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(14) Income Taxes Income Taxes (Tables) | 12 Months Ended
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Jan. 01, 2012
Income from continuing operations before income taxes |
|  | The Wendy’s Company
|  | 2011 |  | 2010 |  | 2009
Domestic |  | $ | 11,967 |  |  | $ | (2,244 | ) |  | $ | (30,492 | )
Foreign, principally Canada |  | 12,473 |  |  | 15,800 |  |  | 14,230 |
|  | $ | 24,440 |  |  | $ | 13,556 |  |  | $ | (16,262 | )
|  | Wendy’s Restaurants
|  | 2011 |  | 2010 |  | 2009
Domestic |  | $ | 25,119 |  |  | $ | 2,328 |  |  | $ | (8,772 | )
Foreign, principally Canada |  | 12,473 |  |  | 15,800 |  |  | 14,230 |
|  | $ | 37,592 |  |  | $ | 18,128 |  |  | $ | 5,458 |
Schedule of (provision for) benefit from income taxes from continuing operations |
|  | The Wendy’s Company
|  | 2011 |  | 2010 |  | 2009
Current: |  |  |  |  |  |
U.S. Federal |  | $ | — |  |  | $ | — |  |  | $ | — |
State |  | (675 | ) |  | (5,774 | ) |  | (12,687 | )
Foreign, principally Canada |  | (5,540 | ) |  | (7,076 | ) |  | (5,779 | )
Current tax provision |  | (6,215 | ) |  | (12,850 | ) |  | (18,466 | )
Deferred: |  |  |  |  |  |
U.S. Federal |  | 1,367 |  |  | 10,982 |  |  | 12,634 |
State |  | (2,788 | ) |  | 4,356 |  |  | 24,493 |
Foreign, principally Canada |  | 1,108 |  |  | 2,067 |  |  | 2,979 |
Deferred tax (provision) benefit |  | (313 | ) |  | 17,405 |  |  | 40,106 |
Income tax (provision) benefit |  | $ | (6,528 | ) |  | $ | 4,555 |  |  | $ | 21,640 |
|  | Wendy’s Restaurants
|  | 2011 |  | 2010 |  | 2009
Current: |  |  |  |  |  |
U.S. Federal |  | $ | — |  |  | $ | 3,382 |  |  | $ | (60,588 | )
State |  | (675 | ) |  | (8,014 | ) |  | (10,697 | )
Foreign, principally Canada |  | (5,540 | ) |  | (7,076 | ) |  | (5,779 | )
Current tax provision |  | (6,215 | ) |  | (11,708 | ) |  | (77,064 | )
Deferred: |  |  |  |  |  |
U.S. Federal |  | (2,610 | ) |  | 5,875 |  |  | 63,287 |
State |  | (8,905 | ) |  | 5,436 |  |  | 16,851 |
Foreign, principally Canada |  | 1,108 |  |  | 2,067 |  |  | 2,979 |
Deferred tax (provision) benefit |  | (10,407 | ) |  | 13,378 |  |  | 83,117 |
Income tax (provision) benefit |  | $ | (16,622 | ) |  | $ | 1,670 |  |  | $ | 6,053 |
Schedule of deferred tax assets and liabilities |
|  | The Wendy’s Company |  | Wendy’s Restaurants
|  | Year End |  | Year End
|  | 2011 |  | 2010 |  | 2011 |  | 2010
Deferred tax assets: |  |  |  |  |  |  |  |
Operating and capital loss carryforwards |  | $ | 98,173 |  |  | $ | 99,354 |  |  | $ | 97,152 |  |  | $ | 105,818 |
Tax credit carryforwards |  | 83,708 |  |  | 62,518 |  |  | 31,018 |  |  | 13,951 |
Accrued compensation and related benefits |  | 38,198 |  |  | 37,512 |  |  | 37,458 |  |  | 35,333 |
Unfavorable leases |  | 18,731 |  |  | 31,009 |  |  | 18,731 |  |  | 31,009 |
Other |  | 56,017 |  |  | 71,664 |  |  | 47,665 |  |  | 63,679 |
Valuation allowances |  | (17,397 | ) |  | (88,363 | ) |  | (21,059 | ) |  | (95,850 | )
Total deferred tax assets |  | 277,430 |  |  | 213,694 |  |  | 210,965 |  |  | 153,940 |
Deferred tax liabilities: |  |  |  |  |  |  |  |
Intangible assets |  | (502,570 | ) |  | (462,627 | ) |  | (502,570 | ) |  | (462,627 | )
Owned and leased fixed assets net of related obligations |  | (125,788 | ) |  | (100,198 | ) |  | (121,610 | ) |  | (95,588 | )
Other |  | (26,209 | ) |  | (28,773 | ) |  | (29,511 | ) |  | (29,130 | )
Total deferred tax liabilities |  | (654,567 | ) |  | (591,598 | ) |  | (653,691 | ) |  | (587,345 | )
|  | $ | (377,137 | ) |  | $ | (377,904 | ) |  | $ | (442,726 | ) |  | $ | (433,405 | )
Reconciliation of income tax computed at U.S. Federal statutory rate to reporting income tax |
|  | The Wendy’s Company
|  | 2011 |  | 2010 |  | 2009
Income tax (provision) benefit at the U.S. Federal statutory rate |  | $ | (8,554 | ) |  | $ | (4,745 | ) |  | $ | 5,692 |
State income tax (provision) benefit, net of U.S. Federal income tax effect |  | (2,251 | ) |  | (1,122 | ) |  | 2,177 |
Previously unrecognized state net operating losses, net of related valuation allowance (a) |  | — |  |  | — |  |  | 9,629 |
Foreign and U.S. tax effects of foreign operations (b) |  | 1,147 |  |  | 7,693 |  |  | (188 | )
Canadian tax rate changes |  | — |  |  | — |  |  | 2,000 |
Jobs tax credits, net |  | 1,914 |  |  | 2,044 |  |  | 2,591 |
Valuation allowance changes |  | — |  |  | — |  |  | 1,165 |
Non-deductible expenses |  | (622 | ) |  | (439 | ) |  | (1,006 | )
Adjustments related to prior year tax matters |  | 1,881 |  |  | 983 |  |  | (65 | )
Other, net |  | (43 | ) |  | 141 |  |  | (355 | )
|  | $ | (6,528 | ) |  | $ | 4,555 |  |  | $ | 21,640 |
_____________________
(a) | In connection with the fourth quarter 2009 dissolution of our captive insurance company, the likelihood of realization of certain previously unrecognized state net operating losses is no longer remote. Accordingly, an $18,152 deferred tax asset and related $8,523 partial valuation allowance was recognized.
(b) | Includes previously unrecognized benefit in 2010 of foreign tax credits, net of foreign income and withholding taxes on the repatriation of foreign earnings.
|  | Wendy’s Restaurants
|  | 2011 |  | 2010 |  | 2009
Income tax provision at the U.S. Federal statutory rate |  | $ | (13,157 | ) |  | $ | (6,345 | ) |  | $ | (1,910 | )
State income tax provision, net of U.S. Federal income tax effect |  | (6,227 | ) |  | (1,168 | ) |  | (3,474 | )
Previously unrecognized state net operating losses, net of related valuation allowance (a) |  | — |  |  | — |  |  | 9,629 |
Foreign and U.S. tax effects of foreign operations (b) |  | 1,147 |  |  | 7,693 |  |  | (188 | )
Canadian tax rate changes |  | — |  |  | — |  |  | 2,000 |
Jobs tax credits, net |  | 1,914 |  |  | 2,044 |  |  | 2,591 |
Valuation allowance changes |  | — |  |  | — |  |  | (516 | )
Non-deductible expenses |  | (58 | ) |  | (517 | ) |  | (444 | )
Adjustments related to prior year tax matters |  | (263 | ) |  | (178 | ) |  | (1,741 | )
Other, net |  | 22 |  |  | 141 |  |  | 106 |
|  | $ | (16,622 | ) |  | $ | 1,670 |  |  | $ | 6,053 |
_____________________
(a) | In connection with the fourth quarter 2009 dissolution of our captive insurance company, the likelihood of realization of certain previously unrecognized state net operating losses is no longer remote. Accordingly, an $18,152 deferred tax asset and related $8,523 partial valuation allowance was recognized.
(b) | Includes previously unrecognized benefit in 2010 of foreign tax credits, net of foreign income and withholding taxes on the repatriation of foreign earnings.
Reconciliation of beginning and ending amount of unrecognized tax benefits |
|  | The Wendy’s Company
|  | 2011 |  | 2010 |  | 2009
Beginning balance |  | $ | 36,434 |  |  | $ | 39,118 |  |  | $ | 38,421 |
Additions: |  |  |  |  |  |
Tax positions related to the current year |  | — |  |  | 19 |  |  | 6,627 |
Tax positions of prior years |  | 948 |  |  | 4,921 |  |  | 1,857 |
Reductions: |  |  |  |  |  |
Tax positions of prior years |  | (3,410 | ) |  | (4,419 | ) |  | (4,241 | )
Settlements |  | (1,922 | ) |  | (416 | ) |  | (1,407 | )
Lapse of statute of limitations |  | (1,436 | ) |  | (2,789 | ) |  | (2,139 | )
Ending balance |  | $ | 30,614 |  |  | $ | 36,434 |  |  | $ | 39,118 |
|  | Wendy’s Restaurants
|  | 2011 |  | 2010 |  | 2009
Beginning balance |  | $ | 26,249 |  |  | $ | 28,414 |  |  | $ | 31,717 |
Additions: |  |  |  |  |  |
Tax positions related to the current year |  | — |  |  | 19 |  |  | 613 |
Tax positions of prior years |  | 948 |  |  | 4,921 |  |  | 1,651 |
Reductions: |  |  |  |  |  |
Tax positions of prior years |  | (3,410 | ) |  | (3,900 | ) |  | (2,383 | )
Settlements |  | (1,922 | ) |  | (416 | ) |  | (1,045 | )
Lapse of statute of limitations |  | (1,436 | ) |  | (2,789 | ) |  | (2,139 | )
Ending balance |  | $ | 20,429 |  |  | $ | 26,249 |  |  | $ | 28,414 |

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- Definition Tabular disclosure of the components of income tax expense attributable to continuing operations for each year presented including, but not limited to: current tax expense (benefit), deferred tax expense (benefit), investment tax credits, government grants, the benefits of operating loss carryforwards, tax expense that results from allocating certain tax benefits either directly to contributed capital or to reduce goodwill or other noncurrent intangible assets of an acquired entity, adjustments of a deferred tax liability or asset for enacted changes in tax laws or rates or a change in the tax status of the entity, and adjustments of the beginning-of-the-year balances of a valuation allowance because of a change in circumstances that causes a change in judgment about the realizability of the related deferred tax asset in future years. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Topic 740 -SubTopic 10 -Publisher FASB -Number -Article -Subparagraph -Name Accounting Standards Codification -Paragraph 9 -Section 50 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32639-109319 + Details
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- Definition Tabular disclosure of the components of net deferred tax asset or liability recognized in an entity's statement of financial position, including the following: the total of all deferred tax liabilities, the total of all deferred tax assets, the total valuation allowance recognized for deferred tax assets. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Topic 740 -SubTopic 10 -Publisher FASB -Number -Article -Subparagraph -Name Accounting Standards Codification -Paragraph 2 -Section 50 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32537-109319 + Details
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- Definition Tabular disclosure of the reconciliation using percentage or dollar amounts of the reported amount of income tax expense attributable to continuing operations for the year to the amount of income tax expense that would result from applying domestic federal statutory tax rates to pretax income from continuing operations. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Topic 740 -SubTopic 10 -Publisher FASB -Number -Article -Subparagraph -Name Accounting Standards Codification -Paragraph 12 -Section 50 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32687-109319 + Details
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- Definition Tabular disclosure of income before income tax between domestic and foreign jurisdictions. + References No definition available. + Details
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- Definition Tabular disclosure of the change in unrecognized tax benefits. + References No definition available. + Details
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