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Income Taxes | 6 Months Ended
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Jan. 27, 2018
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes The components of the (benefit) provision for income taxes were as follows (dollars in thousands):
| Six Months Ended |  | Fiscal Year Ended
| January 27, 2018 |  | July 29, 2017 |  | July 30, 2016 |  | July 25, 2015
Current: |  |  |  |  |  |  |
Federal | $ | (4,384 | ) |  | $ | 62,455 |  |  | $ | 42,096 |  |  | $ | 42,516 |
Foreign | 598 |  |  | 176 |  |  | 310 |  |  | 502 |
State | 1,166 |  |  | 12,344 |  |  | 8,399 |  |  | 6,998 |
| (2,620 | ) |  | 74,975 |  |  | 50,805 |  |  | 50,016 |
Deferred: |  |  |  |  |  |  |
Federal | (21,332 | ) |  | 17,051 |  |  | 26,467 |  |  | 305 |
Foreign | (37 | ) |  | (35 | ) |  | (296 | ) |  | 268 |
State | 1,704 |  |  | 1,217 |  |  | 611 |  |  | 671 |
| (19,665 | ) |  | 18,233 |  |  | 26,782 |  |  | 1,244 |
Total (benefit) provision for income taxes | $ | (22,285 | ) |  | $ | 93,208 |  |  | $ | 77,587 |  |  | $ | 51,260 |
The Tax Cu ts and Jobs Act of 2017 (“Tax Reform”) was enacted in December 2017 and includes significant changes to U.S. income tax law. Tax Reform, among other things, reduced the U.S. federal corporate tax rate from 35 percent to 21 percent. The Company’s interpretations of the provisions of Tax Reform could differ from future interpretations and guidance from the U.S Treasury Department, the IRS and other regulatory agencies, including state taxing authorities in jurisdictions where the Company operates. Any future adjustments resulting from these factors would impact the Company’s provision for income taxes and effective tax rate in the period in which they are made. The Company’s effective income tax rate differs from the statutory rate for the tax jurisdictions where it operates primarily as the result of the impact of non-deductible and non-taxable items, tax credits recognized in relation to pre-tax results, certain tax impacts from the vesting and exercise of share-based awards, and impacts from Tax Reform. The Company was subject to a blended statutory tax rate of approximately 33% for the six months ended January 27, 2018 resulting from Tax Reform taking effect for a portion of the period based on the Company’s fiscal year end. A reconciliation of the amount computed by applying the Company’s blended statutory income tax rate to pre-tax income to the total tax provision is as follows (dollars in thousands):
| Six Months Ended |  | Fiscal Year Ended
| January 27, 2018 |  | July 29, 2017 |  | July 30, 2016 |  | July 25, 2015
Statutory rate applied to pre-tax income | $ | 15,334 |  |  | $ | 87,649 |  |  | $ | 72,214 |  |  | $ | 47,454 |
State taxes, net of federal tax benefit | 1,406 |  |  | 9,868 |  |  | 7,398 |  |  | 5,159 |
Tax Reform and related effects | (32,249 | ) |  | — |  |  | — |  |  | — |
Federal benefit of vesting and exercise of share-based awards | (7,067 | ) |  | — |  |  | — |  |  | — |
Non-deductible and non-taxable items, net | 1,585 |  |  | (4,686 | ) |  | (2,013 | ) |  | (1,220 | )
Change in accruals for uncertain tax positions | 250 |  |  | 632 |  |  | 113 |  |  | (74 | )
Tax credits | (1,596 | ) |  | — |  |  | — |  |  | — |
Other items, net | 52 |  |  | (255 | ) |  | (125 | ) |  | (59 | )
Total (benefit) provision for income taxes | $ | (22,285 | ) |  | $ | 93,208 |  |  | $ | 77,587 |  |  | $ | 51,260 |
During the six months ended January 27, 2018, the Company recognized an income tax benefit of approximately $32.2 million primarily resulting from the re-measurement of the Company’s net deferred tax liabilities to reflect the reduced rate under Tax Reform that will apply in future periods when these deferred taxes are settled or realized. Additionally, the Company recognized an income tax benefit (including federal and state tax benefits) of approximately $7.8 million during the six months ended January 27, 2018 for certain tax effects of the vesting and exercise of share-based amounts in accordance with ASU 2016-09 as further described in Note 1, Basis of Presentation and Accounting Policies. During fiscal 2017, 2016, and 2015 non-taxable and non-deductible items consisted of a production related tax deduction of $6.0 million, $4.5 million, and $4.0 million, respectively, offset by $1.3 million, $2.5 million and $2.8 million of non-deductible items, respectively. There was no production related tax deduction for the six months ended January 27, 2018. Additionally, beginning in fiscal 2019, the production related tax deduction will no longer be permitted as a result of changes from Tax Reform. During fiscal 2017, 2016 and 2015, tax credits of $1.0 million, $0.7 million and $0.5 million, respectively, were presented within Non-deductible and non-taxable items, net in the table above. Deferred Income Taxes The deferred tax provision represents the change in the deferred tax assets and the liabilities representing the tax consequences of changes in the amount of temporary differences and changes in tax rates during the year. The significant components of deferred tax assets and liabilities consisted of the following (dollars in thousands):
| January 27, 2018 |  | July 29, 2017 |  | July 30, 2016
Deferred tax assets: |  |  |  |  |
Insurance and other reserves | $ | 22,368 |  |  | $ | 36,955 |  |  | $ | 33,847 |
Allowance for doubtful accounts and reserves | 1,081 |  |  | 1,975 |  |  | 1,013 |
Net operating loss carryforwards | 822 |  |  | 765 |  |  | 1,151 |
Stock-based compensation | 3,405 |  |  | 8,022 |  |  | 6,424 |
Other | 1,174 |  |  | 1,750 |  |  | 1,363 |
Total deferred tax assets | 28,850 |  |  | 49,467 |  |  | 43,798 |
Valuation allowance | (148 | ) |  | (122 | ) |  | (358 | )
Deferred tax assets, net of valuation allowance | $ | 28,702 |  |  | $ | 49,345 |  |  | $ | 43,440 |
Deferred tax liabilities: |  |  |  |  |
Property and equipment | $ | 59,933 |  |  | $ | 87,581 |  |  | $ | 63,926 |
Goodwill and intangibles | 25,852 |  |  | 38,125 |  |  | 32,632 |
Other | 345 |  |  | 741 |  |  | 736 |
Deferred tax liabilities | $ | 86,130 |  |  | $ | 126,447 |  |  | $ | 97,294 |
Net deferred tax liabilities | $ | 57,428 |  |  | $ | 77,102 |  |  | $ | 53,854 |
The Company’s net deferred tax liabilities as of January 27, 2018 have been re-measured to reflect the reduced rate under Tax Reform that will apply in future periods when these deferred taxes are settled or realized. As discussed in Note 1, Basis of Presentation and Accounting Policies, the Company has adopted ASU 2015-17 on a prospective basis effective July 30, 2017. Under the amended guidance of ASU 2015-17, deferred tax liabilities and assets are solely classified as non-current in the consolidated balance sheets. The valuation allowance above reduces the deferred tax asset balances to the amount that the Company has determined is more likely than not to be realized. The valuation allowance primarily relates to immaterial state net operating loss carryforwards, which generally begin to expire in fiscal 2022. Uncertain Tax Positions As of January 27, 2018, July 29, 2017, and July 30, 2016 the Company had total unrecognized tax benefits of $3.3 million, $3.1 million, and $2.4 million, respectively, resulting from uncertain tax positions. The Company’s effective tax rate will be reduced during future periods if it is determined these unrecognized tax benefits are realizable. The Company had approximately $1.2 million, $1.2 million, and $1.0 million accrued for the payment of interest and penalties as of January 27, 2018, July 29, 2017, and July 30, 2016, respectively. Interest expense related to unrecognized tax benefits for the Company was not material during the 2018 transition period or fiscal 2017, 2016, or 2015. A summary of unrecognized tax benefits is as follows (dollars in thousands):
| Six Months Ended |  | Fiscal Year Ended
| January 27, 2018 |  | July 29, 2017 |  | July 30, 2016 |  | July 25, 2015
Balance at beginning of year | $ | 3,072 |  |  | $ | 2,440 |  |  | $ | 2,327 |  |  | $ | 2,401 |
Additions based on tax positions related to the fiscal year | 283 |  |  | 441 |  |  | 161 |  |  | 44 |
Additions (reductions) based on tax positions related to prior years | (33 | ) |  | 229 |  |  | 86 |  |  | (98 | )
Reductions related to the expiration of statutes of limitation | — |  |  | (38 | ) |  | (134 | ) |  | (20 | )
Balance at end of year | $ | 3,322 |  |  | $ | 3,072 |  |  | $ | 2,440 |  |  | $ | 2,327 |

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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=65882285&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=65882285&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=65882285&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=65882285&loc=d3e32537-109319 + Details
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