Panera Bread 2010 Annual Report Download - page 78

The tax effects of the significant temporary differences which comprise the deferred tax assets and liabilities
were as follows for the periods indicated (in thousands):
December 28,
2010
December 29,
2009
Deferred tax assets:
Accrued expenses ....................................... $59,952 $42,029
Stock-based compensation ................................ 2,405 2,531
Other................................................ 287 15
Total deferred tax assets .................................. $62,644 $44,575
Deferred tax liabilities:
Property and equipment .................................. $(51,437) $(39,433)
Goodwill and other intangibles ............................. (16,675) (15,270)
Total deferred tax liabilities ............................... $(68,112) $(54,703)
Net deferred tax liability ................................... $ (5,468) $(10,128)
Net deferred current tax asset ................................ $24,796 $18,685
Net deferred non-current tax liability .......................... $(30,264) $(28,813)
The following is a roll-forward of the Company’s total gross unrecognized tax benefit liabilities for the periods
indicated (in thousands):
December 28,
2010
December 29,
2009
December 30,
2008
Beginning Balance ............................ $3,357 $3,598 $2,299
Tax positions related to the current year:
Additions.................................. 477 617 281
Tax positions related to prior years:
Additions.................................. 724 — 4,963
Reductions ................................ (700) (110) (3,440)
Settlements .................................. (373) (645) (425)
Expirationofstatutesoflimitations ................ (589) (103) (80)
Ending Balance ............................... $2,896 $3,357 $3,598
As of December 28, 2010 and December 29, 2009, the amount of unrecognized tax benefits that, if recognized
in full, would be recorded as a reduction of income tax expense was $2.9 million and $3.4 million, net of federal tax
benefits, respectively. The Company believes that it is reasonably possible that a decrease of up to $1.0 million of
unrecognized tax benefits principally related to state tax filing positions and previously deducted expenses may
occur within twelve months of December 28, 2010 as a result of the expiration of statutes of limitations and the
finalization of audits related to prior tax years. In certain cases, the Company’s uncertain tax positions are related to
tax years that remain subject to examination by the relevant tax authorities. Tax returns in the Company’s major tax
filing jurisdictions for years after 2006, as well as certain returns in 2005 and 2006, are subject to future examination
by tax authorities. Estimated interest and penalties related to the underpayment of income taxes are classified as a
component of income tax expense in the Consolidated Statements of Operations and was $0.3 million during fiscal
2010, fiscal 2009, and fiscal 2008, respectively. Accrued interest and penalties were $1.3 million and $1.0 million as
of December 28, 2010 and December 29, 2009, respectively.
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PANERA BREAD COMPANY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)