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Income Taxes | 12 Months Ended
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Oct. 31, 2018
Income Tax Disclosure [Abstract] |
Income Tax Disclosure [Text Block] | Income Taxes The following table provides a reconciliation of our effective tax rate from the federal statutory tax rate for the fiscal years ended October 31, 2018, 2017, and 2016 ($ amounts in thousands):
| 2018 |  | 2017 |  | 2016
| $ |  | %* |  | $ |  | %* |  | $ |  | %*
Federal tax provision at statutory rate | 217,914 |  |  | 23.3 |  |  | 285,009 |  |  | 35.0 |  |  | 206,159 |  |  | 35.0 |
State tax provision, net of federal benefit | 47,073 |  |  | 5.0 |  |  | 34,656 |  |  | 4.3 |  |  | 26,970 |  |  | 4.6 |
Domestic production activities deduction | (18,168 | ) |  | (2.0 | ) |  | (12,835 | ) |  | (1.6 | ) |  | (16,874 | ) |  | (2.9 | )
Other permanent differences | (3,726 | ) |  | (0.4 | ) |  | (1,468 | ) |  | (0.2 | ) |  | (7,037 | ) |  | (1.2 | )
Reversal of accrual for uncertain tax positions | (4,741 | ) |  | (0.5 | ) |  | (3,981 | ) |  | (0.5 | ) |  | (11,177 | ) |  | (1.9 | )
Accrued interest on anticipated tax assessments | 737 |  |  | 0.1 |  |  | 984 |  |  | 0.1 |  |  | 1,964 |  |  | 0.3 |
Increase in unrecognized tax benefits | 1,122 |  |  | 0.1 |  |  | — |  |  | — |  |  | 2,052 |  |  | 0.3 |
Valuation allowance — recognized | — |  |  | — |  |  | — |  |  | — |  |  | 1,018 |  |  | 0.2 |
Valuation allowance — reversed | — |  |  | — |  |  | (32,154 | ) |  | (3.9 | ) |  | — |  |  | — |
Changes in tax law | (38,740 | ) |  | (4.1 | ) |  | — |  |  | — |  |  | — |  |  | — |
Excess stock compensation benefit | (4,236 | ) |  | (0.5 | ) |  | — |  |  | — |  |  | — |  |  | — |
Other | (11,470 | ) |  | (1.2 | ) |  | 8,605 |  |  | 1.1 |  |  | 3,857 |  |  | 0.7 |
Income tax provision* | 185,765 |  |  | 19.9 |  |  | 278,816 |  |  | 34.2 |  |  | 206,932 |  |  | 35.1 |
* | Due to rounding, amounts may not add.
On December 22, 2017, the Tax Cuts and Jobs Act (the “Tax Act”) was enacted into law, which changed many longstanding foreign and domestic corporate and individual tax rules, as well as rules pertaining to the deductibility of employee compensation and benefits. The Tax Act, among other changes, reduced the corporate income tax rate from 35% to 21% and repealed the domestic production activities deduction effective for tax years beginning after December 31, 2017. For companies with a fiscal year that does not end on December 31, the change in law requires the application of a blended tax rate for the year of the change. Our blended tax rate for our fiscal year ending October 31, 2018 was 23.3%. Thereafter, the applicable statutory rate will be 21%. ASC 740, “Income Taxes” (“ASC 740”), requires all companies to reflect the effects of the new law in the period in which the law was enacted. Accordingly, we reduced the statutory tax rate applied to earnings from 35% in fiscal 2017 to 23.3% in fiscal 2018. In addition, we remeasured our net deferred tax liability for the tax law change, which resulted in an income tax benefit of $35.5 million in fiscal 2018. In December 2017, the SEC staff issued Staff Accounting Bulletin No. 118 (“SAB 118”), which provides guidance on accounting for the tax effects of the Tax Act. SAB 118 provides a measurement period that should not extend beyond one year from the enactment date for companies to complete the accounting relating to the Tax Act under ASC 740. In accordance with SAB 118, a company must reflect the income tax effects of those aspects of the Tax Act for which the accounting under ASC 740 is complete. To the extent that a company’s accounting for certain income tax effects of the Tax Act is incomplete, but it is able to determine a reasonable estimate, it must record a provisional estimate in its financial statements. In connection with our analysis of the impact of the Tax Act through the nine months ended July 31, 2018, and in accordance with SAB 118, we recorded a provisional net tax benefit of $36.2 million related to the re-measurement of our net deferred tax liability based on the rates at which our deferred tax balances are expected to reverse in the future. As of October 31, 2018, we finalized our analysis of the impact and decreased the provisional net tax benefit by $0.7 million. We are subject to state tax in the jurisdictions in which we operate. We estimate our state tax liability based upon the individual taxing authorities’ regulations, estimates of income by taxing jurisdiction, and our ability to utilize certain tax-saving strategies. Based on our estimate of the allocation of income or loss among the various taxing jurisdictions and changes in tax regulations and their impact on our tax strategies, we estimated that our rate for state income taxes will be 6.6% in fiscal 2018. Our state income tax rate was 6.5% and 7.1% in fiscal 2017 and 2016, respectively. The following table provides information regarding the provision (benefit) for income taxes for each of the fiscal years ended October 31, 2018, 2017, and 2016 (amounts in thousands):
| 2018 |  | 2017 |  | 2016
Federal | $ | 157,836 |  |  | $ | 278,095 |  |  | $ | 189,170 |
State | 27,929 |  |  | 721 |  |  | 17,762 |
| $ | 185,765 |  |  | $ | 278,816 |  |  | $ | 206,932 |
Current | $ | 207,695 |  |  | $ | 93,106 |  |  | $ | 186,662 |
Deferred | (21,930 | ) |  | 185,710 |  |  | 20,270 |
| $ | 185,765 |  |  | $ | 278,816 |  |  | $ | 206,932 |
The components of income taxes payable at October 31, 2018 and 2017 are set forth below (amounts in thousands):
| 2018 |  | 2017
Current | $ | 28,804 |  |  | $ | 33,100 |
Deferred | 2,155 |  |  | 24,409 |
| $ | 30,959 |  |  | $ | 57,509 |
The following table provides a reconciliation of the change in the unrecognized tax benefits for the years ended October 31, 2018, 2017, and 2016 (amounts in thousands):
| 2018 |  | 2017 |  | 2016
Balance, beginning of year | $ | 16,993 |  |  | $ | 30,272 |  |  | $ | 51,889 |
Increase in benefit as a result of tax positions taken in prior years | 2,140 |  |  | 1,575 |  |  | 8,110 |
Increase in benefit as a result of tax positions taken in current year | 949 |  |  | 431 |  |  | 694 |
Decrease in benefit as a result of settlements | (4,707 | ) |  | (9,174 | ) |  | (28,976 | )
Decrease in benefit as a result of lapse of statute of limitations | (3,153 | ) |  | (6,111 | ) |  | (1,445 | )
Balance, end of year | $ | 12,222 |  |  | $ | 16,993 |  |  | $ | 30,272 |
The statute of limitations has expired on our federal tax returns for fiscal years through 2014. Our unrecognized tax benefits are included in the current portion of “Income taxes payable” on our Consolidated Balance Sheets. If these unrecognized tax benefits reverse in the future, they would have a beneficial impact on our effective tax rate at that time. During the next 12 months, it is reasonably possible that the amount of unrecognized tax benefits will change, but we are not able to provide a range of such change. The anticipated changes will be principally due to the expiration of tax statutes, settlements with taxing jurisdictions, increases due to new tax positions taken, and the accrual of estimated interest and penalties. The amounts accrued for interest and penalties are included in the current portion of “Income taxes payable” on our Consolidated Balance Sheets. The following table provides information as to the amounts recognized in our tax provision, before reduction for applicable taxes and reversal of previously accrued interest and penalties, of potential interest and penalties in the fiscal years ended October 31, 2018, 2017, and 2016, and the amounts accrued for potential interest and penalties at October 31, 2018 and 2017 (amounts in thousands):
Expense recognized in the Consolidated Statements of Operations and Comprehensive Income |
Fiscal year |
2018 | $ | 1,152 |
2017 | $ | 1,513 |
2016 | $ | 3,426 |
Accrued at: |
October 31, 2018 | $ | 2,115 |
October 31, 2017 | $ | 5,179 |
The components of net deferred tax assets and liabilities at October 31, 2018 and 2017 are set forth below (amounts in thousands):
| 2018 |  | 2017
Deferred tax assets: |  |  |
Accrued expenses | $ | 54,531 |  |  | $ | 88,527 |
Impairment charges | 51,124 |  |  | 84,534 |
Inventory valuation differences | 42,765 |  |  | 80,224 |
Stock-based compensation expense | 27,949 |  |  | 41,712 |
Amounts related to unrecognized tax benefits | 1,197 |  |  | 3,800 |
State tax, net operating loss carryforwards | 73,288 |  |  | 48,343 |
Other | 125 |  |  | 1,303 |
Total assets | 250,979 |  |  | 348,443 |
Deferred tax liabilities: |  |  |
Capitalized interest | 43,982 |  |  | 76,914 |
Deferred income | 181,839 |  |  | 261,286 |
Expenses taken for tax purposes not for book | 5,477 |  |  | 9,878 |
Depreciation | 6,877 |  |  | 4,694 |
Deferred marketing | 14,959 |  |  | 20,080 |
Total liabilities | 253,134 |  |  | 372,852 |
Net deferred tax liabilities | (2,155 | ) |  | (24,409 | )
In accordance with GAAP, we assess whether a valuation allowance should be established based on our determination of whether it is more-likely-than-not that some portion or all of the deferred tax assets would not be realized. At October 31, 2018 and 2017, we determined that it was more-likely-than-not that our deferred assets would be realized for federal purposes. Accordingly, at October 31, 2018 and 2017, we did not have valuation allowances recorded against our federal or state deferred tax assets. We file tax returns in the various states in which we do business. Each state has its own statutes regarding the use of tax loss carryforwards. Some of the states in which we do business do not allow for the carryforward of losses, while others allow for carryforwards for 5 years to 20 years. For state tax purposes, we establish valuation allowances for deferred tax assets in certain jurisdictions where it is more-likely-than-not that the deferred tax asset would not be realized. Due to past and projected losses in certain jurisdictions where we did not have carryback potential and/or could not sufficiently forecast future taxable income, we recognized a net cumulative valuation allowance against our state deferred tax assets at October 31, 2016. During fiscal 2016, we recognized new valuation allowances of $1.0 million. We did not recognize any new valuation allowances in fiscal 2018 and 2017. During fiscal 2017, due to improved operating results, we reversed $32.2 million of state deferred tax asset valuation allowances. No state deferred tax asset valuation allowances were reversed in fiscal 2018 and 2016.

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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 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
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