(14) Income Taxes Income Taxes (Tables)

12 Months Ended

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