XML 42 R23.htm IDEA: XBRL DOCUMENT
v3.23.2

Income Taxes | 12 Months Ended
--- | ---
Apr. 30, 2023
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes The provisions for income taxes were as follows:
| For the Years Ended April 30,
| 2023 |  | 2022 |  | 2021
Current Provision |  |  |  |  |
US – Federal | $ | 2,857 |  |  | $ | (324) |  |  | $ | (6,631) |
International | 48,694 |  |  | 57,905 |  |  | 43,269 |
State and local | 1,797 |  |  | 221 |  |  | 1,359 |
Total current provision | $ | 53,348 |  |  | $ | 57,802 |  |  | $ | 37,997 |
Deferred provision (benefit) |  |  |  |  |
US – Federal | $ | (24,368) |  |  | $ | (9,793) |  |  | $ | (11,996) |
International | (8,705) |  |  | 15,882 |  |  | 1,175 |
State and local | (4,408) |  |  | (2,539) |  |  | 480 |
Total deferred provision (benefit) | $ | (37,481) |  |  | $ | 3,550 |  |  | $ | (10,341) |
Total provision | $ | 15,867 |  |  | $ | 61,352 |  |  | $ | 27,656 |
International and United States pretax income were as follows:
| For the Years Ended April 30,
| 2023 |  | 2022 |  | 2021
International | $ | 204,055 |  |  | $ | 256,456 |  |  | $ | 202,490 |
United States | (170,955) |  |  | (46,795) |  |  | (26,578) |
Total | $ | 33,100 |  |  | $ | 209,661 |  |  | $ | 175,912 |
Our effective income tax rate as a percentage of pretax income differed from the US federal statutory rate as shown below:
| For the Years Ended April 30,
| 2023 |  | 2022 |  | 2021
US federal statutory rate | 21.0 | % |  | 21.0 | % |  | 21.0 | %
Cost (benefit) of higher (lower) taxes on non-US income | (9.2) | % |  | 9.7 | % |  | 1.1 | %
Foreign tax credits related to CARES Act carryback and audit | — | % |  | (11.9) | % |  | 12.3 | %
Change in valuation allowance | (7.4) | % |  | 11.9 | % |  | (12.3) | %
State income taxes, net of US federal tax benefit | (7.2) | % |  | (1.0) | % |  | 0.8 | %
US NOL carryback under CARES Act | — | % |  | — | % |  | (8.0) | %
Tax credits and related net benefits | (10.4) | % |  | (0.5) | % |  | (0.5) | %
Impairment of goodwill | 66.7 | % |  | — | % |  | — | %
Other | (5.6) | % |  | 0.1 | % |  | 1.3 | %
Effective income tax rate | 47.9 | % |  | 29.3 | % |  | 15.7 | %
The effective tax rate was 47.9% for the year ended April 30, 2023, compared to 29.3% for the year ended April 30, 2022. Our US GAAP effective tax rate for the year ended April 30, 2023, was higher primarily due to the rate differential with respect to certain restructuring items, which includes the impairment of non-deductible goodwill resulting from the segment realignment described in Note 11, "Goodwill and Intangible Assets," offset by the release of valuation allowances associated with foreign tax credits, and a more favorable mix of non-US income by jurisdiction. Our US GAAP effective tax rate for the year ended April 30, 2022, included an increase in the UK statutory rate from 19% to 25% enacted during the period, which resulted in a $21.4 million noncash, nonrecurring deferred tax expense from the remeasurement of applicable UK net deferred tax liabilities. Accounting for Uncertainty in Income Taxes: As of April 30, 2023, and April 30, 2022, the total amount of unrecognized tax benefits were $9.4 million and $8.6 million, respectively, of which $0.3 million and $0.6 million represented accruals for interest and penalties recorded as additional tax expense in accordance with our accounting policy. We recorded net interest expense on reserves for unrecognized and recognized tax benefits of $0.2 million in each of the years ended April 30, 2023 and 2022. As of April 30, 2023, and April 30, 2022, the total amounts of unrecognized tax benefits that would reduce our income tax provision, if recognized, were approximately $9.4 million and $8.6 million, respectively. We do not expect any significant changes to the unrecognized tax benefits within the next twelve months. A reconciliation of the unrecognized tax benefits included within the Other long-term liabilities line item on the Consolidated Statements of Financial Position is as follows:
| 2023 |  | 2022
Balance at May 1 | $ | 8,592 |  |  | $ | 9,144 |
Additions for current year tax positions | 1,236 |  |  | 947 |
Additions for prior year tax positions | 533 |  |  | 16 |
Reductions for prior year tax positions | — |  |  | — |
Foreign translation adjustment | (24) |  |  | (55) |
Payments and settlements | — |  |  | — |
Reductions for lapse of statute of limitations | (916) |  |  | (1,460) |
Balance at April 30 | $ | 9,421 |  |  | $ | 8,592 |
Tax Audits: We file income tax returns in the US and various states and non-US tax jurisdictions. Our major taxing jurisdictions are the United States, the United Kingdom, and Germany. We are no longer subject to income tax examinations for years prior to fiscal year 2014 in the major jurisdictions in which we are subject to tax. Deferred Taxes: Deferred taxes result from temporary differences in the recognition of revenue and expense for tax and financial reporting purposes. We believe that it is more likely than not that the results of future operations will generate sufficient taxable income to realize the net deferred tax assets. The significant components of deferred tax assets and liabilities as of April 30 were as follows:
| 2023 |  | 2022 (1)
Net operating losses | $ | 27,434 |  |  | $ | 20,847 |
Reserve for sales returns and doubtful accounts | 2,523 |  |  | 3,771 |
Accrued employee compensation | 24,928 |  |  | 26,722 |
Foreign and federal credits | 31,930 |  |  | 34,537 |
Other accrued expenses | 2,513 |  |  | 2,700 |
Retirement and post-employment benefits | 16,880 |  |  | 15,769 |
Operating lease liabilities | 26,631 |  |  | 28,111 |
Total gross deferred tax assets | $ | 132,839 |  |  | $ | 132,457 |
Less valuation allowance | (27,448) |  |  | (30,000) |
Total deferred tax assets | $ | 105,391 |  |  | $ | 102,457 |
Prepaid expenses and other current assets | $ | (2,927) |  |  | $ | (2,684) |
Unremitted foreign earnings | (2,835) |  |  | (2,685) |
Intangible and fixed assets | (216,251) |  |  | (249,104) |
Right-of-use assets | (16,049) |  |  | (19,286) |
Total deferred tax liabilities | $ | (238,062) |  |  | $ | (273,759) |
Net deferred tax liabilities | $ | (132,671) |  |  | $ | (171,302) |
Reported As |  |  |
Deferred tax assets | $ | 11,371 |  |  | $ | 8,763 |
Deferred tax liabilities | (144,042) |  |  | (180,065) |
Net Deferred Tax Liabilities | $ | (132,671) |  |  | $ | (171,302) |
(1) | Prior year amounts were updated to reflect an immaterial correction of previous netting of certain deferred taxes.
The decrease in net deferred taxes was due to the decrease in net deferred tax liabilities, which was primarily attributable to a decrease in intangible and fixed assets. In addition, we had an increase in net deferred tax assets related to net operating losses and retirement and post-employment benefits. We have concluded that, after valuation allowances, it is more likely than not that we will realize substantially all of the net deferred tax assets at April 30, 2023. In assessing the need for a valuation allowance, we take into account related deferred tax liabilities and estimated future reversals of existing temporary differences, future taxable earnings and tax planning strategies to determine which deferred tax assets are more likely than not to be realized in the future. Changes to tax laws, statutory tax rates and future taxable earnings can have an impact on our valuation allowances. We have provided a $27.4 million valuation allowance as of April 30, 2023, based primarily on the uncertainty of utilizing the tax benefits related to our deferred tax assets for foreign tax credits. This valuation allowance is decreased by approximately $2.6 million from the valuation allowance as of April 30, 2022. As of April 30, 2023, we have apportioned state net operating loss carryforwards totaling approximately $111 million, with a tax effected value of $6.3 million net of federal benefits. Our state and federal NOLs and credits, to the extent they expire, expire in various amounts over 1 to 20 years. We intend to repatriate earnings from our non-US subsidiaries, and to the extent we repatriate these funds to the US, we will be required to pay income taxes in various US state and local jurisdictions and applicable non-US withholding or similar taxes in the periods in which such repatriation occurs. As of April 30, 2023, we have recorded a $2.8 million liability related to the estimated taxes that would be incurred upon repatriating certain non-US earnings to the US.

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 -Topic 946 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 13 -Publisher FASB -URI https://asc.fasb.org//1943274/2147480990/946-20-50-13 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 235 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//740/tableOfContent Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 14 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-14 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 21 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-21 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 270 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482526/740-270-50-1 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 17 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-17 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479360/740-10-S99-1 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479360/740-10-S99-2 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 30 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482603/740-30-50-2 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration