El Pollo Loco 2016 Annual Report Download - page 77
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EL POLLO LOCO HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Thedeferredtaxamountsmentionedabovehavebeenclassifiedontheaccompanyingconsolidatedbalancesheetsasfollows(inthousands):
December 30,
2015
December 31,
2014
Current:
Assets(liabilities) $ 21,656 $ 19,490
Noncurrent:
Assets(liabilities) (1,849) 15,566
$ 19,807 $ 35,056
AsofDecember30,2015,theCompanyhasfederalandstateNOLcarryforwardsofapproximately$105.2millionand$93.6million,respectively,whichexpire
beginningin2028and2025,respectively.TheCompanyalsohasstateenterprisezonecreditsofapproximately$11.0million,whichexpirein2023,andfederal
andstatealternativeminimumtax("AMT")creditsofapproximately$0.4million,whichcarryforwardindefinitely.Infiscal2014,theCompanycompleteda
section382analysisanddeterminedthatalloftheCompany'sNOLcarryforwardsandothertaxattributesaresubjecttolimitationundersection382oftheInternal
RevenueCodeof1986(the“Code”)andsimilarstatelawprovisions.However,thatlimitationdidnotimpacttheCompany's2015or2015yeartaxliability.
TheCompanyhaselectedtoutilizethetax-law-orderingapproachwithrespecttoexcessshare-basedcompensationdeductions.Underthisapproach,the
utilizationofexcesstaxdeductionsassociatedwithshare-basedawardsisdictatedbyprovisionsinthetaxlawthatidentifythesequenceinwhichsuchbenefitsare
utilizedfortaxpurposes.Infiscal2015and2014,theCompanyrecognizedexcesstaxdeductionsofapproximately$15.0millionand$9.9million,respectively.
Theassociatedwindfalltaxbenefitsofapproximately$5.4millionand$4.0million,respectively,wererecordedinadditionalpaid-in-capital("APIC")pursuantto
thetax-law-orderingapproach.
RecentlyenactedtaxlawsmayalsoaffectthetaxprovisionontheCompany'sconsolidatedfinancialstatements.ThestateofCaliforniapassedanewlawwhich
mandatestheuseofasinglesalesfactorapportionmentformulafortaxyearbeginningonorafterJanuary1,2013.Asaresult,ourstatedeferredtaxassetswere
revaluedduringtheyearendedDecember25,2013inordertoaccountforthechangeintaxlaw.AsofDecember30,2015,therewasa$2.9millionvaluation
allowanceagainstthestatedeferredtaxasset.
AsofDecember30,2015,December31,2014,andDecember25,2013,theCompanyhadnoaccrualforunrecognizedtaxbenefits.Consequently,nointerestor
penaltieshavebeenaccruedbytheCompany.TheCompanybelievesthatnosignificantchangestotheamountofunrecognizedtaxbenefitswilloccurwithinthe
nexttwelvemonths.
TheCompanyissubjecttotaxationintheUnitedStatesandinvariousstatejurisdictions.TheCompanyisnolongersubjecttoU.S.examinationforyearsbefore
2012bythefederaltaxingauthority,andforyearsbefore2011bystatetaxingauthorities.
11. EMPLOYEE BENEFIT PLANS
TheCompanysponsorsadefinedcontributionemployeebenefitplanthatpermitsitsemployees,subjecttocertaineligibilityrequirements,tocontributeupto25%
oftheirqualifiedcompensationtotheplan.TheCompanymatches100%oftheemployees’contributionsofthefirst3%oftheemployees’annualqualified
compensation,and50%oftheemployees’contributionsofthenext2%oftheemployees’annualqualifiedcompensation.TheCompany’smatchingcontribution
immediatelyfullyvests.TheCompany’scontributionstotheplanfortheyearsendedDecember30,2015,December31,2014,andDecember25,2013were
$539,000,$503,000,and$447,000respectively.
12. STOCK-BASED COMPENSATION
AsofDecember30,2015,optionstopurchase2,151,214sharesofcommonstockoftheCompanywereoutstanding.IncludedintheDecember30,2015amount
are1,728,964optionsthatarefullyvested.TheremainingoptionsvestovertimeorupontheCompany’sattainingannualfinancialgoals.However,the
compensationcommitteeoftheboardofdirectors,asadministratoroftheCompany’s2014OmnibusEquityIncentivePlan,hasthepowertoacceleratethevesting
scheduleofstock-basedcompensation,and,generally,intheeventofanemployeeterminationinconnectionwithachangeincontroloftheCompany,any
unvestedportionofanawardundertheplanshallbecomefullyvested.Infiscal2013and2012,theCompanygranted535,238and2,126,677optionswithan
exercisepriceof$5.84,whichwasgreaterthanthefairvalueofthecommonstockonthedateofgrant(premiumoptions).AsofDecember30,2015,
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