A reconciliation of income before income taxes for domestic and foreign locations for the years ended October 31, 2017, 2016 and 2015 are as follows (in thousands):
| | | 2017 | | 2016 | | 2015 | |
| United States | | $ | 11,386 | | $ | 13,285 | | $ | 11,255 | |
| Foreign | | | (760) | | | 40 | | | (199) | |
| Income before income taxes | | $ | 10,626 | | $ | 13,325 | | $ | 11,056 | |
The components of the provisions for income taxes for fiscal years 2017, 2016 and 2015 are as follows (in thousands):
| | | 2017 | | 2016 | | 2015 | |
| Current: | | | | | | | | | | |
| Federal | | $ | (1,217) | | $ | 1,736 | | $ | (3,315) | |
| State | | | (527) | | | (749) | | | (1,007) | |
| Foreign | | | (41) | | | (59) | | | (2) | |
| Total current (provision) benefit | | | (1,785) | | | 928 | | | (4,324) | |
| | | | | | | | | | | |
| Deferred: | | | | | | | | | | |
| Federal | | | (2,282) | | | (5,942) | | | 343 | |
| State | | | (238) | | | (253) | | | 7 | |
| Foreign | | | 228 | | | - | | | - | |
| Total deferred (provision) benefit | | | (2,292) | | | (6,195) | | | 350 | |
| Total provision | | $ | (4,077) | | $ | (5,267) | | $ | (3,974) | |
The income tax provision differs from the amount which would result from the statutory federal income tax rate primarily as a result of dividend exclusions, the domestic production activities deduction and state income taxes.
Deferred income taxes reflect the net of temporary differences between the carrying amount of the assets and liabilities for financial reporting and income tax purposes. The components of deferred income tax assets (liabilities) at October 31, 2017 and 2016 are as follows (in thousands):
| | | 2017 | | 2016 | |
| Deferred income tax assets: | | | | | | | |
| Labor accruals | | $ | 286 | | $ | 246 | |
| State income taxes | | | 191 | | | 293 | |
| Net operating losses | | | - | | | 1 | |
| Prepaid insurance and other | | | 442 | | | 69 | |
| Impairments of real estate development assets | | | 3,186 | | | 3,147 | |
| Derivative instruments | | | 105 | | | 452 | |
| Minimum pension liability adjustment | | | 1,512 | | | 2,207 | |
| Amortization | | | 360 | | | 462 | |
| Total deferred income tax assets | | | 6,082 | | | 6,877 | |
| Deferred income tax liabilities: | | | | | | | |
| Property taxes | | | (234) | | | (184) | |
| Depreciation | | | (15,114) | | | (11,644) | |
| Unrealized net gain on Calavo investment | | | (7,490) | | | (5,792) | |
| Book and tax basis difference of acquired assets | | | (14,444) | | | (14,471) | |
| Other | | | (215) | | | (114) | |
| Total deferred income tax liabilities | | | (37,497) | | | (32,205) | |
| Net deferred income tax liabilities | | $ | (31,415) | | $ | (25,328) | |
At October 31, 2017 and 2016, the Company had state net operating loss carry-forwards of approximately zero and $30,000, respectively.
The income tax provision differs from that computed using the federal statutory rate applied to income before taxes as follows for fiscal years 2017, 2016 and 2015 ($ in thousands):
| | | 2017 | | 2016 | | 2015 | |
| | | Amount | | % | | Amount | | % | | Amount | | % | |
| | | | | | | | | | | | | | | | | | | | |
| Provision at statutory rates | | $ | (3,613) | | | (34.0) | % | $ | (4,530) | | | (34.0) | % | $ | (3,757) | | | (34.0) | % |
| State income tax, net of federal benefit | | | (580) | | | (5.5) | % | | (733) | | | (5.5) | % | | (614) | | | (5.5) | % |
| Dividend exclusion | | | 67 | | | 0.6 | % | | 72 | | | 0.5 | % | | 94 | | | 0.8 | % |
| Production deduction | | | 148 | | | 1.4 | % | | 50 | | | 0.4 | % | | 495 | | | 4.5 | % |
| Other permanent items | | | (99) | | | (0.9) | % | | (126) | | | (0.9) | % | | (192) | | | (1.7) | % |
| Total income tax provision | | $ | (4,077) | | | (38.4) | % | $ | (5,267) | | | (39.5) | % | $ | (3,974) | | | (35.9) | % |
The Company recognizes excess tax deductions associated with the vesting of stock grants directly to stockholders’ equity when realized.
At October 31, 2017 and 2016, the Company had no unrecognized tax benefits. The Company reports accrued interest and penalties related to unrecognized tax benefits in income tax expense.
The Company files income tax returns in the U.S., California, Arizona and Chile. The Company is no longer subject to significant U.S. and state income tax examinations for years prior to the statutory periods of three years for federal and four years for state tax jurisdictions. The Company recognizes interest expense and penalties related to income tax matters as a component of income tax expense. There was no accrued interest or penalties associated with uncertain tax positions as of October 31, 2017.
On December 22, 2017, the Tax Cut and Jobs Act was signed into law, which enacts significant changes to U.S. tax and related laws. Some of the provisions of the new tax law affecting corporations include, but are not limited to a reduction of the federal corporate income tax rate from 35% to 21%, limiting the interest expense deduction, expensing of cost of acquired qualified property and elimination of the domestic production activities deduction. We are currently evaluating the impact the new tax law will have on our financial condition and results of operations. Preliminarily, we anticipate a significant reduction in our effective income tax rate and our net deferred federal income tax liabilities as a result of the income tax rate reduction, with such changes being included in our financial statements beginning in the three months ending January 31, 2018.