 

(138,886

)

 

 

—

 

 

 

4,357,373

 

Segment Income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2023

 

$

520,977

 

 

$

245,430

 

 

$

259,608

 

 

N/A

 

 

$

(86,894

)

 

$

939,121

 

2022

 

 

438,604

 

 

 

208,799

 

 

 

236,144

 

 

N/A

 

 

 

(26,022

)

 

 

857,525

 

2021

 

 

454,875

 

 

 

229,877

 

 

 

241,873

 

 

N/A

 

 

 

(42,926

)

 

 

883,699

 

Capital Expenditures

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2023

 

$

11,942

 

 

$

34,044

 

 

$

93

 

 

N/A

 

 

$

59,196

 

 

$

105,275

 

2022

 

 

9,830

 

 

 

34,625

 

 

 

—

 

 

N/A

 

 

 

44,384

 

 

 

88,839

 

2021

 

 

13,680

 

 

 

37,063

 

 

 

—

 

 

N/A

 

 

 

44,894

 

 

 

95,637

 

In the first quarter of 2023, the Company changed its allocation methodology for certain costs which support certain internally developed software used across the Company's franchise system. This allocation methodology change was implemented in order to reflect the way the chief operating decision maker allocates resources to the Company’s reportable segments and evaluates segment profitability, including the costs of internally developed software. The change in allocation methodology of certain software development costs resulted in an estimated increase in U.S. stores Segment Income of $65.7 million, an estimated increase in international franchise Segment Income of $8.9 million and an estimated decrease in other Segment Income of $74.6 million in 2023. The change in allocation methodology of certain software development costs had no impact on revenues, supply chain Segment Income or total Segment Income. The change in allocation methodology for certain software development costs is a prospective change and the comparative information has not been restated.

 

The following table reconciles total Segment Income to income before provision for income taxes:

 

 

 

2023

 

 

2022

 

 

2021

 

Total Segment Income

 

$

939,121

 

 

$

857,525

 

 

$

883,699

 

Depreciation and amortization

 

 

(80,640

)

 

 

(80,251

)

 

 

(72,923

)

Refranchising (loss) gain

 

 

(149

)

 

 

21,173

 

 

 

—

 

Loss on sale/disposal of assets

 

 

(1,299

)

 

 

(1,813

)

 

 

(1,189

)

Non-cash equity-based compensation expense

 

 

(37,514

)

 

 

(28,709

)

 

 

(28,670

)

Recapitalization-related expenses

 

 

—

 

 

 

—

 

 

 

(509

)

Income from operations

 

 

819,519

 

 

 

767,925

 

 

 

780,408

 

Other income

 

 

17,713

 

 

 

—

 

 

 

36,758

 

Interest income

 

 

11,683

 

 

 

3,162

 

 

 

345

 

Interest expense

 

 

(196,475

)

 

 

(198,254

)

 

 

(191,806

)

Income before provision for income taxes

 

$

652,440

 

 

$

572,833

 

 

$

625,705

 

 

The following table summarizes the Company’s identifiable asset information by reportable segment as of December 31, 2023 and January 1, 2023:

 

 

 

December 31,
2023

 

 

January 1,
2023

 

U.S. stores

 

$

232,336

 

 

$

288,149

 

Supply chain

 

 

631,908

 

 

 

614,168

 

International franchise

 

 

37,981

 

 

 

36,874

 

Unallocated

 

 

772,674

 

 

 

663,030

 

Total assets

 

$

1,674,899

 

 

$

1,602,221

 

 

Unallocated assets primarily include cash and cash equivalents, restricted cash and cash equivalents, certain accounts receivable and prepaid expenses, investments in equity securities without readily determinable fair values and marketable securities, certain long-lived assets including certain property, plant and equipment, capitalized software and the operating lease right-of-use asset for the Company’s corporate headquarters and deferred income taxes. Over 95% of the Company's long-lived assets including property, plant and equipment, capitalized software and operating lease right-of-use assets are located in the U.S.

 

The following table summarizes the Company’s goodwill balance by reportable segment as of December 31, 2023 and January 1, 2023:

 

 

 

December 31,
2023

 

 

January 1,
2023

 

U.S. stores

 

$

10,621

 

 

$

10,696

 

Supply chain

 

 

1,067

 

 

 

1,067

 

Consolidated goodwill

 

$

11,688

 

 

$

11,763