Income Taxes (Tables)

12 Months Ended

Oct. 31, 2017

Schedule of Income Before Income Tax, Domestic and Foreign

The components of income from continuing operations before income taxes and extraordinary items and the income tax provision related to income from all operations in our Consolidated Statements of Income consist of:



Years Ended October 31, (In millions)	2017		2016		2015
Income before income taxes:
United States	$	7.8	$	31.5	$	31.9
Foreign	386.2		264.1		183.6
	$	394.0	$	295.6	$	215.5
Income tax provision	$	21.1	$	20.7	$	10.4

Schedule of Income Tax Provision Related to Income from Continuing Operations

The income tax provision (benefit) related to income from continuing operations in our Consolidated Statements of Income consists of:



Years Ended October 31, (In millions)	2017			2016			2015
Current:
Federal	$	6.9		$	14.6		$	0.2
State	1.8			1.3			1.2
Foreign	19.5			15.5			3.4
	28.2			31.4			4.8

Deferred:
Federal	(3.9		)	(3.9		)	12.0
State	1.4			(0.7		)	(0.5		)
Foreign	(4.6		)	(6.1		)	(5.9		)
	(7.1		)	(10.7		)	5.6
Income tax provision	$	21.1		$	20.7		$	10.4

Schedule of Provision for Income Taxes Attributable to Income from Operations and Amount Computed by Applying Statutory Federal Income Tax Rate

We reconcile the provision for income taxes attributable to income from operations and the amount computed by applying the statutory federal income tax rate of 35% to income before income taxes as follows:



Years Ended October 31, (In millions)	2017			2016			2015
Computed expected provision for taxes	$	137.9		$	103.5		$	75.4
(Decrease) increase in taxes resulting from:
Income earned outside the United States subject to different tax rates	(114.6		)	(81.2		)	(72.6		)
State taxes, net of federal income tax benefit	3.9			1.2			1.5
Research and development credit	(0.7		)	(1.2		)	(0.7		)
Incentive stock option compensation and non-deductible employee compensation	(12.9		)	0.5			0.4
Tax accrual adjustment	5.0			(5.0		)	3.8
Other, net	2.5			2.9			2.6
Actual provision for income taxes	$	21.1		$	20.7		$	10.4

Schedule of Deferred Tax Assets and Liabilities

The tax effects of temporary differences that give rise to the deferred tax assets and liabilities are:



Years Ended October 31, (In millions)	2017			2016
Deferred tax assets:
Accounts receivable, principally due to allowances for doubtful accounts	$	5.4		$	3.3
Inventories	6.1			6.2
Litigation settlements	0.8			0.5
Accrued liabilities, reserves and compensation accruals	50.4			50.3
Foreign deferred tax assets (Puerto Rico tax incentives)	37.9			—
Restricted stock and stock option expenses	39.7			24.5
Net operating loss carryforwards	3.7			2.7
Plant and equipment	—			0.4
Research and experimental expenses - Section 59(e)	5.1			6.7
Tax credit carryforwards	8.7			1.8
Total gross deferred tax assets	157.8			96.4
Less valuation allowance	(59.1		)	(13.3		)
Deferred tax assets	98.7			83.1
Deferred tax liabilities:
Tax deductible goodwill	(32.4		)	(29.5		)
Plant and equipment	(4.8		)	—
Transaction costs	(1.1		)	(1.1		)
Foreign deferred tax liabilities	(13.0		)	(5.6		)
Other intangible assets	(25.9		)	(31.2		)
Total gross deferred tax liabilities	(77.2		)	(67.4		)
Net deferred tax assets	$	21.5		$	15.7

Schedule of Changes in Gross Unrecognized Tax Benefits

The aggregated changes in the balance of gross unrecognized tax benefits were as follows:



(In millions)
Balance at October 31, 2015	$	40.3
Increase from prior year's UTB's	4.5
Increase from current year's UTB's	6.7
UTB (decrease) from expiration of statute of limitations	(11.6		)
Balance at October 31, 2016	39.9
Increase from prior year's UTB's	12.9
Increase from current year's UTB's	9.9
UTB (decrease) from expiration of statute of limitations	(2.8		)
Balance at October 31, 2017	$	59.9