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Income Taxes | 12 Months Ended
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Oct. 31, 2015
Income Tax Disclosure [Abstract] |
Income Taxes | Note 8 — Income taxes Income tax expense includes the following:
|  | 2015 |  |  | 2014 |  |  | 2013 |
Current: |  |  |
U.S. federal |  | $ | 36,875 |  |  | $ | 52,985 |  |  | $ | 45,004 |
State and local |  |  | 1,623 |  |  |  | 1,900 |  |  |  | 2,351 |
Foreign |  |  | 49,153 |  |  |  | 47,366 |  |  |  | 36,829 |
Total current |  |  | 87,651 |  |  |  | 102,251 |  |  |  | 84,184 |
Deferred: |  |  |  |  |  |  |  |  |  |  |  |
U.S. federal |  |  | 4,950 |  |  |  | 8,695 |  |  |  | 8,361 |
State and local |  |  | 1,031 |  |  |  | (1,635 | ) |  |  | (991 | )
Foreign |  |  | (3,881 | ) |  |  | (3,571 | ) |  |  | (2,248 | )
Total deferred |  |  | 2,100 |  |  |  | 3,489 |  |  |  | 5,122 |
|  | $ | 89,751 |  |  | $ | 105,740 |  |  | $ | 89,306 |
Earnings before income taxes of domestic operations, which are calculated after intercompany profit eliminations, were $140,044, $184,894 and $164,702 in 2015, 2014 and 2013, respectively. On December 19, 2014, the Tax Increase Prevention Act of 2014 was enacted which retroactively reinstated the Federal Research and Development Tax Credit (Federal R&D Tax Credit) from January 1, 2014 to December 31, 2014 and extended certain other tax provisions. As a result, our income tax provision for 2015 included discrete tax benefits of $2,486 primarily related to 2014. Income tax expense in 2013 included a benefit of $900 for the reduction of unrecognized tax benefits primarily related to expiration of certain foreign statutes of limitations. On January 2, 2013, the American Taxpayer Relief Act of 2012 was enacted which retroactively reinstated and extended the Federal Research and Development Tax Credit (Federal R&D Tax Credit) from January 1, 2012 to December 31, 2013 and extended certain other tax provisions. As a result, our income tax provision for 2013 included a discrete tax benefit of $1,700 related to 2012. A reconciliation of the U.S. statutory federal rate to the worldwide consolidated effective tax rate follows:
|  | 2015 |  |  | 2014 |  |  | 2013 |  |
Statutory federal income tax rate |  |  | 35.00 |  | % |  | 35.00 |  | % |  | 35.00 |  | %
Domestic Production Deduction |  |  | (1.47 | ) |  |  | (1.74 | ) |  |  | (1.71 | ) |
Foreign tax rate variances, net of foreign tax credits |  |  | (3.25 | ) |  |  | (3.42 | ) |  |  | (3.39 | ) |
State and local taxes, net of federal income tax benefit |  |  | 0.43 |  |  |  | 0.05 |  |  |  | 0.28 |  |
Amounts related to prior years |  |  | (1.04 | ) |  |  | (0.24 | ) |  |  | (1.00 | ) |
Other – net |  |  | 0.16 |  |  |  | 0.35 |  |  |  | (0.48 | ) |
Effective tax rate |  |  | 29.83 |  | % |  | 30.00 |  | % |  | 28.70 |  | %
The Domestic Production Deduction, enacted by the American Jobs Creation Act of 2004, allows a deduction with respect to income from certain United States manufacturing activities. Earnings before income taxes of international operations, which are calculated before intercompany profit elimination entries, were $160,818, $167,619 and $146,421 in 2015, 2014 and 2013, respectively. Deferred income taxes are not provided on undistributed earnings of international subsidiaries that are intended to be permanently invested in their operations. These undistributed earnings represent the post-income tax earnings under U.S. GAAP not adjusted for previously taxed income which aggregated approximately $712,913 and $622,914 at October 31, 2015 and 2014, respectively. Should these earnings be distributed, applicable foreign tax credits, distributions of previously taxed income, and utilization of other attributes would substantially offset taxes due upon the distribution. It is not practical to estimate the amount of additional taxes that might be payable on such undistributed earnings. At October 31, 2015 and 2014, total unrecognized tax benefits were $6,258 and $5,812, respectively. The amounts that, if recognized, would impact the effective tax rate were $5,650 and $5,175 at October 31, 2015 and 2014, respectively. The unrecognized tax benefits relate primarily to foreign positions and, if recognized, a substantial portion of the gross unrecognized tax benefits would be offset against assets currently recorded in the Consolidated Balance Sheet. A reconciliation of the beginning and ending amount of unrecognized tax benefits for 2015, 2014 and 2013 is as follows:
|  | 2015 |  |  | 2014 |  |  | 2013 |
Balance at beginning of year |  | $ | 5,812 |  |  | $ | 5,717 |  |  | $ | 3,140 |
Additions based on tax positions related to the current year |  |  | 288 |  |  |  | 196 |  |  |  | 703 |
Additions for tax positions of prior years |  |  | 331 |  |  |  | 319 |  |  |  | 3,261 |
Reductions for tax positions of prior years |  |  | (28 | ) |  |  | — |  |  |  | (317 | )
Settlements |  |  | — |  |  |  | (110 | ) |  |  | — |
Lapse of statute of limitations |  |  | (145 | ) |  |  | (310 | ) |  |  | (1,070 | )
Balance at end of year |  | $ | 6,258 |  |  | $ | 5,812 |  |  | $ | 5,717 |
At October 31, 2015 and 2014, we had accrued interest and penalty expense related to unrecognized tax benefits of $2,664 and $2,025, respectively. We include interest accrued related to unrecognized tax benefits in interest expense. Penalties, if incurred, would be recognized as other income (expense). We are subject to United States Federal income tax as well as income taxes in numerous state and foreign jurisdictions. We are subject to examination in the U.S. by the Internal Revenue Service (IRS) for the 2012 through 2015 tax years; tax years prior to the 2012 year are closed to further examination by the IRS. Generally, major state and foreign jurisdiction tax years remain open to examination for tax years after 2009. Within the next twelve months, it is reasonably possible that certain statute of limitations periods would expire, which could result in a minimal decrease in our unrecognized tax benefits. Significant components of deferred tax assets and liabilities are as follows:
|  | 2015 |  |  | 2014 |
Deferred tax assets: |  |  |  |  |  |  |  |
Employee benefits |  | $ | 84,651 |  |  | $ | 79,669 |
Other accruals not currently deductible for taxes |  |  | 17,259 |  |  |  | 17,379 |
Tax credit and loss carryforwards |  |  | 9,242 |  |  |  | 16,531 |
Inventory adjustments |  |  | 6,591 |  |  |  | 5,276 |
Translation of foreign currency accounts |  |  | — |  |  |  | 154 |
Total deferred tax assets |  |  | 117,743 |  |  |  | 119,009 |
Valuation allowance |  |  | (6,768 | ) |  |  | (7,672 | )
Total deferred tax assets |  |  | 110,975 |  |  |  | 111,337 |
Deferred tax liabilities: |  |  |  |  |  |  |  |
Depreciation and amortization |  |  | 171,234 |  |  |  | 163,107 |
Other - net |  |  | 196 |  |  |  | - |
Total deferred tax liabilities |  |  | 171,430 |  |  |  | 163,107 |
Net deferred tax liabilities |  | $ | (60,455 | ) |  | $ | (51,770 | )
At October 31, 2015, we had $2,881 of tax credit carryforwards of which $135 will expire in 2016 through 2017, and $2,746 of which has an indefinite carryforward period. We also had $3,629 Federal, $70,298 state and $14,323 foreign operating loss carryforwards, of which $73,927 will expire in 2016 through 2035, and $14,323 of which has an indefinite carryforward period. The net change in the valuation allowance was a decrease of $904 in 2015 and an increase of $2,009 in 2014. The valuation allowance of $6,768 at October 31, 2015, related primarily to tax credits and loss carryforwards that may expire before being realized. We continue to assess the need for valuation allowances against deferred tax assets based on determinations of whether it is more likely than not that deferred tax benefits will be realized.

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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://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32559-109319 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32639-109319 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32537-109319 + Details
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