XML 101 R11.htm IDEA: XBRL DOCUMENT
v3.19.3

Income Taxes | 12 Months Ended
--- | ---
Aug. 31, 2019
Income Tax Disclosure [Abstract] |
Income Taxes | 4. Income Taxes The provision / (benefit) for income taxes consists of the following (in thousands):
Fiscal year |  | 2019 |  |  | 2018 |  |  | 2017 |
Current: |  |  |  |  |  |  |  |  |  |  |  |
Federal |  | $ | 38,545 |  |  | $ | 23,815 |  |  | $ | 37,027 |
Foreign |  |  | (200 | ) |  |  | 527 |  |  |  | 1,995 |
State |  |  | 11,733 |  |  |  | 8,012 |  |  |  | 6,642 |
Total current |  | $ | 50,078 |  |  | $ | 32,354 |  |  | $ | 45,664 |
Deferred: |  |  |  |  |  |  |  |  |  |  |  |
Federal |  | $ | 7,289 |  |  | $ | (11,517 | ) |  | $ | (520 | )
Foreign |  |  | 645 |  |  |  | 363 |  |  |  | 123 |
State |  |  | 778 |  |  |  | 2,151 |  |  |  | (340 | )
Total deferred |  | $ | 8,712 |  |  | $ | (9,003 | ) |  | $ | (737 | )
Total |  | $ | 58,790 |  |  | $ | 23,351 |  |  | $ | 44,927 |
The following table reconciles the provision for income taxes using the statutory federal income tax rate to the actual provision for income taxes:
Fiscal year |  | 2019 |  |  | 2018 |  |  | 2017 |
Income taxes at the statutory federal income tax rate |  |  | 21.0 | % |  |  | 25.9 | % |  |  | 35.0 | %
State income taxes |  |  | 4.3 |  |  |  | 4.1 |  |  |  | 3.5 |
Other |  |  | (0.6 | ) |  |  | (2.8 | ) |  |  | 0.5 |
Deemed Repatriation of Non—U.S. Earnings, net foreign tax credits and other (collectively, Transition Tax) |  |  | — |  |  |  | 1.4 |  |  |  | — |
Impact of U.S. tax reform federal tax rate reduction |  |  | — |  |  |  | (16.1 | ) |  |  | — |
Total |  |  | 24.7 | % |  |  | 12.5 | % |  |  | 39.0 | %
The components of deferred income taxes included on the consolidated balance sheets are as follows (in thousands):
|  | August 31, 2019 |  |  | August 25, 2018 |
Deferred Tax Assets |  |  |  |  |  |  |  |
Payroll and benefit related |  | $ | 15,929 |  |  | $ | 14,718 |
Insurance related |  |  | 11,948 |  |  |  | 10,880 |
Environmental |  |  | 7,093 |  |  |  | 6,593 |
Accrued expenses |  |  | 2,164 |  |  |  | 3,513 |
Other |  |  | 7,301 |  |  |  | 7,440 |
Total deferred tax assets |  | $ | 44,435 |  |  | $ | 43,144 |
Deferred Tax Liabilities |  |  |  |  |  |  |  |
Payroll and benefit related |  | $ | 16,056 |  |  | $ | — |
Tax in excess of book depreciation |  |  | 42,691 |  |  |  | 39,877 |
Purchased intangible assets |  |  | 29,633 |  |  |  | 27,206 |
Rental merchandise in service |  |  | 46,649 |  |  |  | 44,508 |
Other |  |  | 290 |  |  |  | 318 |
Total deferred tax liabilities |  |  | 135,319 |  |  |  | 111,909 |
Net deferred tax liability |  | $ | 90,884 |  |  | $ | 68,765 |
The Company regularly reviews deferred tax assets for recoverability based upon projected future taxable income and the expected timing of the reversals of existing temporary differences. Although realization is not assured, management believes it is more likely than not that the recorded deferred tax assets will be realized. U.S. Tax Reform The Act enacted on December 22, 2017, among other matters, reduced the U.S. federal corporate income tax rate from 35.0% to 21.0%, required companies to pay a one-time transition tax on earnings of certain foreign subsidiaries that were previously tax deferred, and created new taxes on certain foreign sourced earnings. On December 22, 2017, the Securities and Exchange Commission (the “SEC”) issued Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act (“SAB 118”) directing SEC registrants to consider the impact of the U.S. legislation as “provisional” when a registrant does not have the necessary information available, prepared or analyzed (including computations) in reasonable detail to complete its accounting for the change in tax law. In accordance with SAB 118, during fiscal 2018 the Company recorded its best estimates based on its interpretation of the U.S. legislation while it continued to accumulate data to finalize the underlying calculations. This resulted in the Company recording a provisional net income tax benefit of $20.1 million for the fiscal year ended August 25, 2018 related to remeasuring its U.S. net deferred tax liabilities at the lower tax rate and the one-time transition tax. As a result of the Act, U.S. corporations are subject to lower income tax rates. For the fiscal year ended August 31, 2019, the statutory tax rate for the period was 21.0% compared to the applicable blended statutory tax rate of 25.9% for the corresponding period in the prior year. During the second quarter of fiscal 2019, the Company completed its accounting for the tax effects of enactment of the Act as required by SAB 118. There were no changes from the provisional calculation as recorded through August 25, 2018 to the final calculation. Effective tax rate The Company’s effective tax rate for the fiscal year ended August 31, 2019 was 24.7% as compared to 12.5% for the corresponding period in the prior year. The increase in the effective tax rate was primarily due to the impact of the Act, which required us to remeasure our U.S net deferred income tax liabilities in fiscal 2018. Foreign tax effects The Act subjects a U.S. shareholder to tax on GILTI, defined below, earned by certain foreign subsidiaries. The FASB Staff Q&A, Topic 740, No. 5, Accounting for Global Intangible Low-Taxed Income (“GILTI”), states that an entity can make an accounting policy election to either recognize deferred taxes for temporary basis differences expected to reverse as GILTI in future years or to provide for the tax expense related to GILTI in the year the tax is incurred as a current period expense only. The Company will account for GILTI in the year the tax is incurred as a current period expense. As of August 31, 2019, unremitted foreign earnings, have been retained by the Company’s foreign subsidiaries for indefinite reinvestment. Upon repatriation of those earnings, in the form of dividends or otherwise, the Company could be subject to immaterial withholding taxes payable to the various foreign countries. Uncertain tax positions As of August 31, 2019 and August 25, 2018, there was $7.7 million and $2.2 million, respectively, of unrecognized tax benefits, of which $7.0 million and $1.9 million, respectively, would favorably impact the Company’s effective tax rate, if recognized. The Company recognized interest and penalties related to uncertain tax positions as a component of income tax expense which is consistent with the recognition of these items in prior reporting periods. As of August 31, 2019 and August 25, 2018, the Company had accrued a total of $0.2 million and $0.1 million, respectively, in interest and penalties, in its long-term accrued liabilities. For the years ended August 31, 2019, August 25, 2018 and August 26, 2017 the Company recognized a nominal expense in its Consolidated Statement of Income related to interest and penalties. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands):
Balance at August 26, 2017 |  | $ | 4,214 |
Additions based on tax positions related to the current year |  |  | 487 |
Additions for tax positions of prior years |  |  | — |
Reductions for tax positions of prior years |  |  | (2,073 | )
Statute expirations |  |  | (430 | )
Balance at August 25, 2018 |  |  | 2,198 |
Additions based on tax positions related to the current year |  |  | 329 |
Additions for tax positions of prior years |  |  | 5,535 |
Statute expirations |  |  | (394 | )
Balance at August 31, 2019 |  | $ | 7,668 |
The Company has a significant portion of its operations in the United States and Canada. It is required to file federal income tax returns as well as state income tax returns in a majority of the U.S. states and also in the Canadian provinces of Alberta, British Columbia, Ontario, Saskatchewan, Quebec and New Brunswick. At times, the Company is subject to audits in these jurisdictions, which typically are complex and can require several years to resolve. The final resolution of any such tax audits could result in either a reduction in the Company’s accruals or an increase in its income tax provision, both of which could have a material impact on the consolidated results of operations in any given period. All U.S. and Canadian federal income tax statutes have lapsed for filings up to and including fiscal years 2014 and 2011, respectively. With a few exceptions, the Company is no longer subject to state and local income tax examinations for periods prior to fiscal 2015. The Company is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will change significantly in the next 12 months.

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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration