Segment Reporting

6 Months Ended

Apr. 13, 2014

Segment Reporting [Abstract]

Segment Reporting

SEGMENT REPORTING

Our principal business consists of developing, operating and franchising our Jack in the Box and Qdoba restaurant concepts, each of which we consider reportable operating segments. Since the beginning of 2012, we have been engaged in restructuring activities related to our internal organization and have now instituted a shared-services model (refer also to Note 7, Impairment, Disposition of Property and Equipment, Restaurant Closing Costs and Restructuring). As a result, in fiscal 2014, our chief operating decision makers, which consist of a collective group of executive leadership, revised the method by which they determine performance and strategy for our segments. This change was made to reflect a shared-services model whereby each brand’s results of operations are assessed separately and do not include costs related to certain corporate functions which support both brands. This segment reporting structure reflects the Company’s current management structure, internal reporting method and financial information used in deciding how to allocate Company resources. Based upon certain quantitative thresholds, each operating segment is considered a reportable segment. This change to our segment reporting did not change our reporting units for goodwill.

We measure and evaluate our segments based on segment revenues and earnings from operations. The reportable segments do not include an allocation of the costs related to shared service functions, such as accounting/finance, human resources, audit services, legal, tax and treasury; nor do they include unallocated costs such as pension expense and share-based compensation. These costs are reflected in the caption “Shared services and unallocated costs,” and therefore, the measure of segment profit or loss is before such items. As it was impractical to recast prior period information, 2014 segment information is reported under both the old basis and new basis of segmentation (in thousands):

	Quarter									Year-to-Date
	April 13, 2014			April 13, 2014			April 14, 2013			April 13, 2014			April 13, 2014			April 14, 2013
	(New)			(Old)						(New)			(Old)
Revenues by segment:
Jack in the Box restaurant operations segment	$	260,089		$	260,089		$	277,916		$	609,912		$	609,912		$	645,492
Qdoba restaurant operations segment	80,781			80,781			69,307			181,040			181,040			156,066
Consolidated revenues	$	340,870		$	340,870		$	347,223		$	790,952		$	790,952		$	801,558
Earnings from operations by segment:
Jack in the Box restaurant operations segment	$	53,617		$	26,665		$	22,300		$	129,920		$	74,916		$	59,517
Qdoba restaurant operations segment	7,105			6,246			5,184			16,713			15,240			11,192
FFE operations (1)	—			(32		)	(38		)	—			(73		)	(87		)
Shared services and unallocated costs	(29,600		)	—			—			(58,768		)	—			—
Gains on the sale of company-operated restaurants	1,757			—			—			2,218			—			—
Consolidated earnings from operations	32,879			32,879			27,446			90,083			90,083			70,622
Interest expense, net	4,311			4,311			3,426			8,853			8,853			8,791
Consolidated earnings from continuing operations and before income taxes	$	28,568		$	28,568		$	24,020		$	81,230		$	81,230		$	61,831
Total depreciation expense by segment:
Jack in the Box restaurant operations segment	$	15,418		$	17,203		$	17,750		$	36,269		$	40,193		$	41,433
Qdoba restaurant operations segment	3,906			3,906			3,624			9,136			9,136			8,313
Shared services and unallocated costs	1,785			—			—			3,924			—			—
Consolidated depreciation expense	$	21,109		$	21,109		$	21,374		$	49,329		$	49,329		$	49,746

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(1)    FFE operations are included in the Jack in the Box operations segment under the new basis of segmentation.

Income taxes and total assets are not reported for our segments, in accordance with our method of internal reporting.

The following table provides detail of the change in the balance of goodwill for each of our reportable segments (in thousands):

	Qdoba		Jack in the Box			Total
Balance at September 29, 2013	$	100,597	$	48,391		$	148,988
Additions	—		256			256
Disposals	—		(129		)	(129		)
Balance at April 13, 2014	$	100,597	$	48,518		$	149,115

Refer to Note 4, Summary of Refranchisings, Franchise Development and Acquisitions, for information regarding the transactions resulting in the changes in goodwill.