Wendy's 2008 Annual Report Download - page 138

(14) Income Taxes
Income Taxes
The (loss) income from continuing operations before income taxes and minority interests consisted of the
following components:
2008 2007 2006
Domestic . . .................................................. $(583,339) $9,450 $5,221
Foreign ...................................................... 2,427 (36) 111
$(580,912) $9,414 $5,332
The benefit from (provision for) income taxes from continuing operations consisted of the following
components:
2008 2007 2006
State ....................................................... $ (4,017) $ (2,036) $(4,246)
Foreign ..................................................... (1,965) (387) (380)
Current tax (provision) benefit ........................... (5,982) (2,423) (4,626)
U.S. Federal................................................. 90,465 9,036 (2,178)
State ....................................................... 14,608 1,741 2,192
Foreign ..................................................... 203 — —
Deferred tax benefit (provision)........................... 105,276 10,777 14
Income tax benefit (provision)............................ $ 99,294 $ 8,354 $(4,612)
The deferred income tax assets and the deferred income tax (liabilities) resulted from the following
components:
2008 2007
Year-End
Deferred tax assets:
Net operating/capital loss and tax credit carryforwards ............. $171,909 $ 68,296
Accrued compensation and related benefits ....................... 34,653 14,677
Unfavorable leases .............................................. 36,830 14,666
Other ......................................................... 77,612 33,374
Valuation allowances ........................................... (80,886) —
Total deferred tax assets ............................................. $240,118 $ 131,013
Deferred tax liabilities:
Intangible assets ............................................... (464,945) (18,970)
Owned and leased fixed assets and related obligations ............. (124,727) (31,009)
Gain on sale of propane business ................................ (34,692) (34,503)
Other ......................................................... (53,074) (17,560)
Total deferred tax liabilities ......................................... $(677,438) $(102,042)
$(437,320) $ 28,971
At December 28, 2008, the Company’s net deferred tax liabilities totaled $437,320. At December 30,
2007, the Company’s net deferred tax benefits totaled $28,971. The increase in net deferred tax liabilities is
principally the result of deferred tax liabilities of the Wendy’s merger which related to differences between the
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Wendy’s/Arby’s Group, Inc. and Subsidiaries
(Formerly Triarc Companies, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
(In Thousands Except Per Share Amounts)