Income Taxes (Tables)

12 Months Ended

Dec. 29, 2019

Dec. 30, 2018

Schedule of Income before Income Tax, Domestic and Foreign

For financial reporting purposes, income (loss) before income taxes includes the following components:



		Fiscal Year
		2019			2018			2017
	(in thousands)
United States		$	(43,346	)	$	(28,731	)	$	(25,667	)
Foreign (including U.S. Possessions)		4,059			3,249			4,442
Income (loss) before income taxes		$	(39,287	)	$	(25,482	)	$	(21,225	)

Schedule of Components of Income Tax Expense (Benefit)

Our income tax expense (benefit) consists of the following for the periods presented:



		Fiscal Year
		2019			2018			2017
	(in thousands)
Current tax expense (benefit):
Federal		$	3,075		$	1,276		$	(2,668	)
State		312			1,090			(708		)
Foreign		759			795			960
		4,146			3,161			(2,416		)
Deferred tax expense (benefit):
Federal		(12,150		)	(8,382		)	(72,829		)
State		(2,360		)	24			(137		)
Foreign		—			176			1,091
		(14,510		)	(8,182		)	(71,875		)
Income tax expense (benefit)		$	(10,364	)	$	(5,021	)	$	(74,291	)

Schedule of Effective Income Tax Rate Reconciliation

A reconciliation of the federal statutory income tax rate to our effective tax rate is as follows:



	Fiscal Year
	2019		2018		2017
Federal statutory rate	(21.0	)%	(21.0	)%	(35.0	)%
State income taxes, net of federal benefit	(4.5	)%	2.0	%	(4.5	)%
Federal employment related income tax credits, net	(1.4	)%	(2.9	)%	(1.2	)%
Merger and litigation related costs	(0.1	)%	0.4	%	1.6	%
Canadian tax rate difference	—	%	—	%	0.4	%
Canadian nondeductible interest	—	%	—	%	0.7	%
Canadian deferred tax valuation adjustment	—	%	0.7	%	5.7	%
Canadian tax reorganization	—	%	0.8	%	(7.6	)%
State tax credit, valuation adjustment	0.3	%	1.3	%	2.0	%
Foreign taxes withheld	(0.2	)%	1.4	%	—	%
Other	0.5	%	0.4	%	1.9	%
Effective tax rate (before impact of Tax Cuts and Jobs Act of 2017 ⁽¹⁾	(26.4	)%	(16.9	)%	(36.0	)%
Adjustment related to the Tax Cuts and Jobs Act of 2017 ⁽¹⁾	—	%	(2.8	)%	(314.0	)%
Adjusted effective tax rate	(26.4	)%	(19.7	)%	(350.0	)%

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(1) The Tax Cuts and Jobs Act of 2017 (enacted on December 22, 2017) resulted in a $66.6 million decrease of our net deferred tax liability and a corresponding benefit to our deferred federal income taxes for Fiscal 2017.

Schedule of Deferred Tax Assets and Liabilities

Deferred income tax assets and liabilities consisted of the following at the dates presented:



	December 29, 2019			December 30, 2018
	(in thousands)
Deferred tax assets:
Accrued compensation	$	2,213		$	1,523
Unearned revenue	3,305			2,360
Deferred rent	—			8,272
Operating lease obligations ⁽¹⁾	149,782			—
Stock-based compensation	912			730
Accrued insurance and employee benefit plans	3,284			3,328
Unrecognized tax benefits ⁽²⁾	318			377
NOL and other carryforwards	5,629			5,746
Interest deduction carryforward	8,930			—
Loan costs	—			394
Other	800			722
Gross deferred tax assets	175,173			23,452
Less: Valuation allowance ⁽³⁾	2,865			2,896
Net deferred tax asset	172,308			20,556
Deferred tax liabilities:
Depreciation and amortization ⁽⁴⁾	(3,465		)	(5,774		)
Prepaid assets	(424		)	(621		)
Intangibles	(120,534		)	(117,025		)
Operating lease right-of-use assets ⁽¹⁾	(137,048		)	—
Favorable/unfavorable Leases	—			(172		)
Internal use software and other	(3,216		)	(4,022		)
Deferred loan costs	(61		)	—
Gross deferred tax liabilities	(264,748		)	(127,614		)
Net deferred tax liability	$	(92,440	)	$	(107,058	)

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(1)	Cumulative deferred tax assets and liabilities relating to deferred rent, favorable/unfavorable leases, landlord incentives, and cease-use obligations were reclassed to Operating Lease Right-of-Use-Asset/Liability upon the adoption of ASU 2016-02, Leases (Topic 842), at the beginning of Fiscal 2019.


(2)	Amount represents the value of future tax benefits that would result if the liabilities for uncertain state tax positions and accrued interest related to uncertain tax positions are settled.

Schedule of Unrecognized Tax Benefits Roll Forward

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:



	Fiscal Year
	2019			2018			2017
	(in thousands)
Balance at beginning of period	$	4,286		$	3,853		$	3,119
Additions for tax positions taken in the current year	100			114			1,677
Increases for tax positions taken in prior years	826			571			16
Decreases for tax positions taken in prior years	(42		)	(48		)	(390		)
Settlements with tax authorities	(131		)	(5		)	(32		)
Expiration of statute of limitations	(1,060		)	(199		)	(537		)
Balance at end of period	$	3,979		$	4,286		$	3,853