Income Taxes

12 Months Ended

Oct. 31, 2012

Income Taxes

Income Taxes

[8] Income Taxes

The reconciliation of income tax from continuing operations computed at the U.S. federal statutory tax rate to the Company’s effective income tax rate is as follows:

	October 31
	2012		2011		2010
U.S. Federal Statutory Rate	35	%	35	%	35	%
State and Local Taxes, Net of U.S. Federal Tax Benefit	8.87	%	9.87	%	9.77	%
Permanent differences and Other	(0.44	)%	(0.94	)%	(0.94	)%
Actual Rate	43.43	%	43.93	%	43.83	%

The provision for income taxes shown in the consolidated statements of operations consists of the following:

	October 31
	2012			2011			2010
Current:
Federal	$	25,794		$	24,573		$	17,201
State & Local	10,203			9,825			7,069
Deferred:
Federal	(2,183		)	(4,223		)	(2,618		)
State and Local	(1,454		)	(1,688		)	(1,070		)
Total Provision for Income Taxes	$	32,360		$	28,487		$	20,582

At October 31, 2012 and 2011, the Company had a net deferred tax asset of approximately $27,190 and $23,552, respectively.  The deferred taxes primarily relate to timing differences associated with the deductibility of depreciation and amortization, bad debts and certain accrued expenses and deferred costs.  For fiscal years ended in 2012 and in 2011, the Company had no material net operating loss carry-forwards available to reduce current year taxable income.

	October 31,
	2012		2011
Deferred Tax Asset:
Bad Debt Allowance	$	22,560	$	19,897
Depreciation and amortization	1,963		1,723
Accrued Expenses	2,667		1,932
Deferred Tax Asset - Net	27,190		23,552
Current Deferred Tax Asset - Net	24,912		21,710
Long Term Deferred Tax Asset - Net	2,278		1,842
Deferred Tax Asset — Net	$	27,190	$	23,552

During fiscal year ended October 31, 2012 the Company recorded a net deferred tax benefit of $3,638.  This reflects a net benefit of approximately $2,664 in allowance for bad debts, a benefit of approximately $240 from depreciation and amortization timing differences, and a benefit of approximately $734  in certain accrued expenses. Although realization is not assured and dependent upon things such as generating sufficient taxable income in future periods, management, through sufficient positive evidence,  believes it is more likely than not that all of the deferred tax asset will be realized. The amount of the deferred tax asset considered realizable, however, could be reduced in the near term if estimates of future taxable income or changes in the accrued expenses during the future periods are reduced.

At October 31, 2012, fiscal 2009 through 2012 are subject to examination by US federal and state tax authorities.  Through the issuance of these financial statements the outcome of all of these examinations has not been determined.