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Segment Information (Notes)
 12 Months Ended
Dec. 29, 2019
Segment Reporting [Abstract]  
Segment Information Segment Information

As a result of the realignment of our management and operating structure during 2019 as discussed in Note 5, the Company adopted a new segment reporting structure beginning in the fourth quarter of 2019. As part of this new structure, the Company made the following changes: (1) it combined its Canadian business with its International segment and (2) it separated its real estate and development operations into its own segment. These changes were designed to increase efficiencies and to accelerate long-term growth. Prior period segment results have been revised to reflect these changes.

The Company is now comprised of the following segments: (1) Wendy’s U.S., (2) Wendy’s International and (3) Global Real Estate & Development. Wendy’s U.S. includes the operation and franchising of Wendy’s restaurants in the U.S. and derives its revenues from sales at Company-operated restaurants and royalties, fees and advertising fund collections from franchised restaurants. Wendy’s International includes the franchising of Wendy’s restaurants in countries and territories other than the U.S. and derives its revenues from royalties, fees and advertising fund collections from franchised restaurants. Global Real Estate & Development includes real estate activity for owned sites and sites leased from third parties, which are leased and/or subleased to franchisees, and also includes our share of the income of our TimWen real estate joint venture. In addition, Global Real Estate & Development earns fees from facilitating Franchise Flips and providing other development-related services to franchisees. The Company measures segment profit based on segment adjusted earnings before interest, taxes, depreciation and amortization (“EBITDA”). Segment adjusted EBITDA excludes certain unallocated general and administrative expenses and other items that vary from period to period without correlation to the Company’s core operating performance. When the Company’s chief operating decision maker reviews balance sheet information, it is at a consolidated level. The accounting policies of the Company’s segments are the same as those described in Note 1.

Revenues by segment were as follows:
 
Year Ended
 
2019
 
2018
 
2017
Wendy’s U.S.
$
1,404,307

 
$
1,312,491

 
$
986,738

Wendy’s International
68,198

 
67,630

 
43,696

Global Real Estate & Development
236,497

 
209,815

 
192,974

Total revenues
$
1,709,002

 
$
1,589,936

 
$
1,223,408



The following table reconciles profit by segment to the Company’s consolidated income before income taxes:
 
Year Ended
 
2019
 
2018
 
2017
Wendy’s U.S.
$
369,193

 
$
355,455

 
$
369,432

Wendy’s International
20,246

 
25,597

 
23,833

Global Real Estate & Development
107,116

 
110,632

 
94,782

Total segment profit
$
496,555

 
$
491,684

 
$
488,047

Advertising funds surplus
1,337

 
4,153

 
—

Unallocated general and administrative (a)
(81,230
)
 
(104,208
)
 
(82,188
)
Depreciation and amortization
(131,693
)
 
(128,879
)
 
(125,687
)
System optimization gains (losses), net
1,283

 
463

 
(39,076
)
Reorganization and realignment costs
(16,965
)
 
(9,068
)
 
(22,574
)
Impairment of long-lived assets
(6,999
)
 
(4,697
)
 
(4,097
)
Unallocated other operating income, net
291

 
444

 
333

Interest expense, net
(115,971
)
 
(119,618
)
 
(118,059
)
Loss on early extinguishment of debt
(8,496
)
 
(11,475
)
 
—

Investment income, net
25,598

 
450,736

 
2,703

Other income, net
7,771

 
5,381

 
1,617

Income before income taxes
$
171,481

 
$
574,916

 
$
101,019

_______________

(a)
Includes corporate overhead costs, such as employee compensation and related benefits. 2018 also includes the impact of legal reserves for a settlement of the FI Case of $27,500.

Net income (loss) of our equity method investments for the Brazil JV and TimWen are included in segment profit for the Wendy’s International and Global Real Estate & Development segments, respectively. Net income (loss) of equity method investments by segment was as follows:
 
Year Ended
 
2019
 
2018
 
2017
Wendy’s International
$
(1,022
)
 
$
(1,344
)
 
$
(1,134
)
Global Real Estate & Development
9,695

 
9,420

 
8,707

Total net income of equity method investments
$
8,673

 
$
8,076

 
$
7,573