Income Taxes

12 Months Ended

Oct. 31, 2024

Income Tax Disclosure [Abstract]

Income Taxes

Note 6. Income Taxes

Components of income before income taxes:

Years Ended October 31, (In millions)	2024		2023		2022
Income before income taxes:
United States	$	(87.1)	$	(135.7)	$	31.4
Foreign	669.4		548.6		443.9
	$	582.3	$	412.9	$	475.3

Components of provision for income taxes:

Years Ended October 31, (In millions)	2024		2023		2022
Current:
Federal	$	38.2	$	37.3	$	10.2
State	1.3		3.7		3.8
Foreign	31.6		33.0		21.7
	71.1		74.0		35.7
Deferred:
Federal	(19.6)		(36.7)		10.5
State	0.5		(7.5)		(2.2)
Foreign	138.0		88.9		45.6
	118.9		44.7		53.9
Provision for income taxes	$	190.0	$	118.7	$	89.5

Reconciliation between the expected provision for income taxes at the U.S. federal statutory rate and the provision for income taxes:

Years Ended October 31, (In millions)	2024		2023		2022
Provision for income taxes at United States statutory tax rate	$	122.3	$	86.7	$	99.8
(Decrease) increase in taxes resulting from:
Foreign earnings in jurisdictions with different tax rates	27.8		7.0		(22.3)
Foreign earnings subject to United States tax	45.5		34.3		21.1
Excess tax benefits from share-based compensation	(5.1)		(2.4)		(2.6)
Change in unrecognized tax benefits	0.6		—		(12.7)
State tax provision	1.2		(4.2)		5.0
Other, net	(2.3)		(2.7)		1.2
Provision for income taxes	$	190.0	$	118.7	$	89.5

Components of deferred tax assets and liabilities:

Years Ended October 31, (In millions)	2024		2023
Deferred tax assets:
Inventory	$	43.0	$	40.0
Employee compensation and benefits	34.2		31.9
Lease liabilities	43.0		37.5
Accrued liabilities	89.4		83.9
Net operating loss carryforwards	229.6		206.4
Foreign goodwill	1,129.5		1,249.5
Foreign intangible assets	817.9		857.6
Other deferred tax assets	59.5		48.2
Total gross deferred tax assets	2,446.1		2,555.0
Less: valuation allowance	(23.3)		(20.7)
Deferred tax assets	2,422.8		2,534.3
Deferred tax liabilities:
Property, plant and equipment	(51.7)		(41.3)
Right of use assets	(40.6)		(34.8)
U.S. goodwill	(44.5)		(34.7)
U.S. intangible assets	(130.4)		(121.3)
Other deferred tax liabilities	(41.3)		(54.0)
Total gross deferred tax liabilities	(308.5)		(286.1)
Net deferred tax assets	$	2,114.3	$	2,248.2

The Company has revised the presentation of the components of deferred tax assets and liabilities to disclose the amounts by type of asset or liability. The amounts for fiscal 2023 were revised to reflect the presentation for fiscal 2024. The revised table has no impact on the affected financial statement line items for the years affected or on any other tables.

Changes in valuation allowance:

Years Ended October 31, (In millions)	2024		2023		2022
Beginning balance	$	20.7	$	60.1	$	51.8
Increases	2.8		2.6		13.3
Decreases	(0.2)		(42.0)		(5.0)
Ending balance	23.3		$	20.7	$	60.1

In assessing the realizability of deferred tax assets, the Company analyzes whether some or all deferred tax assets will not be realized. This analysis considers historical taxable income, the projected reversal of deferred tax liabilities, projected taxable income and tax planning strategies. Based upon this analysis, it is more likely than not that the deferred tax assets, net of valuation allowance, will be realized.

At October 31, 2024, the Company had federal net operating loss carryforwards of $74.0 million and state net operating loss carryforwards of $85.0 million. Federal net operating loss carryforwards of $24.2 million expire on various dates from fiscal 2026 through fiscal 2038 and $49.8 million do not expire. The state net operating loss carryforwards expire on various dates from fiscal 2025 through fiscal 2044.

The remaining transition tax to be remitted from the U.S. Tax Cuts and Jobs Act of 2017 is $66.4 million and $36.9 million as of October 31, 2024, and October 31, 2025, respectively.

A tax benefit is recognized if it is more likely than not that a tax position will be sustained on its technical merits, based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority.

Changes in unrecognized tax benefits:

(In millions)
Balance at October 31, 2022	$	336.9
Decrease based on tax positions in prior fiscal years	(0.5)
Increase based on tax positions in current fiscal year	2.0
Lapses of statutes of limitations	(6.9)
Balance at October 31, 2023	$	331.5
Decrease based on tax positions in prior fiscal years	(2.0)
Increase based on tax positions in prior fiscal years	2.2
Increase based on tax positions in current fiscal year	1.0
Lapses of statutes of limitations	(5.9)
Balance at October 31, 2024	$	326.8

These tax benefits, if recognized, would reduce provision for income taxes for fiscal 2024, 2023 and 2022, by $323.7 million, $323.2 million, and $324.3 million, respectively. Interest and penalties related to unrecognized tax benefits are recognized in provision for income taxes. At October 31, 2024, 2023 and 2022, accrued interest and penalties related to unrecognized tax benefits were $10.7 million, $5.8 million, and $5.4 million, respectively.

Included in the balance of unrecognized tax benefits at October 31, 2024, is $15.7 million related to tax positions for which it is reasonably possible that the total amounts could change during the next twelve months.

Filed tax returns are subject to examination by tax authorities in major tax jurisdictions for fiscal 2018 and subsequent years, including the UK and the US.