Income Taxes (Tables)

12 Months Ended

Jan. 01, 2022

Income Tax Disclosure [Abstract]

Income tax (benefit) provision

The income tax provision (benefit) for the fiscal years 2021, 2020 and 2019 consisted of the following:

	2021		2020		2019
Current:
Federal	$	11	$	(20)	$	102
State	1		3		17
Current income tax provision (benefit)	12		(17)		119
Deferred:
Federal	31		(39)		(6)
State	7		(12)		13
Deferred income tax provision (benefit)	38		(51)		7
Total income tax provision (benefit)	$	50	$	(68)	$	126

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 2021, 2020 and 2019 is shown below: 

	2021		2020		2019
Federal income taxes computed at statutory rate	$	45	$	(62)	$	107
State income taxes, net of federal income tax benefit	10		(10)		24
Share-based compensation	(5)		1		(4)
Non-deductible expenses	5		7		4
Change in the valuation allowance for deferred tax assets	(7)		(1)		6
Net operating loss expirations	5		3		—
Tax credits	(1)		(3)		(10)
Change in unrecognized tax benefits	(2)		(3)		(1)
Total income tax provision (benefit)	$	50	$	(68)	$	126

Significant deferred tax assets and liabilities

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

	January 1, 2022		January 2, 2021
Deferred tax assets:
Operating lease liabilities	$	70	$	71
Workers’ compensation, general and fleet liabilities	45		40
Financing lease and other long term liabilities	71		78
Net operating loss carryforwards	68		64
Other deferred tax assets	97		100
Total gross deferred tax assets	351		353
Less valuation allowance	(28)		(35)
Total net deferred tax assets	323		318
Deferred tax liabilities:
Property and equipment	(195)		(201)
Operating lease assets	(68)		(70)
Inventories	(40)		(21)
Intangibles	(290)		(274)
Other deferred tax liabilities	(29)		(21)
Total deferred tax liabilities	(622)		(587)
Net deferred tax liability	$	(299)	$	(269)

Net deferred tax liabilities in balance sheet

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

	January 1, 2022		January 2, 2021
Noncurrent deferred tax assets	$	8	$	1
Noncurrent deferred tax liability	(307)		(270)
Net deferred tax liability	$	(299)	$	(269)

Net operating loss carryforwards expiration periods

The Company had tax affected state net operating loss carryforwards of $68 million as of January 1, 2022. The Company’s net operating loss carryforwards expire as follows:

	State
2022-2026	$	32
2027-2031	10
2032-2036	9
2037-2041	14
Indefinite	3
	$	68

Summary of activity in valuation allowance

A summary of the activity in the valuation allowance for the fiscal years 2021, 2020 and 2019 is as follows:

	2021		2020		2019
Balance as of beginning of year	$	35	$	36	30
(Benefit) expense recognized	(7)		(1)		6
Balance as of end of year	$	28	$	35	$	36

Reconciliation of unrecognized tax benefits

Reconciliation of the beginning and ending amount of unrecognized tax benefits as of fiscal years 2021, 2020, and 2019 was as follows:

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
Gross increases due to positions taken in prior years	5
Gross decreases due to positions taken in prior years	(2)
Decreases due to lapses of statute of limitations	(5)
Decreases due to settlements with taxing authorities	(5)
Balance at January 1, 2022	$	32