Income Taxes

9 Months Ended

Oct. 31, 2019

Income Tax Disclosure [Abstract]

Income Taxes

INCOME TAXES

The effective income tax rate for the three months ended October 31, 2019 was 25.4% versus 17.1% in the prior year. The effective income tax rate for the nine months ended October 31, 2019 was 21.3% versus 21.6% in the prior year.

The effective income tax rate for the three and nine months ended October 31, 2019 was increased by an income tax expense of $5.8 million, or 550 basis points and 130 basis points, respectively, due to a reduction in the estimated Foreign Derived Intangible Income ("FDII") benefit for fiscal 2019. The effective income tax rate for the nine months ended October 31, 2019 also included the recognition of an income tax benefit of $7.5 million, or 170 basis points, related to an increase in the estimated fiscal 2018 FDII benefit as a result of new U.S. Treasury guidance issued during the three months ended April 30, 2019. The effective income tax rate for the three and nine months ended October 31, 2018 was reduced by 380 basis points and 90 basis points, respectively, as a result of the true-up of $4.4 million of the Company's prior year tax provision in conjunction with the filing of the 2017 tax returns. The effective income tax rate for the nine months ended October 31, 2018 was also reduced by 160 basis points due to the recognition of an income tax benefit of $8.0 million primarily as a result of a decrease in the gross amount of unrecognized tax benefits and accrued interest and penalties related thereto due to a lapse in a statute of limitations.

During the three and nine months ended October 31, 2019, the change in the gross amount of unrecognized tax benefits and accrued interest and penalties was not significant.

The Company conducts business globally and, as a result, is subject to taxation in the U.S. and various state and foreign jurisdictions. As a matter of course, tax authorities regularly audit the Company. The Company's tax filings are currently being examined by a number of tax authorities, both in the U.S. and in foreign jurisdictions. Ongoing audits where subsidiaries have a material presence include New York City (tax years 2011-2014) and New York State (tax years 2012-2018). Tax years from 2010-present are open to examination in the U.S. Federal jurisdiction and 2006-present are open in various state, local and foreign jurisdictions. As part of these audits, the Company engages in discussions with taxing authorities regarding

tax positions. As of October 31, 2019, unrecognized tax benefits are not expected to change significantly in the next 12 months. Future developments may result in a change in this assessment.