Income Taxes

The components of the provision for income taxes for income from operations for each of the fiscal years were as follows (in millions):



	Year Ended January 1, 2015		Year Ended December 26, 2013			Year Ended December 27, 2012
Federal:
Current	$	4.2	$	4.7		$	3.8
Deferred	1.2		(0.2		)	(0.1		)
Total Federal	5.4		4.5			3.7
State:
Current	1.2		1.3			1.2
Deferred	0.1		(0.1		)	2.9
Total State	1.3		1.2			4.1
Total income tax provision	$	6.7	$	5.7		$	7.8

A reconciliation of the provision for income taxes as reported and the amount computed by multiplying the income before taxes and extraordinary item by the U.S. federal statutory rate of 35% was as follows (in millions):



	Year Ended January 1, 2015		Year Ended December 26, 2013		Year Ended December 27, 2012
Provision calculated at federal statutory income tax rate	$	5.9	$	4.9	$	5.1
State and local income taxes, net of federal benefit	0.8		0.8		2.7
Total income tax provision	$	6.7	$	5.7	$	7.8

Significant components of the Company’s net deferred tax liability consisted of the following at (in millions):



	January 1, 2015			December 26, 2013
Deferred tax assets:
Net operating loss carryforward	$	7.7		$	9.8
Excess of tax basis over book basis of fixed assets	10.8			13.6
Deferred revenue	9.3			9.5
Other	2.2			1.4
Total deferred tax assets before valuation allowance	30.0			34.3
Valuation allowance	(2.1		)	(2.4		)
Total deferred tax assets after valuation allowance	27.9			31.9
Deferred tax liabilities:
Deferred gain on sale of theatres	(19.2		)	(22.7		)
Excess of book basis over tax basis of intangible assets	(28.0		)	(28.0		)
Deferred rent	(3.0		)	(2.3		)
Other	(0.1		)	(0.1		)
Total deferred tax liabilities	(50.3		)	(53.1		)
Net deferred tax liability	$	(22.4	)	$	(21.2	)

As of January 1, 2015, the Company had net operating loss carryforwards for federal income tax purposes of approximately $13.6 million with expiration commencing during 2019. The Company’s net operating loss carryforwards were generated by the predecessor entities of UATC. The Tax Reform Act of 1986 imposed substantial restrictions on the utilization of net operating losses in the event of an "ownership change" of a corporation. Accordingly, the Company’s ability to utilize the net operating losses may be impaired as a result of the "ownership change" limitations.

In assessing the realizable value of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which these temporary differences become deductible. The Company has recorded a valuation allowance against deferred tax assets at January 1, 2015 and December 26, 2013 totaling $2.1 million and $2.4 million, respectively, as management believes it is more likely than not that certain deferred tax assets will not be realized in future tax periods. Future reductions in the valuation allowance associated with a change in management’s determination of the Company’s ability to realize these deferred tax assets will result in a decrease in the provision for income taxes. During the year ended January 1, 2015, the valuation allowance was decreased by $0.3 million primarily related to the expiration of certain state net operating losses.

As of January 1, 2015 and December 26, 2013, the Company had no unrecognized tax benefits. The Company does not believe that its gross unrecognized tax benefits will change within the next 12 months.

The Company files income tax returns in the U.S. federal jurisdiction and certain state jurisdictions as part of the REG income tax filings and files separate income tax returns in various other state jurisdictions as well. The Company's share of the REG current and deferred tax expense is determined on a separate company basis. REG and the Company are no longer subject to U.S. federal, or with limited exceptions, state examinations by tax authorities for years before 2010. However, the taxing authorities still have the ability to review the propriety of tax attributes created in closed tax years if such tax attributes are utilized in an open tax year. In May 2014, REG was notified that the Internal Revenue Service ("IRS") would examine its 2012 federal income tax return. In January 2015, REG was notified that the IRS would examine its 2010 federal income tax return. As of the year ended January 1, 2015, REG has not been notified of any items that are being disputed by the IRS for either year under examination. Management believes that it has provided adequate provision for income taxes relative to the tax years under examination.