Income Taxes (Tables)

12 Months Ended

Jan. 02, 2021

Income Tax Disclosure [Abstract]

Income tax (benefit) provision

The income tax (benefit) provision for the fiscal years 2020, 2019 and 2018 consisted of the following:

	2020		2019		2018
Current:
Federal	$	(20)	$	102	$	32
State	3		17		12
Current income tax (benefit) provision	(17)		119		44
Deferred:
Federal	(39)		(6)		31
State	(12)		13		14
Deferred income tax (benefit) provision	(51)		7		45
Total income tax (benefit) provision	$	(68)	$	126	$	89

Reconciliation of (benefit) provision for income taxes

The reconciliation of the provision (benefit) for income taxes at the U.S. federal statutory income tax rate of 21% to the Company’s income tax provision (benefit) for the fiscal years 2020, 2019 and 2018 is shown below: 

	2020		2019		2018
Federal income taxes computed at statutory rate	$	(62)	$	107	$	104
State income taxes, net of federal income tax benefit	(10)		24		20
Stock-based compensation	1		(4)		(6)
Non-deductible expenses	7		4		3
Change in the valuation allowance for deferred tax assets	(1)		6		1
Net operating loss expirations	3		—		3
Tax credits	(3)		(10)		(6)
Change in unrecognized tax benefits	(3)		(1)		(21)
Change in U.S. federal statutory tax rate	—		—		(8)
Other	—		—		(1)
Total income tax (benefit) provision	$	(68)	$	126	$	89

Significant deferred tax assets and liabilities

Temporary differences and carryforwards that created significant deferred tax assets and liabilities were as follows:

	January 2, 2021		December 28, 2019
Deferred tax assets:
Operating lease liabilities	$	71	$	38
Workers’ compensation, general and fleet liabilities	40		36
Financing lease and other long term liabilities	78		90
Net operating loss carryforwards	64		64
Other deferred tax assets	100		63
Total gross deferred tax assets	353		291
Less valuation allowance	(35)		(36)
Total net deferred tax assets	318		255
Deferred tax liabilities:
Property and equipment	(201)		(221)
Operating lease assets	(70)		(37)
Inventories	(21)		(35)
Intangibles	(274)		(259)
Other deferred tax liabilities	(21)		(11)
Total deferred tax liabilities	(587)		(563)
Net deferred tax liability	$	(269)	$	(308)

Net deferred tax liabilities in balance sheet

The net deferred tax liabilities presented in the Company's Consolidated Balance Sheets were as follows:

	January 2, 2021		December 28, 2019
Noncurrent deferred tax assets	$	1	$	—
Noncurrent deferred tax liability	(270)		(308)
Net deferred tax liability	$	(269)	$	(308)

Net operating loss carryforwards expiration periods

The Company had tax affected state net operating loss carryforwards of $64 million as of January 2, 2021. The Company’s net operating loss carryforwards expire as follows:

	State
2021-2025	$	33
2026-2030	17
2031-2035	7
2036-2040	5
Indefinite	2
	$	64

Summary of activity in valuation allowance

A summary of the activity in the valuation allowance for the fiscal years 2020, 2019 and 2018 is as follows:

	2020		2019		2018
Balance as of beginning of year	$	36	$	30	29
(Benefit) expense recognized	(1)		6		1
Balance as of end of year	$	35	$	36	$	30

Reconciliation of unrecognized tax benefits

Reconciliation of the beginning and ending amount of unrecognized tax benefits as of fiscal years 2020, 2019, and 2018 was as follows:

Balance as of December 30, 2017	$	108
Gross increases due to positions taken in prior years	2
Gross decreases due to positions taken in prior years	(64)
Decreases due to lapses of statute of limitations	(1)
Decreases due to changes in tax rates	(5)
Balance as of December 29, 2018	40
Decreases due to lapses of statute of limitations	(1)
Balance as of December 28, 2019	39
Gross increases due to positions taken in prior years	3
Decreases due to lapses of statute of limitations	(1)
Decreases due to changes in tax rates	(5)
Positions assumed in business acquisition	3
Balance as of January 2, 2021	$	39