Schedule II - Valuation and Qualifying Accounts

12 Months Ended

Jan. 03, 2017

Valuation and Qualifying Accounts [Abstract]

Schedule II - Valuation and Qualifying Accounts

Del Taco Restaurants, Inc.

Schedule II - Valuation and Qualifying Accounts

Valuation Allowance for Deferred Tax Assets

(in thousands)

				Additions
Description	Balance at beginning of period			Charged to costs and expenses		Charge to other accounts		Deductions			Balance at end of period
Fifty-Three Weeks Ended January 3, 2017 (Successor)	$	—		$	—	$	—	$	—		$	—
Twenty-Six Weeks Ended December 29, 2015 (Successor)	1,926		(A)	—		—		(1,926		)	—
Twenty-Six Weeks Ended June 30, 2015 (Predecessor)	20,217			—		—		(2,819		)	$	17,398	(B)
Fifty-Two Weeks Ended December 30, 2014 (Predecessor)	17,077			3,098		42		—			$	20,217

^(A) Del Taco Restaurants, Inc. had a full valuation allowance on its deferred taxes assets of $1.9 million as of June 30, 2015 which was not presented with Del Taco Holdings, Inc.'s (DTH) predecessor financial results.

^(B) As part of purchase accounting, Del Taco Restaurants, Inc. (the "Company") was required to record all of DTH's acquired assets and liabilities at their acquisition date fair value, including deferred income taxes. The Company considered the weight of both positive and negative evidence and concluded that it is more likely than not that DTH's deferred tax assets will be realized and that no valuation allowance on DTH's deferred tax asset was required as of the date of acquisition. As a result, the Company established deferred tax assets as well as deferred tax liabilities related to indefinite-lived intangibles through the purchase price allocation and the $17.4 million valuation allowance as of June 30, 2015 (Predecessor) was not established through purchase accounting.