XML 22 R11.htm IDEA: XBRL DOCUMENT v3.21.2
Income Taxes
 6 Months Ended
Oct. 30, 2021
Income Tax Disclosure [Abstract]  
Income Taxes

Note 4. Income Taxes

The provision for income taxes for an interim period is based on an estimated annual effective income tax rate and this rate is applied to ordinary year-to-date earnings or losses. The estimated annual effective income tax rate is determined excluding the effects of unusual or significant one-time items that are reported net of the related tax effects in the period in which they occur. In addition, any material effects of enacted tax law or rate changes as well as the Company’s ability to utilize various tax assets is recognized in the period in which the change occurs.

The computation of the estimated annual effective income tax rate at each interim period requires certain estimates and assumptions including, but not limited to, the expected pre-tax income (or loss) for the year by jurisdiction, certain book to tax adjustments, and the likelihood of the realizability of deferred tax assets generated in the current year. The estimates used to compute the provision or benefit for income taxes may change as new events occur, additional information is obtained or as the Company’s tax environment changes.

The Company’s income tax expense and effective tax rate for the three and six months ended October 30, 2021 and October 31, 2020 were as follows:

 

 

Three Months Ended

 

 

Six Months Ended

 

($ in millions)

 

October 30, 2021

 

 

October 31, 2020

 

 

October 30, 2021

 

 

October 31, 2020

 

Income before income taxes

 

$

33.0

 

 

$

46.2

 

 

$

67.8

 

 

$

61.8

 

Income tax expense

 

$

5.5

 

 

$

7.6

 

 

$

11.2

 

 

$

2.5

 

Effective tax rate

 

 

16.7

%

 

 

16.5

%

 

 

16.5

%

 

 

4.0

%

The effective tax rate for the three and six months ended October 30, 2021 and three months ended October 31, 2020 was lower than the U.S. statutory tax rate primarily due to income derived from foreign operations with lower statutory tax rates. The effective tax rate for the six months ended October 31, 2020 was lower than the U.S. statutory tax rate primarily due to a benefit from tax credits earned and research deductions claimed in foreign jurisdictions and income derived from foreign operations with lower statutory tax rates.

The Company’s gross unrecognized income tax benefits were $5.3 million as of both October 30, 2021 and May 1, 2021. If any portion of the Company’s unrecognized tax benefits is recognized, it would impact the Company’s effective tax rate. The unrecognized tax benefits are reviewed periodically and adjusted for changing facts and circumstances, such as tax audits, lapse of applicable statutes of limitations and changes in tax law. The Company recognizes interest and penalties related to income tax uncertainties in income tax expense. Accrued interest and penalties were $0.2 million as of both October 30, 2021 and May 1, 2021.