INCOME TAXES

9 Months Ended

Aug. 01, 2021

INCOME TAXES [Abstract]

INCOME TAXES

NOTE 10 - INCOME TAXES

We calculate our provision for income taxes at the end of each interim reporting period on the basis of an estimated annual effective tax rate adjusted for tax items that are discrete to each period.

The effective tax rate of 24.4% in the three-month period end August 1, 2021, differs from the U.S. statutory rate of 21.0% primarily due to changes in forecasted jurisdictional earnings.

The effective tax rate of 22.4% in the nine-month period ended August 1, 2021, differs from the U.S. statutory rate of 21.0% primarily due to changes in forecasted jurisdictional earnings, the benefits of investment credits in certain foreign jurisdictions, which were partially offset by the non-recognition of taxes or benefits that, in certain jurisdictions, have been offset by valuation allowances.

The effective tax rate of 27.7% in the three-month period ended August 2, 2020, exceeds the U.S. statutory rate of 21.0% primarily due to the non-recognition of the tax benefit of losses that, in certain jurisdictions, have been offset by valuation allowances, which were partially offset by the benefit of tax holidays and investment credits in certain foreign jurisdictions.

The effective tax rate of 35.9% in the nine-month period ended August 2, 2020, exceeds the U.S. statutory rate of 21.0% primarily due to the non-recognition of the tax benefit of losses that, in certain jurisdictions, have been offset by valuation allowances, and the establishment of a valuation allowance for a loss carryforward in a non-U.S. jurisdiction, which were partially offset by the benefits of tax holidays and investment credits in certain foreign jurisdictions.

Valuation allowances, in jurisdictions with historic losses, eliminate the current tax benefit of losses in these jurisdictions where, based on the weight of information available to us, we determined that it is not more likely than not that the tax benefits will be realized. In the nine-month period ended August 2, 2020, as a result of the reassessment of the aforementioned available information, we established a valuation allowance of $2.1 million against a non-U.S. based loss-carryforward deferred tax asset that is not more likely than not to be realized.

Unrecognized tax benefits related to uncertain tax positions were $3.3 million at August 1, 2021, of which $2.6 million, if recognized, would have a favorable impact on our effective tax rate. Unrecognized tax benefits related to uncertain tax positions were $2.7 million at October 31, 2020, of which $2.0 million, if recognized, would have a favorable impact on the Company’s effective tax rate. Accrued interest and penalties related to unrecognized tax benefits was $0.2 million and $0.1 million at August 1, 2021 and October 31, 2020, respectively. Although the timing of the expirations of statutes of limitations may be uncertain, as they can be dependent upon the settlement of tax audits, the Company believes the amount of uncertain tax positions (including interest and penalties, and net of tax benefits) that may be resolved over the next twelve months is immaterial. Resolution of these uncertain tax positions may result from either or both the lapses of statutes of limitations and tax settlements. The Company is no longer subject to tax authority examinations in the U.S. and major foreign or state jurisdictions for years prior to fiscal year 2015.