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INCOME TAXES | 12 Months Ended
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Oct. 31, 2016
INCOME TAXES |
INCOME TAXES |
9 |  | INCOME TAXES
Earnings before income taxes were as follows:
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Fiscal years ended October 31 |  |  | 2016 |  |  | 2015 |  |  | 2014 |
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Earnings before income taxes: |  |  |  |  |  |  |  |  |  |
U.S. |  | $ | 292,184 |  | $ | 254,276 |  | $ | 239,501 |
Non-U.S. |  |  | 38,276 |  |  | 36,755 |  |  | 16,944 |
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Total |  | $ | 330,460 |  | $ | 291,031 |  | $ | 256,445 |
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A reconciliation of the statutory federal income tax rate to the company's consolidated effective tax rate is summarized as follows:
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Fiscal years ended October 31 |  |  | 2016 |  |  | 2015 |  |  | 2014 |
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Statutory federal income tax rate |  | ​ | 35.0% |  | ​ | 35.0% |  | ​ | 35.0% |
Domestic manufacturer's deduction |  |  | (0.8) |  |  | (1.7) |  |  | (1.9) |
State and local income taxes, net of federal benefit |  | ​ | 1.5 |  | ​ | 2.2 |  | ​ | 1.5 |
Non-U.S. taxes |  |  | (1.8) |  |  | (3.1) |  |  | (1.2) |
Federal research tax credit |  | ​ | (1.5) |  | ​ | (0.9) |  | ​ | (0.2) |
Other, net |  |  | (2.3) |  |  | (0.8) |  |  | (1.0) |
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Consolidated effective tax rate |  | ​ | 30.1% |  | ​ | 30.7% |  | ​ | 32.2% |
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Components of the provision for income taxes were as follows:
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Fiscal years ended October 31 |  |  | 2016 |  |  | 2015 |  |  | 2014 |
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Provision for income taxes: |  | ​ |  |  | ​ |  |  | ​ |  |
Current: |  |  |  |  |  |  |  |  |  |
Federal |  | $ | 77,685 |  | $ | 75,496 |  | $ | 75,815 |
State |  |  | 6,929 |  |  | 9,389 |  |  | 5,997 |
Non-U.S. |  | ​ | 6,295 |  | ​ | 6,219 |  | ​ | 3,672 |
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Current provision |  | $ | 90,909 |  | $ | 91,104 |  | $ | 85,484 |
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Deferred: |  | ​ |  |  | ​ |  |  | ​ |  |
Federal |  | $ | 7,283 |  | $ | 430 |  | $ | (3,047) |
State |  | ​ | 297 |  | ​ | — |  | ​ | (81) |
Non-U.S. |  |  | 977 |  |  | (2,094) |  |  | 219 |
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Deferred benefit |  | ​ | 8,557 |  | ​ | (1,664) |  | ​ | (2,909) |
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Total provision for income taxes |  | $ | 99,466 |  | $ | 89,440 |  | $ | 82,575 |
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The tax effects of temporary differences that give rise to the net deferred income tax assets are presented below:
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October 31 |  |  | 2016 |  |  | 2015 |
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Deferred tax assets (liabilities): |  | ​ |  |  | ​ |  |
Compensation and benefits |  | $ | 37,200 |  | $ | 41,341 |
Warranty and insurance |  | ​ | 17,443 |  | ​ | 12,067 |
Advertising and sales allowance |  |  | 11,185 |  |  | 10,474 |
Depreciation |  | ​ | (13,578) |  | ​ | (7,689) |
Other |  |  | 6,845 |  |  | 12,264 |
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Deferred tax assets |  | $ | 59,095 |  | $ | 68,457 |
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Valuation allowance |  |  | (1,867) |  |  | (1,801) |
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Net deferred tax assets |  | $ | 57,228 |  | $ | 66,656 |
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The valuation allowance as of October 31, 2016 and 2015 principally applies to capital loss carryforwards and foreign net operating loss carryforwards that are expected to expire prior to utilization. In fiscal 2016, the valuation allowance increased slightly for certain foreign jurisdictions with existing valuation allowances. As of October 31, 2016, the company had net operating loss carryforwards of approximately $8,068 in foreign jurisdictions. The carryforward periods are as follows: $4,858 that do not expire; and $3,210 that expire between fiscal years 2017 and 2022. No provision has been made for U.S. federal income taxes on certain undistributed earnings of foreign subsidiaries the company intends to permanently invest or that may be remitted substantially tax-free. The total of undistributed earnings that would be subject to federal income tax if remitted under existing law is approximately $117,866 as of October 31, 2016. Determination of the unrecognized deferred tax liability related to these earnings is not practicable because of the complexities with its hypothetical calculation. Upon distribution of these earnings, the company will be subject to U.S. taxes and withholding taxes payable to various foreign governments. A credit for foreign taxes already paid would be available to reduce the U.S. tax liability. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
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Balance as of October 31, 2015 |  | $ | 6,343 |
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Increase as a result of tax positions taken during a prior period |  |  | 683 |
Increase as a result of tax positions taken during the current period |  | ​ | 453 |
Decrease relating to settlements with taxing authorities |  |  | (1,666) |
Reductions as a result of statute of limitations lapses |  | ​ | (638) |
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Balance as of October 31, 2016 |  | $ | 5,175 |
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The company recognizes interest and penalties related to unrecognized tax benefits as a component of the provision for income taxes. In addition to the liability of $5,175 for unrecognized tax benefits as of October 31, 2016 was an amount of approximately $1,850 for accrued interest and penalties. Included in the balance of unrecognized tax benefits as of October 31, 2016 are potential benefits of $5,089 that, if recognized, would affect the effective tax rate from continuing operations. The company and its subsidiaries file income tax returns in the U.S. federal jurisdiction, and numerous state and foreign jurisdictions. With few exceptions, the company is no longer subject to U.S. federal, state and local, and non-U.S. income tax examinations by tax authorities for taxable years before fiscal 2012. The company is under audit in several state jurisdictions, and expects various statutes of limitation to expire during the next 12 months. Due to the uncertain response of taxing authorities, a range of outcomes cannot be reasonably estimated at this time.

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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=65882285&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=65882285&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=65882285&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=65882285&loc=d3e32537-109319 + Details
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