Wendy's 2014 Annual Report Download - page 99

THE WENDY’S COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
(In Thousands Except Per Share Amounts)
deferred tax rate of $70 in 2014 and (3) changes to the state deferred tax rate of $5,122 in 2013. These amounts are
included in the state income tax provision, the foreign provision and the non-deductible goodwill amounts presented
in the table above.
The Company participates in the Internal Revenue Service (the “IRS”) Compliance Assurance Process (“CAP”).
As part of CAP, tax years are examined on a contemporaneous basis so that all or most issues are resolved prior to the
filing of the tax return. As such, our tax returns for fiscal years 2009 through 2013 have been settled. Certain of the
Company’s state income tax returns from its 2001 fiscal year and forward remain subject to examination. We believe
that adequate provisions have been made for any liabilities, including interest and penalties that may result from the
completion of these examinations.
Uncertain Tax Positions
As of December 28, 2014, the Company had unrecognized tax benefits of $25,715, which, if resolved favorably
would reduce income tax expense by $18,762. A reconciliation of the beginning and ending amount of unrecognized
tax benefits follows:
Year End
2014 2013 2012
Beginning balance ................................................... $23,897 $28,848 $30,614
Additions:
Tax positions of prior years .................................... 2,678 3,579 3,410
Reductions:
Tax positions of prior years .................................... (582) (4,914) (2,964)
Settlements ................................................ — (2,416) (1,327)
Lapse of statute of limitations .................................. (278) (1,200) (885)
Ending balance ..................................................... $25,715 $23,897 $28,848
In January 2014, the Company adopted the FASB amendment requiring unrecognized tax benefits to be
presented as a reduction to deferred tax assets when a net operating loss carryforward, a similar tax loss or a tax credit
carryforward exists. The adoption of this amendment in the first quarter of 2014 resulted in a reduction of $6,214 in
the liability for unrecognized tax benefits and a corresponding increase to net non-current deferred income tax
liabilities. During 2014, the Company increased its unrecognized tax benefits by $2,627 for certain amended state
returns.
During 2015, we believe it is reasonably possible the Company will reduce unrecognized tax benefits by up to
$5,836, primarily as a result of the completion of certain state tax audits.
During 2014, 2013 and 2012, the Company recognized $315, $(835) and $(584) of expense (income) for
interest and $330, $672 and $204 of income resulting from the reversal of accrued penalties, respectively, related to
uncertain tax positions. The Company has approximately $2,949 and $2,634 accrued for interest and $657 and $987
accrued for penalties as of December 28, 2014 and December 29, 2013, respectively.
(13) Stockholders’ Equity
Dividends
During the years ended December 28, 2014, December 29, 2013 and December 30, 2012, The Wendy’s Company
paid dividends per share of $0.21, $0.18 and $0.10, respectively.
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