XML 33 R18.htm IDEA: XBRL DOCUMENT
v3.22.4

Income Taxes | 12 Months Ended
--- | ---
Oct. 31, 2022
Income Tax Disclosure [Abstract] |
Income Taxes |
8 | Income Taxes
Earnings Before Income Taxes Earnings before income taxes were as follows (in thousands):
Fiscal Years Ended October 31 |  | 2022 |  | 2021 |  | 2020
Earnings before income taxes: |  |  |  |  |  |
United States |  | $ | 491,318 |  |  | $ | 446,256 |  |  | $ | 369,016 |
Foreign |  | 61,228 |  |  | 53,562 |  |  | 38,054 |
Total earnings before income taxes |  | $ | 552,546 |  |  | $ | 499,818 |  |  | $ | 407,070 |
Reconciliation of Effective Tax Rate A reconciliation of the statutory federal income tax rate to the company's effective tax rate is summarized as follows:
Fiscal Years Ended October 31 |  | 2022 |  | 2021 |  | 2020
Statutory federal income tax rate |  | 21.0 | % |  | 21.0 | % |  | 21.0 | %
Excess deduction for stock-based compensation |  | (0.4) |  |  | (1.5) |  |  | (1.7) |
State and local income taxes, net of federal benefit |  | 2.0 |  |  | 1.4 |  |  | 2.4 |
Foreign operations |  | (0.7) |  |  | (0.5) |  |  | (0.6) |
Federal research tax credit |  | (1.3) |  |  | (1.4) |  |  | (1.7) |
Foreign-derived intangible income |  | (0.7) |  |  | (0.9) |  |  | — |
Other, net |  | (0.1) |  |  | (0.1) |  |  | (0.4) |
Effective tax rate |  | 19.8 | % |  | 18.0 | % |  | 19.0 | %
The Coronavirus Aid, Relief, and Economic Security Act ("CARES Act") was signed into law on March 27, 2020 and allowed for delayed payment of employer payroll taxes, among other items. The company has reflected the impact of the CARES Act for the fiscal years ended October 31, 2022 and 2021 within its Consolidated Financial Statements and such impact was not material to the company's Consolidated Financial Statements. The Inflation Reduction Act ("IRA") was signed into law on August 16, 2022. Among other provisions, the IRA includes a 15% corporate minimum tax applied to large corporations, a 1% excise tax on corporate stock repurchases made after December 31, 2022 and various energy tax credits. There are no material impacts from the IRA within the Consolidated Financial Statements for the fiscal year ended October 31, 2022. Provision for Income Taxes Components of the company's provision for income taxes were as follows (in thousands):
Fiscal Years Ended October 31 |  | 2022 |  | 2021 |  | 2020
Current provision: |  |  |  |  |  |
Federal |  | $ | 94,658 |  |  | $ | 90,222 |  |  | $ | 58,243 |
State |  | 19,061 |  |  | 15,973 |  |  | 11,322 |
Foreign |  | 7,749 |  |  | 9,163 |  |  | 5,534 |
Total current provision |  | $ | 121,468 |  |  | $ | 115,358 |  |  | $ | 75,099 |
Deferred (benefit) provision: |  |  |  |  |  |
Federal |  | $ | (7,360) |  |  | $ | (18,361) |  |  | $ | 1,710 |
State |  | (4,894) |  |  | (6,486) |  |  | 634 |
Foreign |  | (10) |  |  | (573) |  |  | (74) |
Total deferred (benefit) provision |  | (12,264) |  |  | (25,420) |  |  | 2,270 |
Total provision for income taxes |  | $ | 109,204 |  |  | $ | 89,938 |  |  | $ | 77,369 |
Deferred Income Taxes The components of the company's deferred income tax assets and liabilities were as follows (in thousands):
Fiscal Years Ended October 31 |  | 2022 |  | 2021
Deferred income tax assets: |  |  |  |
Compensation and benefits |  | $ | 32,937 |  |  | $ | 34,403 |
Warranty and insurance |  | 35,384 |  |  | 30,840 |
Lease liabilities |  | 20,165 |  |  | 17,735 |
Advertising and sales promotions and incentives |  | 7,153 |  |  | 6,669 |
Inventory |  | 36,410 |  |  | 21,118 |
Deferred revenue (1) |  | 3,316 |  |  | 3,134 |
Other (1) |  | — |  |  | 6,221 |
Net operating losses and other carryforwards (1) |  | 6,442 |  |  | 5,397 |
Valuation allowance |  | (3,214) |  |  | (3,205) |
Deferred income tax assets |  | $ | 138,593 |  |  | $ | 122,312 |
Deferred income tax liabilities: |  |  |  |
Right-of-use assets |  | $ | (19,520) |  |  | $ | (17,071) |
Depreciation |  | (51,861) |  |  | (47,551) |
Amortization |  | (102,424) |  |  | (102,287) |
Other (1) |  | (3,750) |  |  | — |
Deferred income tax liabilities |  | (177,555) |  |  | (166,909) |
Deferred income tax liabilities, net |  | $ | (38,962) |  |  | $ | (44,597) |
(1) Presentation of fiscal 2021 deferred income taxes has been conformed to the current year presentation. There was no change to total deferred income tax assets, deferred income tax liabilities, or deferred income tax liabilities, net. As of October 31, 2022, the company has domestic net operating loss carryforwards of $6.1 million for both federal and state income tax purposes; $6.0 million that does not expire and $0.1 million that expires in fiscal 2037. As of October 31, 2022, the company has net operating loss carryforwards of approximately $3.4 million in foreign jurisdictions, which are comprised of $2.5 million that do not expire and $0.9 million that expires between fiscal 2026 and fiscal 2039. The company also has domestic credit carryforwards of $2.3 million that expire between fiscal 2027 and fiscal 2043. The net change in the total valuation allowance between the fiscal years ended October 31, 2022 and 2021 was an increase of less than $0.1 million. The change in valuation allowance is related to domestic tax credits, capital loss carryforwards, and net operating losses that are expected to expire prior to utilization. The company expects that $36.3 million of the total undistributed earnings of its foreign operations will be indefinitely reinvested. Should these earnings be distributed in the future in the form of dividends or otherwise, the company may be subject to foreign withholding taxes, state income taxes, and/or additional federal taxes for currency fluctuations. As of October 31, 2022, the unrecognized deferred tax liabilities for temporary differences related to the company’s investment in non-U.S. subsidiaries, and any withholding, state, or additional federal taxes that may be applied upon any future repatriation, are expected to be immaterial. Unrecognized Tax Benefits A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands):
Unrecognized tax benefits as of October 31, 2021 |  | $ | 3,113 |
Increase as a result of tax positions taken during a prior period |  | 2 |
Decrease as a result of tax positions taken during a prior period |  | (30) |
Increase as a result of tax positions taken during the current period |  | 539 |
Reductions as a result of statute of limitations lapses |  | (276) |
Unrecognized tax benefits as of October 31, 2022 |  | $ | 3,348 |
The company recognizes interest and penalties related to unrecognized tax benefits as a component of the provision for income taxes within the Consolidated Statements of Earnings. In addition to the unrecognized tax benefits of $3.3 million, which have been recorded as an other accrued liability within the Consolidated Balance Sheets as of October 31, 2022, the company recorded $1.0 million of accrued interest and penalties as an other accrued liability within the Consolidated Balance Sheets as of October 31, 2022. Included in the balance of unrecognized tax benefits as of October 31, 2022 are potential benefits of $3.5 million that, if recognized, would affect the effective tax rate. The company and its wholly owned 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 foreign income tax examinations by tax authorities for taxable years before fiscal 2018. The company is under audit in certain state jurisdictions and expects various statutes of limitation to expire during the next 12 months. Due to the uncertainty related to the response of taxing authorities, a range of outcomes cannot be reasonably estimated at this time.

X
- References No definition available. + Details
Name: | us-gaap_IncomeTaxDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- 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/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI https://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI https://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI https://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration