Income Taxes

9 Months Ended

Jul. 31, 2021

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The Company's effective tax rates for the three months ended July 31, 2021 and July 31, 2020 were (554.9)% and 16.9%, respectively. The decrease was primarily due to a $534.9 million tax benefit related to the remeasurement of deferred tax assets caused by the UK enactment of a 25% corporate tax rate to be effective in fiscal 2023 and is primarily related to deferred tax assets recognized from intra-group intangible asset transfers. The Company’s effective tax rate also decreased due to changes in unrecognized tax benefits, excess tax benefits from share-based compensation, and changes in the geographical composition of pre-tax earnings. The Company's effective tax rate for the third quarter of fiscal 2021 was lower than the U.S. federal statutory tax rate primarily due to the remeasurement of deferred tax assets, pre-tax earnings in foreign jurisdictions with lower tax rates, changes in unrecognized tax benefits, and excess tax benefits from share-based compensation.

The Company's effective tax rates for the nine months ended July 31, 2021 and July 31, 2020 were (666.3)% and 9.0%, respectively. The decrease was primarily due to an intra-group transfer of intellectual property, as discussed below, and remeasurement of the related deferred tax assets caused by the UK enactment of a 25% corporate tax rate. The Company’s effective tax rate otherwise increased due to changes in the geographical composition of pre-tax earnings, partially offset by changes in unrecognized tax benefits and excess tax benefits from share-based compensation. The Company's effective tax rate for the nine months ended July 31, 2021 was lower than the U.S. federal statutory tax rate primarily due to the intra-group transfer, the remeasurement of deferred tax assets, earnings in foreign jurisdictions with lower tax rates, changes in unrecognized tax benefits, and excess tax benefits from share-based compensation.

In November 2020, the Company completed an intra-group transfer of certain intellectual property and related assets to a UK subsidiary as part of a group restructuring to establish headquarters operations in the UK. Income before income taxes resulting from this transfer is eliminated upon consolidation. The transfer resulted in a step-up of the UK tax-deductible basis in the intellectual property and goodwill, creating a temporary difference between the book basis and the tax basis of

these assets. As a result, the Company recognized a deferred tax asset of $1,987.9 million, with a corresponding income tax benefit, during the three months ended January 31, 2021.