XML 32 R17.htm IDEA: XBRL DOCUMENT
v3.22.2.2

INCOME TAXES | 12 Months Ended
--- | ---
Oct. 31, 2022
Income Tax Disclosure [Abstract] |
INCOME TAXES | INCOME TAXES The provision for income taxes consists of the following:
| Year Ended October 31,
(in millions) | 2022 |  | 2021 |  | 2020
Current |  |  |  |  |
Federal | $ | 54.6 |  |  | $ | 45.0 |  |  | $ | (9.7) |
State and local | 19.9 |  |  | 15.5 |  |  | 3.3 |
Non-U.S. | 49.2 |  |  | 56.3 |  |  | 53.0 |
Total Current | 123.7 |  |  | 116.8 |  |  | 46.6 |
Deferred |  |  |  |  |
Federal | 12.5 |  |  | (33.0) |  |  | 7.9 |
State and local | (6.6) |  |  | (9.9) |  |  | 10.2 |
Non-U.S. | 7.5 |  |  | (4.3) |  |  | (1.4) |
Total Deferred | 13.4 |  |  | (47.2) |  |  | 16.7 |
Tax expense | $ | 137.1 |  |  | $ | 69.6 |  |  | $ | 63.3 |
The U.S. income before income tax expense was $333.5 million, $239.3 million and $25.5 million in 2022, 2021 and 2020, respectively. The non-U.S. income before income tax expense was $192.2 million, $239.2 million and $160.4 million in 2022, 2021 and 2020, 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:
| Year Ended October 31,
| 2022 |  | 2021 |  | 2020
Federal statutory rate | 21.00 | % |  | 21.00 | % |  | 21.00 | %
Impact of foreign tax rate differential | 2.03 | % |  | 0.70 | % |  | 0.49 | %
State and local taxes, net of federal tax benefit | 2.01 | % |  | 0.93 | % |  | 5.71 | %
Net impact of changes in valuation allowances | (1.05) | % |  | (2.57) | % |  | (15.23) | %
Non-deductible write-off and impairment of goodwill and other intangible assets | — | % |  | — | % |  | 4.02 | %
Permanent book-tax differences | 1.60 | % |  | 0.86 | % |  | 16.56 | %
Withholding taxes | 2.33 | % |  | 2.86 | % |  | 5.28 | %
Capital losses | — | % |  | (5.70) | % |  | (6.34) | %
Other items, net | (1.83) | % |  | (3.56) | % |  | 2.52 | %
Company's effective income tax rate | 26.09 | % |  | 14.52 | % |  | 34.01 | %
The primary items which increased the Company’s effective income tax rate from the federal statutory rate in 2022 were changes in the mix of earnings among tax jurisdictions, including jurisdictions for which valuation allowances have been recorded, state and local taxes, withholding taxes and the net $58.6 million book loss recorded for the disposal of the Flexibles Packaging JV and other businesses for which limited tax benefits were available. The increases were partially offset by decreases in valuation allowances and recording additional capital losses which are expected to be fully utilized. The primary items which decreased the Company’s effective income tax rate from the federal statutory rate in 2021 were capital losses, which are expected to reduce capital gains resulting from the sale of timberland; releases of unrecognized tax benefits as a result of the expiration of statute of limitations; decreases in valuation allowances; and other favorable return to provision adjustments and audit settlements. These reductions were offset by an increase in withholding taxes and other immaterial items. The primary items which increased the Company’s effective income tax rate from the federal statutory rate in 2020 were state and local taxes, non-deductible goodwill from divestment of the CPG business, increases in permanent book-tax differences including a one-time elimination related to an intra-company sale and withholding tax liabilities. Increases were offset by a reduction in valuation allowances as a result of utilization of foreign tax credits. The components of the Company’s deferred tax assets and liabilities as of October 31 for the years indicated were as follows:
(in millions) | 2022 |  | 2021
Deferred tax assets |  |  |
Net operating loss and other carryforwards | $ | 101.8 |  |  | $ | 149.0 |
Incentive liabilities | 28.6 |  |  | 16.2 |
Workers compensation accruals | 9.9 |  |  | 10.5 |
Inventories | 3.6 |  |  | 6.4 |
Operating lease liabilities | 65.5 |  |  | 74.4 |
State income taxes | 10.3 |  |  | 11.6 |
Other reserves | 13.0 |  |  | 18.4 |
Deferred compensation | 2.1 |  |  | 2.2 |
Other | 26.9 |  |  | 36.1 |
Total deferred tax assets | 261.7 |  |  | 324.8 |
Valuation allowance | (105.4) |  |  | (132.7) |
Net deferred tax assets | $ | 156.3 |  |  | $ | 192.1 |
Deferred tax liabilities |  |  |
Properties, plants and equipment | $ | 138.4 |  |  | $ | 134.9 |
Operating lease assets | 65.5 |  |  | 74.4 |
Timberland transactions | 51.8 |  |  | 51.0 |
Goodwill and other intangible assets | 174.0 |  |  | 190.2 |
Pension liabilities | 8.4 |  |  | 4.5 |
Other | 51.7 |  |  | 38.4 |
Total deferred tax liabilities | 489.8 |  |  | 493.4 |
Net deferred tax liability | $ | 333.5 |  |  | $ | 301.3 |
As of October 31, 2022 and 2021, the Company had deferred income tax benefits of $101.8 million and $149.0 million, respectively, from net operating losses and other tax credit carryforwards. For the fiscal year ended October 31, 2022, these losses and carryforwards are comprised of $4.4 million, $12.2 million and $85.2 million in U.S. Federal, U.S. state and non-U.S. jurisdictions, respectively. For the fiscal year ended October 31, 2021, these losses and carryforwards are comprised of $12.3 million, $21.8 million and $110.4 million in U.S. Federal, U.S. state and non-U.S. jurisdictions, respectively. The Company has recorded valuation allowances of $92.4 million and $116.8 million against non-U.S. deferred tax assets as of October 31, 2022 and 2021, respectively. The Company has also recorded valuation allowances against U.S. deferred tax assets of $13.0 million and $15.9 million, as of October 31, 2022 and 2021, respectively. The Company had net changes in valuation allowances in 2022 of $27.3 million. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
(in millions) | 2022 |  | 2021 |  | 2020
Balance of unrecognized tax benefit at November 1 | $ | 31.0 |  |  | $ | 36.0 |  |  | $ | 38.8 |
Increases in tax positions for prior years | 0.2 |  |  | 1.2 |  |  | 10.1 |
Decreases in tax positions for prior years | — |  |  | — |  |  | (10.5) |
Increases in tax positions for current years | 5.9 |  |  | 1.7 |  |  | 2.6 |
Lapse in statute of limitations | (11.4) |  |  | (8.0) |  |  | (5.5) |
Currency translation | (1.4) |  |  | 0.1 |  |  | 0.5 |
Balance at October 31 | $ | 24.3 |  |  | $ | 31.0 |  |  | $ | 36.0 |
The 2022 net decrease in unrecognized tax benefits is primarily related to decreases in unrecognized tax benefits related lapses in statute of limitations. The Company files income tax returns in the U.S. federal jurisdiction, various U.S. state jurisdictions and various non-U.S. jurisdictions and is subject to audit by various taxing authorities for 2014 through the current year. The Company has completed its U.S. federal tax audit for the tax years through 2015, and years 2016 through 2018 are closed for audit. The October 31, 2022, 2021, 2020 balances include $24.3 million, $31.0 million and $36.0 million, respectively, of unrecognized tax benefits that, if recognized, would have an impact on the effective tax rate. The Company also recognizes accrued interest and penalties related to unrecognized tax benefits in income tax expense net of tax, as applicable. As of October 31, 2022 and 2021, the Company had accrued for the payment of interest and penalties in the amounts of $4.8 million and $7.7 million, respectively. The Company has estimated the reasonably possible expected net change in unrecognized tax benefits through October 31, 2022 under ASC 740, "Income Taxes." The Company’s estimate is based on lapses of the applicable statutes of limitations, settlements and payments of uncertain tax positions. Though actual results may materially differ, the estimated net decrease in unrecognized tax benefits for the next 12 months could be up to $4.6 million.

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