XML 30 R13.htm IDEA: XBRL DOCUMENT
v3.3.1.900

INCOME TAXES | 12 Months Ended
--- | ---
Jan. 03, 2016
Income Tax Disclosure [Abstract] |
INCOME TAXES |
(6) | INCOME TAXES
Income before provision for income taxes in 2015, 2014 and 2013 consists of the following (in thousands):
|  | 2015 |  |  | 2014 |  |  | 2013 |
Domestic |  | $ | 298,055 |  |  | $ | 250,730 |  |  | $ | 217,468 |
Foreign |  |  | 8,160 |  |  |  | 7,893 |  |  |  | 7,631 |
|  | $ | 306,215 |  |  | $ | 258,623 |  |  | $ | 225,099 |
The differences between the United States Federal statutory income tax provision (using the statutory rate of 35%) and the Company’s consolidated provision for income taxes for 2015, 2014 and 2013 are summarized as follows (in thousands):
|  | 2015 |  |  | 2014 |  |  | 2013 |
Federal income tax provision based on the statutory rate |  | $ | 107,175 |  |  | $ | 90,518 |  |  | $ | 78,785 |
State and local income taxes, net of related Federal income taxes |  |  | 8,589 |  |  |  | 7,320 |  |  |  | 5,880 |
Non-resident withholding and foreign income taxes |  |  | 15,750 |  |  |  | 15,032 |  |  |  | 13,923 |
Foreign tax and other tax credits |  |  | (18,345 | ) |  |  | (17,397 | ) |  |  | (16,423 | )
Non-deductible expenses, net |  |  | 1,180 |  |  |  | 1,284 |  |  |  | 1,161 |
Valuation allowance |  |  | (301 | ) |  |  | (369 | ) |  |  | 29 |
Unrecognized tax benefits, net of related Federal income taxes |  |  | 110 |  |  |  | (48 | ) |  |  | 232 |
Other |  |  | (732 | ) |  |  | (304 | ) |  |  | (1,473 | )
|  | $ | 113,426 |  |  | $ | 96,036 |  |  | $ | 82,114 |
The components of the 2015, 2014 and 2013 consolidated provision for income taxes are as follows (in thousands):
|  | 2015 |  |  | 2014 |  |  | 2013 |
Provision for Federal income taxes – |  |  |  |  |  |  |  |  |  |  |  |
Current provision |  | $ | 84,071 |  |  | $ | 70,958 |  |  | $ | 54,115 |
Deferred provision (benefit) |  |  | 862 |  |  |  | (873 | ) |  |  | 5,280 |
Total provision for Federal income taxes |  |  | 84,933 |  |  |  | 70,085 |  |  |  | 59,395 |
Provision for state and local income taxes – |  |  |  |  |  |  |  |  |  |  |  |
Current provision |  |  | 11,892 |  |  |  | 10,178 |  |  |  | 8,021 |
Deferred provision |  |  | 851 |  |  |  | 741 |  |  |  | 775 |
Total provision for state and local income taxes |  |  | 12,743 |  |  |  | 10,919 |  |  |  | 8,796 |
Provision for non-resident withholding and foreign income taxes |  |  | 15,750 |  |  |  | 15,032 |  |  |  | 13,923 |
|  | $ | 113,426 |  |  | $ | 96,036 |  |  | $ | 82,114 |
As of January 3, 2016 and December 28, 2014, the significant components of net deferred income taxes are as follows (in thousands):
|  | 2015 |  |  | 2014 |
Deferred Federal income tax assets – |  |  |  |  |  |  |  |
Insurance reserves |  | $ | 10,202 |  |  | $ | 10,359 |
Equity compensation |  |  | 12,040 |  |  |  | 11,697 |
Other accruals and reserves |  |  | 14,411 |  |  |  | 12,161 |
Bad debt reserves |  |  | 1,232 |  |  |  | 1,675 |
Valuation allowance |  |  | (155 | ) |  |  | (456 | )
Other |  |  | 5,409 |  |  |  | 5,082 |
Total deferred Federal income tax assets |  |  | 43,139 |  |  |  | 40,518 |
Deferred Federal income tax liabilities – |  |  |  |  |  |  |  |
Depreciation, amortization and asset basis differences |  |  | 3,667 |  |  |  | 899 |
Capitalized software |  |  | 21,398 |  |  |  | 16,628 |
Gain on debt extinguishments |  |  | 13,609 |  |  |  | 18,146 |
Other |  |  | 288 |  |  |  | 576 |
Total deferred Federal income tax liabilities |  |  | 38,962 |  |  |  | 36,249 |
Net deferred Federal income tax asset |  |  | 4,177 |  |  |  | 4,269 |
Net deferred state and local income tax asset |  |  | 1,688 |  |  |  | 2,475 |
Net deferred income taxes |  | $ | 5,865 |  |  | $ | 6,744 |
As of January 3, 2016, the classification of net deferred income taxes is summarized as follows (in thousands):
|  | Long-term |  |  | Total |
Deferred tax assets |  | $ | 5,865 |  |  | $ | 5,865 |
Net deferred income tax assets |  | $ | 5,865 |  |  | $ | 5,865 |
As of December 28, 2014, the classification of net deferred income taxes is summarized as follows (in thousands):
|  | Current |  |  | Long-term |  |  | Total |
Deferred tax assets |  | $ | 14,681 |  |  | $ | 28,312 |  |  | $ | 42,993 |
Deferred tax liabilities |  |  | (4,824 | ) |  |  | (31,425 | ) |  |  | (36,249 | )
Net deferred income taxes |  | $ | 9,857 |  |  | $ | (3,113 | ) |  | $ | 6,744 |
Realization of the Company’s deferred tax assets is dependent upon many factors, including, but not limited to, the Company’s ability to generate sufficient taxable income. Although realization of the Company’s net deferred tax assets is not assured, management believes it is more likely than not that the net deferred tax assets will be realized. On an ongoing basis, management will assess whether it remains more likely than not that the net deferred tax assets will be realized. For financial reporting purposes, the Company’s investment in foreign subsidiaries does not exceed its tax basis. Therefore no deferred income taxes have been provided. The Company recognizes the financial statement benefit of a tax position if it is more likely than not that the position is sustainable, based solely on its technical merits and consideration of the relevant taxing authority’s widely understood administrative practices and precedents. For tax positions meeting the “more likely than not” threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement with the relevant tax authority. The Company recognizes accrued interest related to unrecognized tax benefits in interest expense and penalties in income tax expense. During 2013, the Company accrued interest expense of $0.1 million. At December 29, 2013, the amount of unrecognized tax benefits was $3.6 million of which, if ultimately recognized, $2.1 million would be recognized as an income tax benefit and reduce the Company’s effective tax rate. At December 29, 2013, the Company had $0.6 million of accrued interest and no accrued penalties. This amount is excluded from the $3.6 million total unrecognized tax benefit. During 2014 and in connection with the sale of 14 Company-owned stores to franchisees, the Company recognized a capital gain and also released $0.3 million of a deferred tax valuation allowance. During 2014, the Company accrued interest expense of $0.1 million. At December 28, 2014, the amount of unrecognized tax benefits was $2.9 million of which, if ultimately recognized, $1.7 million would be recognized as an income tax benefit and reduce the Company’s effective tax rate. At December 28, 2014, the Company had $0.7 million of accrued interest and no accrued penalties. This amount is excluded from the $2.9 million total unrecognized tax benefit. During 2015 and in connection with the sale of four Company-owned stores to franchisees, the Company recognized a capital gain and also released $0.3 million of a deferred tax valuation allowance. During 2015, the Company reversed an interest expense accrual of $0.6 million. At January 3, 2016, the amount of unrecognized tax benefits was $2.1 million of which, if ultimately recognized, $1.7 million would be recognized as an income tax benefit and reduce the Company’s effective tax rate. At January 3, 2016, the Company had less than $0.1 million of accrued interest and no accrued penalties. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands):
Balance as of December 30, 2012 |  | $ | 3,472 |
Additions for tax positions of current year |  |  | 337 |
Additions for tax positions of prior years |  |  | 398 |
Reductions in tax positions from prior years for: |  |  |  |
Changes in prior year tax positions |  |  | (157 | )
Settlements during the period |  |  | (133 | )
Lapses of applicable statute of limitations |  |  | (344 | )
Balance as of December 29, 2013 |  |  | 3,573 |
Additions for tax positions of current year |  |  | 211 |
Additions for tax positions of prior years |  |  | 173 |
Reductions in tax positions from prior years for: |  |  |  |
Changes in prior year tax positions |  |  | (605 | )
Settlements during the period |  |  | (55 | )
Lapses of applicable statute of limitations |  |  | (358 | )
Balance as of December 28, 2014 |  |  | 2,939 |
Additions for tax positions of current year |  |  | 233 |
Additions for tax positions of prior years |  |  | 171 |
Reductions in tax positions from prior years for: |  |  |  |
Changes in prior year tax positions |  |  | (100 | )
Settlements during the period |  |  | (27 | )
Lapses of applicable statute of limitations |  |  | (1,101 | )
Balance as of January 3, 2016 |  | $ | 2,115 |
The Company continues to be under examination by certain states. The Company’s Federal statute of limitation has expired for years prior to 2012 and the relevant state and foreign statutes vary. The Company expects the current ongoing examinations to be concluded in the next twelve months and does not expect the assessment of any significant additional amounts in excess of amounts reserved.

X
- References No definition available. + Details
Name: | us-gaap_IncomeTaxDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- 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 Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 2: 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 Reference 3: 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 4: 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 5: 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 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration