Income Taxes

9 Months Ended

Jul. 31, 2022

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The effective tax rates for the three months ended July 31, 2022 and July 31, 2021, were 16.1% and (554.9)%, respectively. The increase was primarily due to a $534.9 million tax benefit in fiscal 2021 related to the remeasurement of deferred tax assets caused by the UK enactment of a 25% corporate tax rate to be effective in fiscal 2023.

The effective tax rates for the nine months ended July 31, 2022 and July 31, 2021, were 20.5% and (666.3)%, respectively. The increase was primarily due to an intra-group transfer of intellectual property, as discussed below, and a $534.9 million tax benefit in fiscal 2021 related to the remeasurement of the related deferred tax assets caused by the UK enactment of a 25% corporate tax rate during the nine months ended July 31, 2021.

In November 2020, the Company completed an intra-group transfer of certain intellectual property and related assets of CooperVision to a UK subsidiary as part of a group restructuring to establish headquarters operations in the UK. Determining fair value involved significant judgment related to future revenue growth, operating margins and discount rates. The transfer resulted in a step-up of the UK tax-deductible basis in the intellectual property and goodwill, creating a temporary difference between the book basis and the tax basis of these assets. As a result, the Company recognized a deferred tax asset of $1,987.9 million, with a corresponding income tax benefit, during the three months ended January 31, 2021.