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Income Taxes | 12 Months Ended
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Dec. 29, 2012
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes: The provision for income taxes consists of the following (in thousands):
| 2012 |  | 2011 |  | 2010
Current tax expense: |  |  |  |  |
Federal | $ | 165,519 |  |  | $ | 112,142 |  |  | $ | 85,854 |
State | 20,342 |  |  | 13,878 |  |  | 7,444 |
Total current | 185,861 |  |  | 126,020 |  |  | 93,298 |
Deferred tax expense (benefit): |  |  |  |  |  |  |  |
Federal | (20,857 | ) |  | 3,220 |  |  | 2,116 |
State | (5,724 | ) |  | (1,364 | ) |  | 1,554 |
Total deferred | (26,581 | ) |  | 1,856 |  |  | 3,670 |
Total provision | $ | 159,280 |  |  | $ | 127,876 |  |  | $ | 96,968 |
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the deferred tax assets and liabilities are as follows (in thousands):
| 2012 |  | 2011
Current tax assets: |  |  |
Inventory valuation | $ | 11,981 |  |  | $ | 10,171 |
Accrued employee benefit costs | 27,636 |  |  | 24,807 |
Accrued sales taxes | 3,564 |  |  | 4,221 |
Other | 8,439 |  |  | 9,251 |
| 51,620 |  |  | 48,450 |
Current tax liabilities: |  |  |  |  |
Inventory basis difference | (26,182 | ) |  | (37,730 | )
Prepaid expenses | (1,541 | ) |  | (1,055 | )
Other | (799 | ) |  | (798 | )
| (28,522 | ) |  | (39,583 | )
Net current tax asset | $ | 23,098 |  |  | $ | 8,867 |
Non-current tax assets: |  |  |  |  |
Capital lease obligation basis difference | $ | 1,001 |  |  | $ | 1,010 |
Rent expenses in excess of cash payments required | 25,263 |  |  | 23,584 |
Deferred compensation | 17,970 |  |  | 15,555 |
Other | 4,574 |  |  | 3,620 |
Valuation allowance | (862 | ) |  | (1,637 | )
| 47,946 |  |  | 42,132 |
Non-current tax liabilities: |  |  |  |  |
Depreciation | (47,219 | ) |  | (54,047 | )
Capital lease assets basis difference | (511 | ) |  | (531 | )
Other | (1,693 | ) |  | (1,381 | )
| (49,423 | ) |  | (55,959 | )
Net non-current tax liability | $ | (1,477 | ) |  | $ | (13,827 | )
Net deferred tax asset (liability) | $ | 21,621 |  |  | $ | (4,960 | )
We have evaluated the need for a valuation allowance for all or a portion of the deferred tax assets. With the exception of state tax credit carryforwards, we believe that all of the deferred tax assets will more likely than not be realized through future earnings. We had state tax credit carryforwards of $2.6 million and $2.7 million as of December 29, 2012 and December 31, 2011, respectively, with varying dates of expiration between 2013 and 2020. We provided a valuation allowance of $0.9 million and $1.6 million as of December 29, 2012 and December 31, 2011, respectively, due to our uncertainty of utilizing these credits before their expiration dates. A reconciliation of the provision for income taxes to the amounts computed at the federal statutory rate is as follows (in thousands):
| 2012 |  | 2011 |  | 2010
Tax provision at statutory rate | $ | 152,508 |  |  | $ | 122,715 |  |  | $ | 92,729 |
Tax effect of: |  |  |  |  |  |  |  |
State income taxes, net of federal tax benefits | 9,502 |  |  | 8,134 |  |  | 5,848 |
Permanent differences | (2,730 | ) |  | (2,973 | ) |  | (1,609 | )
| $ | 159,280 |  |  | $ | 127,876 |  |  | $ | 96,968 |
The Company and its affiliates file income tax returns in the U.S. and various state and local jurisdictions. With few exceptions, we are no longer subject to federal, state and local income tax examinations by tax authorities for years before 2008. The IRS commenced an examination of the Company’s federal tax returns for 2006 and 2007 which was completed in February 2011, and no IRS adjustments were proposed. In 2012, the IRS commenced an audit of the 2010 federal tax return. Various states have completed an examination of our income tax returns for 2008 through 2010 with minimal adjustments. The total amount of unrecognized tax benefits that, if recognized, would decrease the effective tax rate, is $4.7 million at December 29, 2012. In addition, we recognize current interest and penalties accrued related to these uncertain tax positions as interest expense, and the amount is not material to the Consolidated Statements of Income. The Company estimates the overall decrease in unrecognized tax benefits in the next twelve months will range between $0.6 million and $1.1 million. A reconciliation of the beginning and ending gross amount of unrecognized tax benefits (exclusive of interest and penalties) is as follows (in thousands):
| 2012 |  | 2011 |  | 2010
Balance at beginning of year | $ | 5,774 |  |  | $ | 4,801 |  |  | $ | 4,084 |
Additions based on tax positions related to the current year | 1,358 |  |  | 1,611 |  |  | 1,453 |
Additions for tax positions of prior years | — |  |  | — |  |  | — |
Reductions for tax positions of prior years | (1,234 | ) |  | (638 | ) |  | (736 | )
Reductions due to audit results | — |  |  | — |  |  | — |
Balance at end of year | $ | 5,898 |  |  | $ | 5,774 |  |  | $ | 4,801 |

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 109 -Paragraph 136, 172 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=6881521&loc=d3e23780-122690 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 08 -Paragraph h -Article 4 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 109 -Paragraph 43, 44, 45, 46, 47, 48, 49 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32537-109319 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32639-109319 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32559-109319 + Details
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