Wendy's 2009 Annual Report Download - page 116

Uncertain Tax Positions
A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
2009 2008 2007
Beginning balance............................................ $30,321 $12,266 $13,157
Additions:
Wendy’s unrecognized tax benefits at the Wendy’s Merger
date.................................................. — 16,816 —
Tax positions related to the current year . . . . . . . . . . . . . . . . . . . 6,627 996 387
Tax positions of prior years. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,857 4,362 108
Reductions:
Tax positions of prior years. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4,241) (2,982) (976)
Settlements ............................................. (1,407) (578) (72)
Lapse of statute of limitation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,139) (559) (338)
Ending balance .............................................. $31,018 $30,321 $12,226
Included in the balance of unrecognized tax benefits at January 3, 2010 and December 28, 2008
respectively, are $21,811 and $22,155 (net of U.S. Federal benefit on state issues) of tax benefits that, if
resolved favorably, would reduce the Company’s tax expense.
During 2010, the Company believes it is reasonably possible it will reduce unrecognized tax benefits by
up to $4,800, primarily as a result of the completion of certain state tax audits. Increases in unrecognized tax
benefits will result primarily from state tax positions expected to be taken on tax returns for 2010. We do not
expect any unrecognized tax benefits related to our U.S. Federal income tax for 2010.
The Company recognizes interest accrued related to unrecognized tax benefits in “Interest expense” and
penalties in “General and administrative expenses”. During 2009, 2008 and 2007, the Company recognized
$(414), $390 and $1,619 of interest (reductions) expense and $(888), $1,307 and $0 of penalty (reductions)
expense, respectively, related to uncertain tax positions. The Company has approximately $4,262 and $6,157
accrued for interest and $1,026 and $1,914 accrued for penalties as of January 3, 2010 and December 28,
2008, respectively.
(12) Stockholders’ Equity
Our common stock and common stock held in treasury activity for 2009, 2008 and 2007 is as follows:
Class B prior to
September 29, 2008
Common Stock subsequent to
September 29, 2008
Common
Stock
Common
Stock
Class
B
Common
Stock
Class
B
2009 2008 2007 2009 2008 2007
Common Stock Treasury Stock
Number of shares at beginning of year . . . . 470,424 64,025 63,656 1,220 667 174 805 486
Net effect of Class B conversion . . . . . . . . . . — 29,551 — — 2 (2) — —
Stock issuance related to Wendy’s Merger . — 376,776 — — — — — —
Common shares issued:
Upon exercises of stock options, net . . — — 177 (524) (5) — (37) (76)
Upon grant of restricted stock and
for director’s fees................. — 16 226 (52) (63) (213) (102) (483)
Repurchase of common stock for Treasury . — — — 16,911 — — — —
Other.................................. — 56 (34) (63) 619 41 1 247
Number of shares at end of year. . . . . . . . . . 470,424 470,424 64,025 17,492 1,220 — 667 174
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Wendy’s/Arby’s Group, Inc. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
(In Thousands Except Per Share Amounts)