US Cellular 2015 Annual Report Download - page 85

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A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
2015 2014 2013
(Dollars in thousands)
Unrecognized tax benefits balance at beginning of year ........................ $ 37,816 $ 30,390 $ 28,420
Additions for tax positions of current year ................................ 7,382 7,610 6,388
Additions for tax positions of prior years ................................. 1,783 883 1,858
Reductions for tax positions of prior years ............................... (1,434) (399) (467)
Reductions for settlements of tax positions ............................... (1,225) (312) (1,337)
Reductions for lapses in statutes of limitations ............................. (5,448) (356) (4,472)
Unrecognized tax benefits balance at end of year ............................ $ 38,874 $ 37,816 $ 30,390
Unrecognized tax benefits are included in Accrued taxes and Other deferred liabilities and credits in the Consolidated
Balance Sheet. If these benefits were recognized, they would have reduced income tax expense in 2015, 2014 and 2013
by $25.6 million, $24.6 million and $19.8 million, respectively, net of the federal benefit from state income taxes.
As of December 31, 2015, it is reasonably possible that unrecognized tax benefits could decrease by approximately
$10 million in the next twelve months. The nature of the uncertainty relates primarily to state income tax positions and
their resolution or the expiration of statutes of limitation.
TDS recognizes accrued interest and penalties related to unrecognized tax benefits in Income tax expense (benefit). The
amounts charged to income tax expense related to interest and penalties resulted in an expense of $0.6 million,
$3.4 million and $0.7 million in 2015, 2014 and 2013, respectively. Net accrued interest and penalties were $16.8 million
and $16.2 million at December 31, 2015 and 2014, respectively.
TDS and its subsidiaries file federal and state income tax returns. With only limited exceptions, TDS is no longer subject
to federal income tax audits for the years prior to 2012. With only a few exceptions, TDS is no longer subject to state
income tax audits for years prior to 2011.
NOTE 5 EARNINGS PER SHARE
Basic earnings (loss) per share attributable to TDS shareholders is computed by dividing Net income (loss) available to
common shareholders of TDS by the weighted average number of common shares outstanding during the period.
Diluted earnings (loss) per share attributable to TDS shareholders is computed by dividing Net income (loss) available to
common shareholders of TDS by the weighted average number of common shares outstanding during the period
adjusted to include the effects of potentially dilutive securities. Potentially dilutive securities primarily include incremental
shares issuable upon exercise of outstanding stock options and the vesting of restricted stock units.
77
TELEPHONE AND DATA SYSTEMS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS