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Income Taxes (Tables)
 12 Months Ended
Dec. 29, 2019
Income Tax Disclosure [Abstract]  
Schedule of Income before Income Tax, Domestic and Foreign

Income before income taxes is set forth below:
 
Year Ended
 
2019
 
2018
 
2017
Domestic
$
160,474

 
$
560,776

 
$
86,892

Foreign (a)
11,007

 
14,140

 
14,127

 
$
171,481

 
$
574,916

 
$
101,019


_______________

(a)
Excludes foreign income of domestic subsidiaries.
Schedule of Components of Income Tax (Expense) Benefit
The (provision for) benefit from income taxes is set forth below:
 
Year Ended
 
2019
 
2018
 
2017
Current:
 
 
 
 
 
U.S. federal
$
(18,421
)
 
$
(109,078
)
 
$
(13,092
)
State
(6,093
)
 
(2,661
)
 
(4,055
)
Foreign
(9,190
)
 
(9,630
)
 
(9,173
)
Current tax provision
(33,704
)
 
(121,369
)
 
(26,320
)
Deferred:
 
 
 
 
 
U.S. federal
1,585

 
5,071

 
127,592

State
(2,449
)
 
441

 
(7,729
)
Foreign
27

 
1,056

 
(533
)
Deferred tax (provision) benefit
(837
)
 
6,568

 
119,330

Income tax (provision) benefit
$
(34,541
)
 
$
(114,801
)
 
$
93,010
Schedule of Deferred Tax Assets and Liabilities
Deferred tax assets (liabilities) are set forth below:
 
Year End
 
December 29, 2019
 
December 30, 2018
Deferred tax assets:
 
 
 
Operating and finance lease liabilities
$
345,173

 
115,322

Net operating loss and credit carryforwards
59,597

 
59,690

Unfavorable leases
26,020

 
35,801

Deferred revenue
23,907

 
23,904

Accrued compensation and related benefits
18,477

 
14,804

Accrued expenses and reserves
13,786

 
14,840

Deferred rent
492

 
16,807

Other
3,757

 
5,016

Valuation allowances
(45,183
)
 
(42,175
)
Total deferred tax assets
446,026

 
244,009

Deferred tax liabilities:
 
 
 
Operating and finance lease assets (a)
(313,803
)
 
(56,798
)
Intangible assets
(311,596
)
 
(324,394
)
Fixed assets (a)
(60,788
)
 
(105,545
)
Other
(30,598
)
 
(26,432
)
Total deferred tax liabilities
(716,785
)
 
(513,169
)
 
$
(270,759
)
 
$
(269,160
)

_______________

(a)
The Company’s adoption of the lease accounting standard in 2019 caused additional deferred taxes to be recorded as a result of the ROU assets and lease liabilities recorded on the consolidated balance sheet. Additionally, the deferred taxes existing at December 30, 2018 related to finance leases have been reclassified from fixed assets to finance lease liabilities and finance lease assets, consistent with the reclassifications made on the consolidated balance sheet upon adoption. See “New Accounting Standards Adopted” in Note 1 for further information regarding the adoption of the lease accounting standard.
Summary of Net Operating Loss and Tax Credit Carryforwards
The amounts and expiration dates of net operating loss and tax credit carryforwards are as follows:
 
Amount
 
Expiration
Tax credit carryforwards:
 
 
 
U.S. federal foreign tax credits
$
10,429

 
2022-2030
State tax credits
563

 
2020-2023
Foreign tax credits of non-U.S. subsidiaries
3,992

 
Not applicable
Total
$
14,984

 
 
 
 
 
 
Net operating loss carryforwards:
 
 
 
State and local net operating loss carryforwards
$
1,161,051

 
2020-2035
Foreign net operating loss carryforwards
225

 
2023-2027
Total
$
1,161,276

 
 
Schedule of Effective Income Tax Rate Reconciliation
The reconciliation of income tax computed at the U.S. federal statutory rate of 21% for 2019 and 2018 and 35% for 2017 to reported income tax is set forth below:
 
Year Ended
 
2019
 
2018 (a)
 
2017 (a)
Income tax provision at the U.S. federal statutory rate
$
(36,011
)
 
$
(120,732
)
 
$
(35,357
)
State income tax provision, net of U.S. federal income tax effect
(6,470
)
 
(221
)
 
(6,451
)
Federal rate change
—

 
—

 
164,893

Prior years’ tax matters (b)
6,135

 
(9,970
)
 
15,964

Excess federal tax benefits from share-based compensation
5,841

 
10,250

 
5,196

Domestic tax planning initiatives
—

 
—

 
4,282

Foreign and U.S. tax effects of foreign operations
250

 
(856
)
 
2,408

Valuation allowances
(2,833
)
 
5,120

 
(35,895
)
Non-deductible goodwill (c)
—

 
(41
)
 
(15,458
)
Transition tax
—

 
—

 
(4,446
)
Unrepatriated earnings
(402
)
 
(326
)
 
(1,801
)
Non-deductible expenses and other
(1,051
)
 
1,975

 
(325
)
 
$
(34,541
)
 
$
(114,801
)
 
$
93,010

_______________

(a)
2018 includes the following impacts associated with the Tax Act: (1) a net expense of $2,426 related to the impact of the corporate rate reduction on our net deferred tax liabilities, (2) a net expense of $991 related to the limitations on the deductibility of certain executive compensation, (3) a net expense of $28 of state income tax and (4) a net benefit of $1,286 related to foreign tax credits. 2017 includes the following impacts associated with the Tax Act: (1) the revaluation of our U.S. net deferred tax liability at 21%, resulting in a benefit of $164,893, (2) a full valuation allowance of $15,962 on our U.S. foreign tax credit carryforwards due to the decrease in the U.S. federal tax rate, (3) a one-time transition tax of $4,446, (4) deferred tax on unrepatriated earnings of $1,801 and (5) other net expenses of $2,305.

(b)
2019 primarily relates to a reduction in unrecognized tax benefits due to a lapse of statute of limitations. 2018 includes expense of $9,542 related to the Tax Act, which was partially offset by a $7,535 benefit reported in “Valuation allowances.”
2017 primarily relates to certain state net operating loss carryforwards, previously considered worthless, that existed at the beginning of the year. The Company changed its judgment during 2017 regarding the likelihood of the utilization of these carryforwards. Because of this change, the Company recognized a deferred tax asset of $16,643, net of federal benefit, which was partially offset by an expense reported in “Valuation allowances” of $13,667.

(c)
Substantially all of the goodwill included in the net gain (loss) on sales of restaurants in 2018 and 2017 under our system optimization initiative was non-deductible for tax purposes. See Note 3 for further information.
Schedule of Unrecognized Tax Benefits Roll Forward
As of December 29, 2019, the Company had unrecognized tax benefits of $22,323, which, if resolved favorably would reduce income tax expense by $17,987. A reconciliation of the beginning and ending amount of unrecognized tax benefits follows:
 
Year End
 
December 29,
2019
 
December 30,
2018
 
December 31,
2017
Beginning balance
$
27,632

 
$
28,848

 
$
19,545

Additions:
 
 
 
 
 
Tax positions of current year
1,356

 
3,874

 
8,251

Tax positions of prior years
—

 
2,598

 
1,704

Reductions:
 
 
 
 
 
Tax positions of prior years
(227
)
 
(7,553
)
 
(295
)
Settlements
—

 
(21
)
 
(34
)
Lapse of statute of limitations
(6,438
)
 
(114
)
 
(323
)
Ending balance
$
22,323

 
$
27,632

 
$
28,848