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INCOME TAXES | 12 Months Ended
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Jul. 28, 2018
Income Tax Disclosure [Abstract] |
INCOME TAXES | INCOME TAXES For the fiscal year ended July 28, 2018, income (loss) before income taxes consists of $205.3 million from U.S. operations and $7.4 million from foreign operations. For the fiscal year ended July 29, 2017, income before income taxes consists of $211.5 million from U.S. operations and $2.9 million from foreign operations. For the fiscal year ended July 30, 2016, income before income taxes consists of $208.8 million from U.S. operations and ($0.6) million from foreign operations. Total federal and state income tax (benefit) expense consists of the following:
| Current |  | Deferred |  | Total
| (In thousands)
Fiscal year ended July 28, 2018 |  |  |  |  |  |  |  |
U.S. Federal | $ | 46,210 |  |  | $ | (16,648 | ) |  | $ | 29,562 |
State & Local | 13,310 |  |  | 1,878 |  |  | 15,188 |
Foreign | 2,374 |  |  | (49 | ) |  | 2,325 |
| $ | 61,894 |  |  | $ | (14,819 | ) |  | $ | 47,075 |
Fiscal year ended July 29, 2017 |  |  |  |  |  |  |  |
U.S. Federal | $ | 70,669 |  |  | $ | (1,874 | ) |  | $ | 68,795 |
State & Local | 14,653 |  |  | (82 | ) |  | 14,571 |
Foreign | 837 |  |  | 65 |  |  | 902 |
| $ | 86,159 |  |  | $ | (1,891 | ) |  | $ | 84,268 |
Fiscal year ended July 30, 2016 |  |  |  |  |  |  |  |
U.S. Federal | $ | 57,157 |  |  | $ | 11,383 |  |  | $ | 68,540 |
State & Local | 12,718 |  |  | 1,310 |  |  | 14,028 |
Foreign | 101 |  |  | (213 | ) |  | (112 | )
| $ | 69,976 |  |  | $ | 12,480 |  |  | $ | 82,456 |
Total income tax expense (benefit) was different than the amounts computed by applying the statutory federal income tax rate to income before income taxes because of the following:
| Fiscal year ended
| July 28, 2018 |  | July 29, 2017 |  | July 30, 2016
| (In thousands)
Computed "expected" tax expense | $ | 57,359 |  |  | $ | 75,048 |  |  | $ | 72,878 |
State and local income tax, net of Federal income tax benefit | 10,501 |  |  | 9,694 |  |  | 9,412 |
Non-deductible expenses | 955 |  |  | 1,951 |  |  | 1,549 |
Tax effect of share-based compensation | 149 |  |  | 29 |  |  | 86 |
General business credits | (552 | ) |  | (915 | ) |  | (135 | )
Impacts related to the TCJA | (21,719 | ) |  | — |  |  | — |
Other, net | 382 |  |  | (1,539 | ) |  | (1,334 | )
Total income tax expense | $ | 47,075 |  |  | $ | 84,268 |  |  | $ | 82,456 |
The income tax expense (benefit) for the years ended July 28, 2018, July 29, 2017 and July 30, 2016 was allocated as follows:
| July 28, 2018 |  | July 29, 2017 |  | July 30, 2016
| (In thousands)
Income tax expense | $ | 47,075 |  |  | $ | 84,268 |  |  | $ | 82,456 |
Stockholders' equity, difference between compensation expense for tax purposes and amounts recognized for financial statement purposes | — |  |  | 1,320 |  |  | 83 |
Other comprehensive income | 1,561 |  |  | 3,222 |  |  | (2,050 | )
| $ | 48,636 |  |  | $ | 88,810 |  |  | $ | 80,489 |
The tax effects of temporary differences that give rise to significant portions of the net deferred tax assets and deferred tax liabilities at July 28, 2018 and July 29, 2017 are presented below:
| July 28, 2018 |  | July 29, 2017
| (In thousands)
Deferred tax assets: |  |  |
Inventories, principally due to additional costs inventoried for tax purposes | $ | 7,265 |  |  | $ | 9,416 |
Compensation and benefits related | 25,740 |  |  | 35,482 |
Accounts receivable, principally due to allowances for uncollectible accounts | 4,269 |  |  | 5,639 |
Accrued expenses | 119 |  |  | 4,466 |
Net operating loss carryforwards | 482 |  |  | 940 |
Foreign tax credits | 445 |  |  | — |
Other deferred tax assets | 117 |  |  | — |
Total gross deferred tax assets | 38,437 |  |  | 55,943 |
Less valuation allowance | (445 | ) |  | — |
Net deferred tax assets | $ | 37,992 |  |  | $ | 55,943 |
Deferred tax liabilities: |  |  |
Plant and equipment, principally due to differences in depreciation | $ | 39,978 |  |  | $ | 59,414 |
Intangible assets | 36,544 |  |  | 53,633 |
Interest rate swap agreements | 2,000 |  |  | 876 |
Accrued expenses | 3,854 |  |  | — |
Other | — |  |  | 218 |
Total deferred tax liabilities | 82,376 |  |  | 114,141 |
Net deferred tax liabilities | $ | (44,384 | ) |  | $ | (58,198 | )
Current deferred income tax assets | $ | — |  |  | $ | 40,635 |
Non-current deferred income tax liabilities | (44,384 | ) |  | (98,833 | )
| $ | (44,384 | ) |  | $ | (58,198 | )
New tax legislation, the TCJA, was enacted on December 22, 2017. ASC 740, Accounting for Income Taxes, requires companies to recognize the effect of tax law changes in the period of enactment even though the effective date for most TCJA provisions is for tax years beginning after December 31, 2017. Given the significance of the legislation, the SEC staff issued SAB 118, which allows registrants to record provisional amounts concerning TCJA impacts during a one year “measurement period” similar to that used when accounting for business combinations. The measurement period is deemed to have ended earlier when the registrant has obtained, prepared and analyzed the information necessary to finalize its accounting. During the measurement period, impacts of the law are expected to be recorded at the time a reasonable estimate for all or a portion of the effects can be made, and provisional amounts can be recognized and adjusted as information becomes available, prepared or analyzed. SAB 118 summarizes a process to be applied at each reporting period to account for and qualitatively disclose: (1) the effects of the change in tax law for which accounting is complete; (2) provisional amounts (or adjustments to provisional amounts) for the effects of the tax law where accounting is not complete, but that a reasonable estimate has been determined; and (3) a reasonable estimate cannot yet be made and therefore taxes are reflected in accordance with the law prior to the enactment of the TCJA. Provisional estimates have been recorded for the estimated impact of the TCJA based on information that is currently available to the Company. These provisional estimates are comprised of the one-time mandatory repatriation transition tax. The repatriation transition tax is expected to have an immaterial impact because of foreign tax credits available to the Company. As the Company completes its analysis of the TCJA, changes may be made to provisional estimates, and such changes will be reflected in the period in which the related adjustments are made. In assessing the need to establish a valuation reserve for the recoverability of deferred tax assets, the Company considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The Company considers relevant evidence, both positive and negative, to determine the need for a valuation allowance. Information evaluated includes the Company's financial position and results of operations for the current and preceding years, the availability of deferred tax liabilities and tax carrybacks, as well as an evaluation of currently available information about future years. At July 28, 2018, the Company had net operating loss carryforwards of approximately $2.3 million for federal income tax purposes. The federal carryforwards are subject to an annual limitation of approximately $0.3 million under Internal Revenue Code Section 382. The carryforwards expire at various times between fiscal years 2019 and 2027. As of July 28, 2018, the Company has sufficient taxable income in the federal carryback period and anticipates sufficient future taxable income over the periods in which the net operating losses can be utilized. The Company also has the availability of future reversals of taxable temporary differences that are expected to generate taxable income in the future. Therefore, the ultimate realization of net operating losses federal and state tax purposes appears more likely than not at July 28, 2018 and correspondingly no valuation allowance has been established. The retained earnings of the Company's non-U.S. subsidiary that are subject to deemed repatriation and taxation under the TCJA are $13.3 million at July 28, 2018. The Company utilized U.S. foreign tax credits to offset the deemed repatriation tax of $2.1 million. Further, we have established a deferred tax asset for the excess U.S. foreign tax credits of $0.4 million. Such credits are offset by a valuation allowance. The Company considers these unremitted earnings to be indefinitely reinvested; therefore, we have not provided a deferred tax liability for any residual tax that may be due upon repatriation of these earnings. The Company and its subsidiaries file income tax returns in the United States federal jurisdiction and in various state jurisdictions. UNFI Canada files income tax returns in Canada and certain of its provinces. U.S. federal income tax examination years prior to fiscal 2015 have either statutorily or administratively been closed with the Internal Revenue Service, and with limited exception, the fiscal tax years that remain subject to examination by state jurisdictions range from the Company's fiscal 2014 to fiscal 2017. The Company records interest and penalties related to unrecognized tax benefits as a component of income tax expense. The unrecognized tax benefit in the consolidated statements of income was de minimis for the fiscal years ended July 28, 2018, July 29, 2017, and July 30, 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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