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Income Taxes | 12 Months Ended
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Oct. 31, 2016
Income Tax Disclosure [Abstract] |
Income Taxes | INCOME TAXES The Company files income tax returns in the U.S. federal jurisdiction, various U.S. state and local jurisdictions, and various non-U.S. jurisdictions. The provision for income taxes consists of the following (Dollars in millions):
For the years ended October 31, | 2016 |  | 2015 |  | 2014
Current |  |  |  |  |
Federal | $ | 20.3 |  |  | $ | 18.3 |  |  | $ | 53.1 |
State and local | 4.4 |  |  | 4.0 |  |  | 9.8 |
Non-U.S. | 40.3 |  |  | 29.6 |  |  | 38.0 |
| 65.0 |  |  | 51.9 |  |  | 100.9 |
Deferred |  |  |  |  |
Federal | 0.5 |  |  | 2.4 |  |  | 2.7 |
State and local | 0.5 |  |  | 0.2 |  |  | (1.6 | )
Non-U.S. | 0.5 |  |  | (6.1 | ) |  | 13.0 |
| 1.5 |  |  | (3.5 | ) |  | 14.1 |
| $ | 66.5 |  |  | $ | 48.4 |  |  | $ | 115.0 |
The non-U.S. income (loss) before income tax expense was $49.9 million, $44.8 million and $(17.0) million in 2016, 2015, and 2014, respectively. The 2014 non-U.S. pretax loss is primarily the result of the impairment of non-deductible goodwill. The U.S. income before income tax was $91.3 million, $70.0 million and $175.0 million in 2016, 2015, and 2014, respectively. The following is a reconciliation of the provision for income taxes based on the federal statutory rate to the Company’s effective income tax rate:
For the years ended October 31, | 2016 |  | 2015 |  | 2014
Federal statutory rate | 35.00 | % |  | 35.00 | % |  | 35.00 | %
Impact of foreign tax rate differential | (11.15 | )% |  | (10.10 | )% |  | (2.40 | )%
State and local taxes, net of federal tax benefit | 2.19 | % |  | 2.80 | % |  | 4.20 | %
Net impact of changes in valuation allowances | 1.91 | % |  | 3.00 | % |  | 12.70 | %
Venezuela balance sheet remeasurement | — | % |  | 5.90 | % |  | — | %
Non-deductible write-off and impairment of goodwill and other intangible assets | 7.37 | % |  | 2.50 | % |  | 15.60 | %
Unrecognized tax benefits | 4.84 | % |  | 2.50 | % |  | 7.20 | %
Permanent book-tax differences | (4.78 | )% |  | (0.50 | )% |  | (3.10 | )%
Withholding taxes | 4.64 | % |  | 2.70 | % |  | 2.90 | %
Other items, net | 7.08 | % |  | (1.60 | )% |  | 0.70 | %
| 47.10 | % |  | 42.20 | % |  | 72.80 | %
The primary items which increased the Company’s effective income tax rate from the federal statutory rate in 2016 were non-deductible expenses, such as the write-off of goodwill allocated to divestitures and impairments, withholding taxes, unrecognized tax benefits, state and local taxes, net of federal tax benefit, the net impact of changes in valuation allowances due to changes in circumstances in several legal entities and other tax items. Cumulatively, these items impacted the 2016 effective income tax rate by approximately 28.0 percent. This increase was offset by the impact of foreign tax rates and permanent book-tax differences, which decreased the effective income tax rate by approximately 15.9 percent in 2016. In both 2016 and 2015, the items that materially increased the effective income tax rate from the federal statutory rate were related to non-U.S. operations. As discussed in Note 1 herein, with respect to its operations in Venezuela, the Company changed from the official exchange rate to the SIMADI rate requiring remeasurement of the Venezuelan balance sheet during 2015. The net $19.4 million charge to the income statement had no tax benefit. This balance sheet remeasurement contributed 5.90 percent to our effective tax rate. During 2014, the Company disposed of certain operations, including the divestiture of a nonstrategic business in the Rigid Industrial Packaging & Services segment in third quarter and the multiwall packaging business in the fourth quarter, which resulted in gains and losses recognized, including an amount related to goodwill of $13.6 million and $21.8 million, respectively, which did not have a tax basis. Moreover, the Flexible Products & Services reporting unit recognized the impairment of goodwill of $50.3 million that did not have any tax basis. For 2014, the combination of these items contributed 15.6 percent to our effective tax rate. The components of the Company’s deferred tax assets and liabilities as of October 31 for the years indicated were as follows (Dollars in millions):
| 2016 |  | 2015
Deferred Tax Assets |  |  |
Net operating loss and other carryforwards | $ | 83.0 |  |  | $ | 80.8 |
Pension liabilities | 57.0 |  |  | 53.6 |
Insurance operations | 2.7 |  |  | 3.5 |
Incentive liabilities | 8.0 |  |  | 5.4 |
Environmental reserves | 1.3 |  |  | 0.4 |
Inventories | 7.8 |  |  | 6.5 |
State income taxes | 7.0 |  |  | 7.4 |
Postretirement benefit obligations | 3.1 |  |  | 3.5 |
Other | 9.1 |  |  | 11.3 |
Interest accrued | 1.2 |  |  | 1.6 |
Allowance for doubtful accounts | 1.9 |  |  | 3.4 |
Restructuring reserves | 1.1 |  |  | 6.0 |
Deferred compensation | 3.8 |  |  | 2.9 |
Foreign tax credits | 2.4 |  |  | 2.3 |
Vacation accruals | 1.5 |  |  | 1.5 |
Workers compensation accruals | 6.7 |  |  | 3.5 |
Total Deferred Tax Assets | 197.6 |  |  | 193.6 |
Valuation allowance | (92.1 | ) |  | (89.5 | )
Net Deferred Tax Assets | 105.5 |  |  | 104.1 |
Deferred Tax Liabilities |  |  |
Properties, plants and equipment | 86.5 |  |  | 84.7 |
Goodwill and other intangible assets | 80.4 |  |  | 80.1 |
Foreign income inclusion | 1.1 |  |  | 1.1 |
Foreign exchange gains | 5.7 |  |  | 6.1 |
Timberland transactions | 115.8 |  |  | 116.2 |
Total Deferred Tax Liabilities | 289.5 |  |  | 288.2 |
Net Deferred Tax Liability | $ | (184.0 | ) |  | $ | (184.1 | )
As of October 31, 2016, the Company had income tax benefits of $83.0 million from net operating loss carryforwards, almost all of which were related to non-US operations. The Company has recorded valuation allowances $89.9 million and $87.2 million against non-US deferred tax assets as of October 31, 2016 and 2015 respectively. The Company has also recorded valuation allowances of $2.3 million, as of October 31, 2016 and 2015, against U.S. deferred tax assets. The Company had net changes in valuation allowances in 2016 of $2.6 million, resulting in a net increase of 1.91% in the effective tax rate related to these changes. As of October 31, 2016, the Company has not recognized U.S. deferred income taxes on a cumulative total of $557.0 million of undistributed earnings from certain non-U.S. subsidiaries. The Company’s intention is to reinvest these earnings indefinitely outside of the U.S., or to repatriate the earnings only when it is tax-efficient to do so. Therefore, no U.S. tax provision has been accrued related to the repatriation of these earnings. It is not practicable to estimate the amount of any additional taxes which may be payable on the undistributed earnings given the various alternatives the Company could employ should the Company decide to repatriate these earnings in the future. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
| 2016 |  | 2015 |  | 2014
Balance at November 1 | $ | 29.6 |  |  | $ | 34.3 |  |  | $ | 30.5 |
Increases in tax positions for prior years | 5.7 |  |  | 8.5 |  |  | 5.7 |
Decreases in tax positions for prior years | (10.5 | ) |  | (2.2 | ) |  | (8.2 | )
Increases in tax positions for current years | 6.9 |  |  | 6.2 |  |  | 10.3 |
Settlements with taxing authorities | — |  |  | (5.7 | ) |  | (0.6 | )
Lapse in statute of limitations | (2.6 | ) |  | (6.2 | ) |  | (0.8 | )
Currency translation | 0.6 |  |  | (5.3 | ) |  | (2.6 | )
Balance at October 31 | $ | 29.7 |  |  | $ | 29.6 |  |  | $ | 34.3 |
The 2016 net increase is primarily related to decreases related to the settlement of prior years’ tax audits and lapse in statute of limitations, offset by increases in unrecognized tax benefits related to prior years and the current year. The Company files income tax returns in the U.S. federal jurisdiction, various U.S. state jurisdictions and various foreign jurisdictions. With a few exceptions, the Company is subject to audit by various taxing authorities for 2011 through the current fiscal year. The Company has completed its U.S. federal tax audit for the tax years through 2013. The Company recognizes accrued interest and penalties related to unrecognized tax benefits in income tax expense net of tax, as applicable. As of October 31, 2016 and October 31, 2015, the Company had $5.6 million and $5.4 million, respectively, accrued for the payment of interest and penalties. The October 31, 2016, 2015, 2014 balances include $28.5 million, $28.5 million and $28.0 million, respectively, of unrecognized tax benefits that, if recognized, would have an impact on the effective tax rate. The remaining unrecognized tax benefits relate to tax positions for which ultimate deductibility is highly certain, but for which there is uncertainty as to the timing of such deductibility. Recognition of these tax benefits would not affect our effective tax rate. The Company has estimated the reasonably possible expected net change in unrecognized tax benefits through October 31, 2016 under ASC 740. The Company’s estimate is based on lapses of the applicable statutes of limitations, settlements and payments of uncertain tax positions. The estimated net decrease in unrecognized tax benefits for the next 12 months ranges from $0.0 to $3.5 million. Actual results may differ materially from this estimate. The Company paid income taxes of $51.8 million, $73.5 million and $78.7 million in 2016, 2015, and 2014, respectively.

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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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