XML 32 R19.htm IDEA: XBRL DOCUMENT v3.7.0.1
Income Taxes
6 Months Ended
Apr. 30, 2017
Income Tax Disclosure [Abstract]  
Income Taxes
Income Taxes
Applied’s effective tax rates for the second quarters of fiscal 2017 and 2016 were 9.3 percent and 19.0 percent, respectively. Applied’s effective tax rates for the first half of fiscal 2017 and 2016 were 9.1 percent and 14.5 percent, respectively.
The effective tax rate for the second quarter of fiscal 2017 was lower than in the same period in the prior year primarily due to unfavorable resolutions and changes related to income tax liabilities for uncertain tax positions during the second quarter of fiscal 2016 and changes in the geographical composition of income.
The effective tax rate for the first half of fiscal 2017 was lower than in the same period in the prior year primarily due to unfavorable resolutions and changes related to income tax liabilities for uncertain tax positions during the second quarter of fiscal 2016, favorable resolutions and changes related to income tax liabilities for uncertain tax positions during the first quarter of fiscal 2017, and changes in the geographical composition of income partially offset by the reinstatement of the U.S. R&D tax credit during the first quarter of fiscal 2016 which was retroactive to its expiration in December of the prior year.
During the next twelve months, it is reasonably possible that existing liabilities for unrecognized tax benefits could be reduced by approximately $27 million as a result of negotiations with taxing authorities and the expiration of statutes of limitation.