Wendy's 2012 Annual Report Download - page 45

Investment Income, Net
Change
2012 2011
Gain on sale of investments, net ........................................... $27.5 $ 0.1
Distributions, including dividends ......................................... 8.3 —
Gain on DFR Notes .................................................... — (4.9)
$35.8 $(4.8)
The increase in investment income in 2012 was primarily a result of recording a $27.4 million gain on the sale
of our investment in Jurlique, which included a loss of $2.9 million on the related settlement of the derivative
transaction discussed in Note 8 of the Financial Statements and Supplementary Data contained in Item 8 herein. In
addition, we received a $4.6 million dividend from our investment in Arby’s during 2012.
The decrease in investment income in 2011 primarily related to the recognition of income of $4.9 million on
the repayment and cancellation of the DFR Notes during 2010.
Benefit from (Provision for) Income Taxes
Change
2012 2011
Federal and state benefit on variance in (loss) income from continuing operations
before income taxes and noncontrolling interests ............................ $23.1 $ (4.9)
Foreign tax credit, net of tax on foreign earnings .............................. (0.8) (6.5)
Corrections related to prior years’ tax matters ................................ 7.6 —
Adjustments related to prior year tax matters ................................. (2.2) 0.9
Other .............................................................. (0.1) (0.5)
$27.6 $(11.0)
Our income taxes in 2012, 2011 and 2010 were impacted by variations in income from continuing operations
before income taxes and noncontrolling interests, adjusted for recurring items such as non-deductible expenses and
state income taxes, as well as non-recurring discrete items. Discrete items may occur in any given year but are not
consistent from year to year. Taxes changed as a result of the following discrete items: (1) certain corrections in 2012
related to tax matters in prior years for the effects of tax depreciation in states that do not follow federal law of
$3.3 million, the effects of a one-time federal employment tax credit of $2.2 million and a correction to certain
deferred tax assets and liabilities of $2.1 million, (2) adjustments related to prior year tax matters resulting from the
recurring process of comparing the tax returns as filed to related tax provisions as compared to the prior year and (3) a
2010 tax benefit of foreign tax credits, net of tax on foreign earnings which did not recur.
Net Income (Loss) from Discontinued Operations
Net income (loss) from discontinued operations includes income from discontinued operations of $2.0 million
and $0.8 million for the years ended December 30, 2012 and January 1, 2012, respectively, and a loss from
discontinued operations of $22.4 million for the year ended January 2, 2011, net of a benefit from (provision for)
income taxes of $1.0 million, $(0.9) million and $13.1 million, respectively. Net income (loss) from discontinued
operations for the years ended December 30, 2012 and January 1, 2012 also includes a loss on disposal of
$0.5 million and $8.8 million, respectively, net of a benefit from (provision for) income taxes of $0.3 million and
$(3.6) million, respectively.
Net Income Attributable to Noncontrolling Interests
Jurl, a 99.7% owned subsidiary, completed the sale of our investment in Jurlique in February 2012. We have
reflected net income attributable to noncontrolling interests of $2.4 million, net of an income tax benefit of $1.3 million,
for the year ended December 30, 2012 in connection with the equity and profit interests discussed below.
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