Wendy's 2013 Annual Report Download - page 119

THE WENDY’S COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
(In Thousands Except Per Share Amounts)
respectively, (see Note 15 for additional information) and the pre-tax impact of impairment of goodwill during
the fourth quarter of 2013 was $9,397 (see Note 8 for additional information). The pre-tax impact of losses on
the early extinguishment of debt during the second and fourth quarters of 2013 was $21,019 and $7,544,
respectively (see Note 10 for additional information).
(b) The Company’s consolidated statements of operations were materially impacted by facilities action charges, net,
impairment of long-lived assets and losses on early extinguishment of debt. The pre-tax impact of facilities action
charges, net for the first, second, third and fourth quarters of 2012 was $6,143, $9,988, $11,430 and $13,470,
respectively (see Note 2 for additional information). The pre-tax impact of impairment of long-lived assets during
the first, second and fourth quarters of 2012 was $4,511, $3,270 and $13,316, respectively (see Note 15 for
additional information). The pre-tax impact of losses on the early extinguishment of debt during the second and
third quarters of 2012 was $25,195 and $49,881, respectively (see Note 10 for additional information).
Additionally, the Company’s consolidated statements of operations were materially affected during the first
quarter of 2012 by a $27,407 gain on the sale of our investment in Jurlique. As a result of the sale, we have
reflected net income attributable to noncontrolling interests of $2,384 (see Note 6 for additional information).
(c) Basic and diluted income (loss) per share are being presented together since diluted income (loss) per share was
the same as basic income (loss) per share for all periods presented (see Note 4 for additional information).
(d) (Loss) income from continuing operations was materially affected during the third and fourth quarters of 2012 by
corrections related to prior years’ tax matters which had an effect of increasing our benefit from income taxes by
$2,181 and $5,439, respectively. Income from discontinued operations was also affected during the third quarter
of 2012 by such corrections which had an effect of increasing our benefit from income taxes by $580. See
Notes 12, 17 and 26 for additional information.
(26) Corrections to Prior Years’ Income Taxes and Depreciation of Properties
Our consolidated financial statements for the year ended and as of December 30, 2012, include adjustments
which reflect corrections to prior years’ income taxes and depreciation of properties. A description of the nature of
those adjustments and a tabular presentation of their effect on the prior years’ consolidated financial statements
included herein is presented below.
Correction to Prior Years’Income Taxes
In connection with the transition of the Company’s Atlanta restaurant support center to Ohio during 2012 as
further described in Note 2, the Company reviewed its accounting for income taxes and determined that there were
certain errors which were corrected in the consolidated financial statements for the year ended and as of December 30,
2012.
State Bonus Depreciation
The Company’s review determined that, as a result of certain states not following the federal tax deduction for
bonus depreciation, the Company’s cumulative deferred tax liability was overstated by $3,300. As a result, an increase
to deferred tax benefit and a decrease in deferred tax liabilities was recorded in 2012.
2011 Income Tax Provision - Hiring Incentives to Restore Employment Credit Omission
The Company’s review also determined that the Hiring Incentives to Restore Employment (HIRE) credit had
been omitted from the fiscal year 2011 year-end provision. A tax benefit of approximately $2,800 (of which $580
related to Arby’s which was sold by Wendy’s Restaurants in July 2011 and has been included in discontinued
operations) was recorded in 2012 in order to correct for this error.
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