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Income Taxes | 3 Months Ended
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Jan. 31, 2019
Components of Income Tax Expense (Benefit), Continuing Operations [Abstract] |
Income Taxes | Income Taxes Recent Tax Legislation The 2017 Act was enacted into law on December 22, 2017 and significantly changes existing U.S. tax law. The 2017 Act adopts a territorial tax system, imposes a mandatory one-time transition tax on earnings of foreign subsidiaries that were previously indefinitely reinvested, and reduces the U.S. federal statutory tax rate from 35% to 21%. For first quarter of fiscal 2019, the Company has utilized the enacted U.S. federal statutory tax rate of 21%. The 2017 Act includes several provisions that are effective for our fiscal 2019: (i) tax on global intangible low-taxed income (GILTI) of foreign subsidiaries, (ii) tax on certain payments between a U.S. corporation and its foreign subsidiaries referred to as the base erosion and anti-abuse tax (BEAT), (iii) limitation on the tax deduction for interest payments, and (iv) expanded limitation on the tax deduction for compensation paid to certain executives. The 2017 Act was effective in the first quarter of fiscal 2018. As of January 31, 2019, we have completed our accounting for the tax effects of the enactment of the 2017 Act and recorded a final adjustment to our provisional tax expense pursuant to SAB 118. During the first quarter of fiscal 2019, we recorded tax benefit of $4.4 million in our financial statements to finalize the tax effects of the 2017 Act. The Company is no longer asserting that earnings from our foreign subsidiaries are indefinitely reinvested. The 2017 Act imposes a new tax on foreign earnings and profits in excess of a deemed return on tangible assets of foreign subsidiaries referred to as GILTI which is effective in fiscal 2019. In accordance with FASB Staff Q&A, Topic 740, No. 5, Accounting for Global Intangible Low-Taxed Income, the Company is making an accounting policy election to recognize the tax expense related to GILTI in the year the tax is incurred. Effective Tax Rate The Company's effective tax rates were a benefit of 10.0% and expense of 263.7% for the first quarters of fiscal 2019 and fiscal 2018, respectively. The decrease in our effective tax rate for the first quarter of fiscal 2019 compared to the first quarter of fiscal 2018 was primarily due to the provisional charge of $202.0 million relating to the 2017 Act that was recorded in the first quarter of fiscal 2018. Our effective tax rate for the first quarter of fiscal 2019 was lower than the U.S. statutory rate because of discrete tax benefits which were partially offset by a less favorable mix of income from our foreign jurisdictions with lower tax rates. Total discrete tax benefits for the first quarter of fiscal 2019 were $18.7 million primarily relating to settlement of tax audits, revisions to the provisional tax charges relating to the 2017 Act, and excess tax benefits from share-based compensation. Our effective tax rate for the first quarter of fiscal 2018 was higher than the U.S. statutory rate because of the discrete tax expense relating to the 2017 Act, which was partially offset by a favorable mix of income from our foreign jurisdictions with lower tax rates and an excess tax benefit from share-based compensation. We recognize the benefit from a tax position only if it is more likely than not that the position would be sustained upon audit based solely on the technical merits of the tax position. As of January 31, 2019, and October 31, 2018, Cooper had unrecognized tax benefits of $47.1 million and $68.9 million, respectively. The decrease is primarily related to settling prior year tax audits, partially offset by additions to current period transfer pricing reserves. It is our policy to recognize interest and penalties directly related to income taxes as additional income tax expense. It is reasonably possible that $3.1 million of unrecognized tax benefits could be settled during the next twelve months. The Company is subject to U.S. Federal income tax examinations for fiscal 2015 through 2018 and the Internal Revenue Service is currently auditing our U.S. Consolidated Corporation Income Tax Returns for fiscal 2015 and 2016. The Company remains subject to income tax examinations in other significant tax jurisdictions including the United Kingdom, Japan, France and Australia for the tax years 2015 through 2018.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
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