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Income Taxes | 12 Months Ended
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Jul. 31, 2015
Income Tax Disclosure [Abstract] |
Income Taxes | 11 — Income Taxes Income before taxes consisted of the following:
| Year ended July 31,
(In thousands) | 2015 |  | 2014 |  | 2013
U.S. | $ | 286,169 |  |  | $ | 218,450 |  |  | $ | 236,118 |
Non-U.S. | 45,900 |  |  | 51,585 |  |  | 40,754 |
Total income before taxes | $ | 332,069 |  |  | $ | 270,035 |  |  | $ | 276,872 |
Income tax expense (benefit) from continuing operations consisted of the following:
| Year ended July 31,
(In thousands) | 2015 |  | 2014 |  | 2013
Federal: |  |  |  |  |  |  |  |
Current | $ | 95,468 |  |  | $ | 90,207 |  |  | $ | 87,484 |
Deferred | 5,841 |  |  | (9,589 | ) |  | (1,073 | )
| 101,309 |  |  | 80,618 |  |  | 86,411 |
State: |  |  |  |  |  |  |  |
Current | 1,160 |  |  | 1,912 |  |  | 3,871 |
Deferred | (86 | ) |  | (279 | ) |  | 66 |
| 1,074 |  |  | 1,633 |  |  | 3,937 |
Foreign: |  |  |  |  |  |  |  |
Current | 11,062 |  |  | 10,077 |  |  | 9,090 |
Deferred | (1,159 | ) |  | (980 | ) |  | (2,591 | )
| 9,903 |  |  | 9,097 |  |  | 6,499 |
Income tax expense | $ | 112,286 |  |  | $ | 91,348 |  |  | $ | 96,847 |
A reconciliation of the expected U.S. statutory tax rate to the actual effective income tax rate is as follows:
| Year ended July 31,
(In thousands) | 2015 |  | 2014 |  | 2013
Federal statutory rate | 35.0 | % |  | 35.0 | % |  | 35.0 | %
State income taxes, net of federal income tax benefit | 1.1 |  |  | 1.1 |  |  | 1.1 |
Foreign rate differential | (1.9 | ) |  | (2.1 | ) |  | (1.8 | )
Compensation and fringe benefits | 0.1 |  |  | 0.1 |  |  | 0.1 |
Other differences | (0.5 | ) |  | (0.3 | ) |  | 0.6 |
Effective tax rate | 33.8 | % |  | 33.8 | % |  | 35.0 | %
The tax effects of temporary differences that give rise to significant portions of the deferred tax assets (liabilities) are presented below:
| July 31,
(In thousands) | 2015 |  | 2014
Deferred tax assets: |  |  |  |  |
Allowance for doubtful accounts | $ | 992 |  |  | $ | 1,209 |
Accrued compensation and benefits | 40,391 |  |  | 36,780 |
State taxes | 577 |  |  | 416 |
Accrued other | 3,967 |  |  | 2,962 |
Deferred revenue | 798 |  |  | 1,301 |
Property and equipment | 16,957 |  |  | 18,627 |
Losses carried forward | 4,362 |  |  | 4,312 |
Federal tax benefit | 7,832 |  |  | 10,457 |
Total gross deferred tax assets | 75,876 |  |  | 76,064 |
Less valuation allowance | (2,650 | ) |  | (2,210 | )
Net deferred tax assets | 73,226 |  |  | 73,854 |
Deferred tax liabilities: |  |  |  |  |
Vehicle pooling costs | (7,749 | ) |  | (7,420 | )
Prepaid insurance | (890 | ) |  | (1,950 | )
Intangibles and goodwill | (37,673 | ) |  | (33,332 | )
Total gross deferred tax liabilities | (46,312 | ) |  | (42,702 | )
Net deferred tax assets | $ | 26,914 |  |  | $ | 31,152 |
The above net deferred tax assets and liabilities have been reflected in the accompanying consolidated balance sheets as follows:
| July 31,
(In thousands) | 2015 |  | 2014
North America current assets | $ | 3,396 |  |  | $ | 1,803 |
North America non-current assets | 28,856 |  |  | 36,639 |
Foreign non-current liabilities | (5,338 | ) |  | (7,290 | )
Net deferred tax assets | $ | 26,914 |  |  | $ | 31,152 |
The Company’s ability to realize deferred tax assets is dependent on its ability to generate future taxable income. Accordingly, the Company has established a valuation allowance in taxable jurisdictions where the utilization of the tax assets is uncertain. Additional timing differences or future tax losses may occur which could warrant a need for establishing additional valuation allowances against certain deferred tax assets. The valuation allowance for the years ended July 31, 2015 and 2014 was $2.7 million and $2.2 million, respectively. As of July 31, 2015 and 2014, if recognized, the portion of liabilities for unrecognized tax benefits that would favorably affect the Company’s effective tax rate was $17.4 million and $18.4 million, respectively. It is possible that the amount of unrecognized tax benefits will change in the next twelve months, due to tax legislation updates or future audit outcomes; however an estimate of the range of the possible change cannot be made at this time. The following table summarizes the activities related to the Company’s unrecognized tax benefits:
| July 31,
(In thousands) | 2015 |  | 2014 |  | 2013
Beginning balance | $ | 18,419 |  |  | $ | 17,178 |  |  | $ | 16,946 |
Increases related to current year tax position | 3,441 |  |  | 1,805 |  |  | 1,844 |
Prior year tax positions: |  |  |  |  |  |  |  |
Prior year increase | 599 |  |  | 2,997 |  |  | 1,474 |
Prior year decrease | — |  |  | (523 | ) |  | — |
Cash settlement | (225 | ) |  | — |  |  | — |
Lapse of statute of limitations | (4,806 | ) |  | (3,038 | ) |  | (3,086 | )
Ending balance | $ | 17,428 |  |  | $ | 18,419 |  |  | $ | 17,178 |
It is the Company’s continuing practice to recognize interest and penalties related to income tax matters in income tax expense. As of July 31, 2015, 2014 and 2013, the Company had accrued interest and penalties related to unrecognized tax benefits of $3.8 million, $5.4 million and $5.9 million, respectively. The Company is currently under audit by certain taxing authorities in the U.S. for fiscal years 2011 to 2014. The Company is no longer subject to U.S. federal and state income tax examination for fiscal years prior to 2012, except the jurisdictions currently under audit. At this time, the Company does not believe that the outcome of any examination will have a material impact on the Company’s consolidated results of operations and financial position. In the years ended July 31, 2015, 2014 and 2013, the Company recognized a tax benefit of $3.0 million, $2.3 million and $6.1 million, respectively, upon the exercise of certain stock options, which was reflected in stockholders’ equity. The Company has not provided for U.S. federal income and foreign withholding taxes on its $134.0 million foreign subsidiaries’ undistributed earnings as of July 31, 2015, because the Company intends to reinvest such earnings indefinitely in its foreign operations. Specifically, the earnings will be dedicated to the following areas outside the U.S. (i) funding operating and capital spending needs in existing foreign markets; (ii) funding merger and acquisition deals both in existing and new foreign markets; and (iii) other investments to help expand the Company's footprint in foreign emerging markets. The Company does not anticipate the need for any foreign cash in the U.S. operations. Upon distribution of those earnings in the form of dividends or otherwise, the Company would be subject to U.S. income taxes (subject to an adjustment for foreign tax credits). It is not practical to determine the income tax liability that might be incurred if these earnings were to be distributed.

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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 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 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 08 -Paragraph h -Article 4 + Details
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