INCOME TAXES (Notes)

3 Months Ended

Jan. 31, 2022

Income Tax Disclosure [Abstract]

INCOME TAXES

INCOME TAXES

For the three months ended January 31, 2022, our income tax expense was $36 million with an effective tax rate of 11.3 percent. The income taxes for the three months ended January 31, 2022 include the excess tax benefits from stock-based compensation of $16 million. For the three months ended January 31, 2022, our effective tax rate and the resulting provision for income taxes were also impacted by the expiration of various foreign statutes of limitations which resulted in the recognition of previously unrecognized tax benefits of $8 million.

Our calculation of income tax expense for the three months ended January 31, 2022 is dependent in part on forecasts of full year results. The impact of the COVID-19 outbreak on the economic environment is uncertain and may change these forecasts, which could impact tax expense.

For the three months ended January 31, 2021, our income tax expense was $24 million with an effective tax rate of 7.7 percent. The income taxes for the three months ended January 31, 2021 include the excess tax benefits from stock-based compensation of $20 million. For the three months ended January 31, 2021, our effective tax rate and the resulting provision for income taxes were also impacted by the expiration of various foreign statutes of limitations which resulted in the recognition of previously unrecognized tax benefits of $16 million.

In the U.S., tax years remain open back to the year 2018 for federal income tax purposes and for significant states. In other major jurisdictions where the company conducts business, the tax years generally remain open back to the year 2012.

With these jurisdictions and the U.S., it is reasonably possible there could be significant changes to our unrecognized tax benefits in the next twelve months due to either the expiration of a statute of limitation or a tax audit settlement which will be partially offset by an anticipated tax liability related to unremitted foreign earnings, where applicable. Given the number of years and numerous matters that remain subject to examination in various tax jurisdictions, management is unable to estimate the range of possible changes to the balance of our unrecognized tax benefits.