XML 100 R13.htm IDEA: XBRL DOCUMENT

INCOME TAXES	3 Months Ended
INCOME TAXES	Jan. 31, 2020
Income Tax Disclosure [Abstract]
INCOME TAXES	INCOME TAXES The company’s effective tax rate was 19.1 percent and 5.2 percent for the three months ended January 31, 2020 and 2019, respectively. The income tax expense was $39 million and $6 million for the three months ended January 31, 2020 and 2019, respectively. The income tax expense for the three months ended January 31, 2020 included a net discrete expense of $3 million. The income tax expense for the three months ended January 31, 2019 included a net discrete benefit of $23 million, primarily related to a change in tax reserves resulting from a change in judgment. Keysight benefits from tax incentives in several jurisdictions, most significantly in Singapore, that have granted us tax incentives that require renewal at various times in the future. The tax incentives provide lower rates of taxation on certain classes of income and require thresholds of investments and employment or specific types of income in those jurisdictions. The impact of the tax incentives decreased the income tax provision by $15 million and $8 million for the three months ended January 31, 2020 and 2019, respectively, resulting in a benefit to net income per share (diluted) of approximately$0.08 and $0.04 for the three months ended January 31, 2020 and 2019, respectively. The majority of our tax incentives are due for renewal between 2024 and 2025. With regard to the incentive in Malaysia, a formal application must be filed during fiscal year 2020 to renew the tax incentive through 2025. Keysight intends to file the application timely and does not anticipate any impediments to the renewal process. The open tax years for the IRS and most states are from November 1, 2015 through the current tax year. For the majority of our foreign entities, the open tax years are from November 1, 2014 through the current tax year. For certain foreign entities, the tax years remain open, at most, back to the year 2008. Given the number of years and numerous matters that remain subject to examination in various tax jurisdictions, we are unable to estimate the range of possible changes to the balance of our unrecognized tax benefits. The company was audited in Malaysia for the 2008 tax year. Although this tax year pre-dates our separation from Agilent, pursuant to the agreement between Agilent and Keysight pertaining to tax matters, as finalized at the time of separation, for certain entities, including Malaysia, any historical tax liability is the responsibility of Keysight. In the fourth quarter of fiscal 2017, Keysight paid income taxes and penalties of $68 million on gains related to intellectual property rights. We are currently in the process of appealing to the Special Commissioners of Income Tax (“SCIT”) in Malaysia. A decision from SCIT is expected during fiscal year 2020. The company believes there are numerous defenses to the current assessment; the statute of limitations for the 2008 tax year in Malaysia was closed, and the income in question is exempt from tax in Malaysia. The company is pursuing all avenues to resolve this issue favorably for the company.