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INCOME TAXES (Tables) | 12 Months Ended
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Oct. 31, 2022
INCOME TAXES [Abstract] |
Income Before Income Tax Provision for Domestic and Foreign | Income before the income tax provisions consists of the following:
|  | Year Ended |
|  | October 31, 2022 |  |  | October 31, 2021 |  |  | October 31, 2020 |
United States |  | $ | 1,813 |  |  | $ | (19,447 | ) |  | $ | (10,672 | )
Foreign |  |  | 237,220 |  |  |  | 121,453 |  |  |  | 72,273 |
|  | $ | 239,033 |  |  | $ | 102,006 |  |  | $ | 61,601 |
Income Tax Provision | The components of our income tax provisions are presented below.
|  | Year Ended |
|  | October 31, 2022 |  |  | October 31, 2021 |  |  | October 31, 2020 |
Current: |  |  |  |  |  |  |  |  |
Federal |  | $ | - |  |  | $ | - |  |  | $ | - |
State |  |  | 1 |  |  |  | 4 |  |  |  | 4 |
Foreign |  |  | 58,981 |  |  |  | 25,296 |  |  |  | 21,698 |
|  |  | 58,982 |  |  |  | 25,300 |  |  |  | 21,702 |
Deferred: |  |  |  |  |  |  |  |  |  |  |  |
Federal |  |  | - |  |  |  | - |  |  |  | - |
State |  |  | 10 |  |  |  | 103 |  |  |  | 8 |
Foreign |  |  | 799 |  |  |  | (2,213 | ) |  |  | (452 | )
|  |  | 809 |  |  |  | (2,110 | ) |  |  | (444 | )
Total |  | $ | 59,791 |  |  | $ | 23,190 |  |  | $ | 21,258 |
Income Tax Rate Reconciliation | The table below presents a reconciliation of income taxes calculated by applying the statutory U.S. federal income tax rate to our income tax provisions of the reporting periods.
|  | Year Ended |
|  | October 31, 2022 |  |  | October 31, 2021 |  |  | October 31, 2020 |
U.S. federal income tax at statutory rate |  | $ | 50,197 |  |  | $ | 21,421 |  |  | $ | 12,936 |
Changes in valuation allowances |  |  | (1,462 | ) |  |  | 364 |  |  |  | 6,942 |
Foreign tax rate differentials |  |  | 7,941 |  |  |  | 3,244 |  |  |  | 1,718 |
Tax credits |  |  | (1,368 | ) |  |  | (3,942 | ) |  |  | (1,562 | )
Uncertain tax positions, including reserves, settlements and resolutions |  |  | 3,214 |  |  |  | 1,037 |  |  |  | 1,637 |
Income tax holiday |  |  | - |  |  |  | - |  |  |  | (318 | )
Other, net |  |  | 1,269 |  |  |  | 1,066 |  |  |  | (95 | )
Income tax provision |  | $ | 59,791 |  |  | $ | 23,190 |  |  | $ | 21,258 |
Reporting Period |  |  | U.S. Statutory Tax Rates |  |  | Photronics Effective Tax Rates |  |  | Primary Reasons for Differences
2022 |  |  |  | 21.0 | % |  |  | 25.0 | % |  | Non-U.S. pre-tax income being taxed at higher statutory rates in non-U.S. jurisdictions; and the establishment of uncertain tax positions in non-U.S. jurisdiction.
2021 |  |  |  | 21.0 | % |  |  | 22.7 | % |  | Loss jurisdiction pre-tax losses not being benefited due to valuation allowances, non-U.S. pre-tax income being taxed at higher statutory rates in the non-U.S. jurisdictions, and investment credits in foreign jurisdictions.
2020 |  |  |  | 21.0 | % |  |  | 34.5 | % |  | Loss jurisdiction pre-tax losses not being benefited due to valuation allowances, non-U.S. pre-tax income being taxed at higher statutory rates in the non-U.S. jurisdictions (partially offset by the benefits of a tax holiday), and investment credits in foreign jurisdictions.
Net Deferred Income Tax Assets | The net deferred income tax assets consist of the following:
|  | As of |
|  | October 31, 2022 |  |  | October 31, 2021 |
Deferred income tax assets |  |  |  |  |  |
Net operating losses |  | $ | 29,410 |  |  | $ | 31,657 |
Reserves not currently deductible |  |  | 8,528 |  |  |  | 8,201 |
Tax credit carryforwards |  |  | 9,660 |  |  |  | 9,877 |
Share-based compensation |  |  | 1,560 |  |  |  | 1,500 |
Property, plant and equipment |  |  | 6,591 |  |  |  | 7,566 |
Lease liabilities |  |  | 7,367 |  |  |  | 9,134 |
Other |  |  | - |  |  |  | 157 |
|  |  | 63,116 |  |  |  | 68,092 |
Valuation allowances |  |  | (32,895 | ) |  |  | (34,337 | )
|  |  | 30,221 |  |  |  | 33,755 |
Deferred income tax liabilities |  |  |  |  |  |  |  |
ROU assets |  |  | (8,930 | ) |  |  | (9,698 | )
Other |  |  | (1,722 | ) |  |  | - |
|  |  | (10,652 | ) |  |  | (9,698 | )
Net deferred income tax assets |  | $ | 19,569 |  |  | $ | 24,057 |
Classification |  |  |  |  |  |  |  |
Deferred income tax assets |  | $ | 19,816 |  |  | $ | 24,353 |
Other liabilities |  |  | (247 | ) |  |  | (296 | )
|  | $ | 19,569 |  |  | $ | 24,057 |
Operating Loss Carryforwards | The following tables present our available operating loss and credit carryforwards as of October 31, 2022, and their related expiration periods.
Operating Loss Carryforwards |  | Amount |  |  | Expiration Period |
Federal |  | $ | 95,822 |  |  | 2029-Indefinite |
State |  | $ | 170,198 |  |  |  | 2023-Indefinite |
Foreign |  | $ | 107 |  |  |  | 2024-2032 |
Tax Credit Carryforwards |
Tax Credit Carryforwards |  | Amount |  |  | Expiration Period |
Federal research and development |  | $ | 5,576 |  |  |  | 2024-2042 |
State |  | $ | 5,169 |  |  |  | 2023-2036 |
Reconciliation of Beginning and Ending Amounts of Unrecognized Tax Benefits | A reconciliation of the beginning and ending amounts of unrecognized tax benefits is presented below. The amounts in the table include settlements of non-U.S. audits.
|  | Year Ended |
|  | October 31, 2022 |  |  | October 31, 2021 |  |  | October 31, 2020 |
Balance at beginning of year before interest and penalties |  | $ | 3,534 |  |  | $ | 2,550 |  |  | $ | 1,758 |
(Reductions) additions of tax positions in prior years |  |  | (355 | ) |  |  | 181 |  |  |  | 227 |
Additions based on current year tax positions |  |  | 2,892 |  |  |  | 1,313 |  |  |  | 1,576 |
Settlements |  |  | (848 | ) |  |  | (489 | ) |  |  | (992 | )
Lapses of statutes of limitations |  |  | (19 | ) |  |  | (21 | ) |  |  | (19 | )
Balance at end of year before interest and penalties |  |  | 5,204 |  |  |  | 3,534 |  |  |  | 2,550 |
Interest and penalties |  |  | 395 |  |  |  | 223 |  |  |  | 131 |
Balance at end of year including interest and penalties |  | $ | 5,599 |  |  | $ | 3,757 |  |  | $ | 2,681 |
Unrecognized Tax Benefits | The following table presents additional information on our uncertain tax positions, as of the balance sheet dates.
|  | October 31, 2022 |  |  | October 31, 2021 |
Unrecognized tax benefits that, if recognized, would impact the effective tax rate |  | $ | 5,599 |  |  | $ | 3,757 |
Accrued interest and penalties related to uncertain tax positions |  | $ | 395 |  |  | $ | 223 |
Income Tax Payments and Refunds | The table below presents income taxes paid and refunds of income taxes received during the reporting periods.
|  | Year Ended |
|  | October 31, 2022 |  |  | October 31, 2021 |  |  | October 31, 2020 |
Income taxes paid |  | $ | 37,770 |  |  | $ | 22,684 |  |  | $ | 22,954 |
Income tax refunds received |  | $ | 388 |  |  | $ | 713 |  |  | $ | 4,258 |

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