Segment Reporting

9 Months Ended

Jul. 06, 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
	July 6, 2014			July 6, 2014			July 7, 2013			July 6, 2014			July 6, 2014			July 7, 2013
	(New)			(Old)						(New)			(Old)
Revenues by segment:
Jack in the Box restaurant operations	$	259,737		$	259,737		$	272,755		$	869,650		$	869,650		$	918,246
Qdoba restaurant operations	88,755			88,755			77,574			269,794			269,794			233,640
Consolidated revenues	$	348,492		$	348,492		$	350,329		$	1,139,444		$	1,139,444		$	1,151,886
Earnings from operations by segment:
Jack in the Box restaurant operations	$	54,413		$	33,692		$	23,485		$	184,333		$	108,607		$	83,002
Qdoba restaurant operations	9,641			9,326			7,410			26,354			24,567			18,602
FFE operations (1)	—			(18		)	(11		)	—			(91		)	(98		)
Shared services and unallocated costs	(21,078		)	—			—			(79,846		)	—			—
Gains on the sale of company-operated restaurants	24			—			—			2,242			—			—
Consolidated earnings from operations	43,000			43,000			30,884			133,083			133,083			101,506
Interest expense, net	3,535			3,535			3,270			12,388			12,388			12,061
Consolidated earnings from continuing operations and before income taxes	$	39,465		$	39,465		$	27,614		$	120,695		$	120,695		$	89,445
Total depreciation expense by segment:
Jack in the Box restaurant operations	$	15,110		$	16,798		$	17,350		$	51,379		$	56,991		$	58,783
Qdoba restaurant operations	3,893			3,893			3,741			13,029			13,029			12,054
Shared services and unallocated costs	1,688			—			—			5,612			—			—
Consolidated depreciation expense	$	20,691		$	20,691		$	21,091		$	70,020		$	70,020		$	70,837

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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	—		(134		)	(134		)
Balance at July 6, 2014	$	100,597	$	48,513		$	149,110

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