Income Taxes (Tables)

12 Months Ended

Jan. 03, 2021

Income Tax Disclosure [Abstract]

Schedule of Income before Income Tax, Domestic and Foreign

Income before income taxes is set forth below:

	Year Ended
	2020		2019		2018
Domestic	$	149,046	$	160,474	$	560,776
Foreign (a)	3,749		11,007		14,140
	$	152,795	$	171,481	$	574,916

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(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
	2020		2019		2018
Current:
U.S. federal	$	(16,176)	$	(18,421)	$	(109,078)
State	(3,723)		(6,093)		(2,661)
Foreign	(4,798)		(9,190)		(9,630)
Current tax provision	(24,697)		(33,704)		(121,369)
Deferred:
U.S. federal	(6,707)		1,585		5,071
State	(3,185)		(2,449)		441
Foreign	(374)		27		1,056
Deferred tax (provision) benefit	(10,266)		(837)		6,568
Income tax provision	$	(34,963)	$	(34,541)	$	(114,801)

Schedule of Deferred Tax Assets and Liabilities

Deferred tax assets (liabilities) are set forth below:

	Year End
	January 3, 2021		December 29, 2019
Deferred tax assets:
Operating and finance lease liabilities	$	365,005	$	345,173
Net operating loss and credit carryforwards	62,210		59,597
Unfavorable leases	23,511		26,020
Deferred revenue	24,303		23,907
Accrued compensation and related benefits	16,443		18,477
Accrued expenses and reserves	7,673		13,786
Deferred rent	—		492
Other	5,869		3,757
Valuation allowances	(49,968)		(45,183)
Total deferred tax assets	455,046		446,026
Deferred tax liabilities:
Operating and finance lease assets	(332,515)		(313,803)
Intangible assets	(301,969)		(311,596)
Fixed assets	(63,826)		(60,788)
Other	(37,491)		(30,598)
Total deferred tax liabilities	(735,801)		(716,785)
	$	(280,755)	$	(270,759)

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	$	13,681	2022-2030
State tax credits	708		2021-2023
Foreign tax credits of non-U.S. subsidiaries	4,125		Not applicable
Total	$	18,514
Net operating loss carryforwards:
State and local net operating loss carryforwards	$	1,182,774	2021-2035
Foreign net operating loss carryforwards	1,044		Not applicable
Total	$	1,183,818

Schedule of Effective Income Tax Rate Reconciliation

The reconciliation of income tax computed at the U.S. federal statutory rate of 21% to reported income tax is set forth below:

	Year Ended
	2020		2019		2018 (a)
Income tax provision at the U.S. federal statutory rate	$	(32,087)	$	(36,011)	$	(120,732)
State income tax provision, net of U.S. federal income tax effect	(4,664)		(6,470)		(221)
Prior years’ tax matters (b)	1,761		6,135		(9,970)
Excess federal tax benefits from share-based compensation	5,338		5,841		10,250
Foreign and U.S. tax effects of foreign operations	(397)		250		(856)
Valuation allowances	(4,593)		(2,833)		5,120
Non-deductible goodwill (c)	—		—		(41)
Tax credits	1,901		879		1,089
Non-deductible executive compensation	(1,973)		(1,925)		(1,098)
Unrepatriated earnings	(283)		(402)		(326)
Non-deductible expenses and other	34		(5)		1,984
	$	(34,963)	$	(34,541)	$	(114,801)

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(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.

(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.”

(c)Substantially all of the goodwill included in the net gain (loss) on sales of restaurants in 2018 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 January 3, 2021, the Company had unrecognized tax benefits of $20,973, which, if resolved favorably would reduce income tax expense by $16,601. A reconciliation of the beginning and ending amount of unrecognized tax benefits follows:

	Year End
	January 3, 2021		December 29, 2019		December 30, 2018
Beginning balance	$	22,323	$	27,632	$	28,848
Additions:
Tax positions of current year	322		1,356		3,874
Tax positions of prior years	—		—		2,598
Reductions:
Tax positions of prior years	(1,183)		(227)		(7,553)
Settlements	(119)		—		(21)
Lapse of statute of limitations	(370)		(6,438)		(114)
Ending balance	$	20,973	$	22,323	$	27,632