COOPER COMPANIES, INC.COO
COOPER COMPANIES, INC. Income Taxes Disclosure
Note 6. Income Taxes
Components of income before income taxes:
| Years Ended October 31, (In millions) | 2025 | 2024 | 2023 | ||||||||||||||
| Income before income taxes: | |||||||||||||||||
| United States | $ | (143.0) | $ | (87.1) | $ | (135.7) | |||||||||||
| Foreign | 709.5 | 669.4 | 548.6 | ||||||||||||||
| $ | 566.5 | $ | 582.3 | $ | 412.9 | ||||||||||||
Components of provision for income taxes:
Years Ended October 31, (In millions) | 2025 | 2024 | 2023 | ||||||||||||||
| Current: | |||||||||||||||||
| Federal | $ | 28.8 | $ | 38.2 | $ | 37.3 | |||||||||||
| State | 3.8 | 1.3 | 3.7 | ||||||||||||||
| Foreign | 23.8 | 31.6 | 33.0 | ||||||||||||||
| Total current provision for income taxes | 56.4 | 71.1 | 74.0 | ||||||||||||||
| Deferred: | |||||||||||||||||
| Federal | (5.1) | (19.6) | (36.7) | ||||||||||||||
| State | (1.5) | 0.5 | (7.5) | ||||||||||||||
| Foreign | 141.8 | 138.0 | 88.9 | ||||||||||||||
| Total deferred provision for income taxes | 135.2 | 118.9 | 44.7 | ||||||||||||||
| Total provision for income taxes | $ | 191.6 | $ | 190.0 | $ | 118.7 | |||||||||||
Reconciliation between the expected provision for income taxes at the U.S. federal statutory rate and the provision for income taxes:
Years Ended October 31, (In millions) | 2025 | 2024 | 2023 | ||||||||||||||
| Provision for income taxes at United States statutory tax rate | $ | 118.9 | $ | 122.3 | $ | 86.7 | |||||||||||
| (Decrease) increase in taxes resulting from: | |||||||||||||||||
| Foreign earnings in jurisdictions with different tax rates | 20.5 | 27.8 | 7.0 | ||||||||||||||
| Foreign earnings subject to United States tax | 50.7 | 45.5 | 34.3 | ||||||||||||||
| Excess tax benefits from share-based compensation | (0.3) | (5.1) | (2.4) | ||||||||||||||
| Changes in valuation allowance | 10.1 | — | — | ||||||||||||||
| Changes in unrecognized tax benefits | (12.5) | 0.6 | — | ||||||||||||||
| State tax provision | 1.0 | 1.2 | (4.2) | ||||||||||||||
Nontaxable or nondeductible items | 9.2 | 9.4 | 0.1 | ||||||||||||||
| Prior year tax returns | (2.4) | (6.3) | 0.7 | ||||||||||||||
| Other, net | (3.6) | (5.4) | (3.5) | ||||||||||||||
| Provision for income taxes | $ | 191.6 | $ | 190.0 | $ | 118.7 | |||||||||||
Components of deferred tax assets and liabilities:
Years Ended October 31, (In millions) | 2025 | 2024 | |||||||||
| Deferred tax assets: | |||||||||||
| Inventory | $ | 55.6 | $ | 43.0 | |||||||
| Employee compensation and benefits | 32.7 | 34.2 | |||||||||
| Lease liabilities | 49.3 | 43.0 | |||||||||
| Accrued liabilities | 90.0 | 89.4 | |||||||||
| Net operating loss carryforwards | 250.9 | 229.6 | |||||||||
| Foreign goodwill | 938.8 | 1,129.5 | |||||||||
| Foreign intangible assets | 859.4 | 817.9 | |||||||||
| Other deferred tax assets | 63.4 | 59.5 | |||||||||
| Total gross deferred tax assets | 2,340.1 | 2,446.1 | |||||||||
| Less: valuation allowance | (32.8) | (23.3) | |||||||||
| Deferred tax assets | 2,307.3 | 2,422.8 | |||||||||
| Deferred tax liabilities: | |||||||||||
| Property, plant and equipment | (67.8) | (51.7) | |||||||||
| Right of use assets | (45.5) | (40.6) | |||||||||
| U.S. goodwill | (52.7) | (44.5) | |||||||||
| U.S. intangible assets | (115.7) | (130.4) | |||||||||
| Other deferred tax liabilities | (41.4) | (41.3) | |||||||||
| Total gross deferred tax liabilities | (323.1) | (308.5) | |||||||||
| Net deferred tax assets | $ | 1,984.2 | $ | 2,114.3 | |||||||
Changes in valuation allowance:
Years Ended October 31, (In millions) | 2025 | 2024 | 2023 | ||||||||||||||
| Beginning balance | $ | 23.3 | $ | 20.7 | $ | 60.1 | |||||||||||
| Increases | 16.8 | 2.8 | 2.6 | ||||||||||||||
| Decreases | (7.3) | (0.2) | (42.0) | ||||||||||||||
| Ending balance | $ | 32.8 | $ | 23.3 | $ | 20.7 | |||||||||||
In assessing the realizability of deferred tax assets, the Company analyzes the likelihood that the tax benefit of some or all deferred tax assets will not be realized. This analysis considers historical taxable income, projected reversal of deferred tax liabilities, projected taxable income, and tax planning strategies. Based upon this analysis, it is more likely than not that the tax benefit from all deferred tax assets, net of valuation allowance, will be realized.
As of October 31, 2025, the Company had federal net operating loss carryforwards of $73.5 million and state net operating loss carryforwards of $87.5 million. Federal net operating loss carryforwards of $19.8 million expire on various dates from fiscal 2026 through fiscal 2038 and $53.7 million do not expire. The state net operating loss carryforwards expire on various dates from fiscal 2026 through fiscal 2044.
The remaining transition tax to be remitted from the U.S. Tax Cuts and Jobs Act of 2017 is $36.9 million as of October 31, 2025.
A tax benefit is recognized if it is more likely than not that a tax position will be sustained on its technical merits, based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority.
Changes in unrecognized tax benefits:
| (In millions) | |||||
| Balance at October 31, 2023 | $ | 331.5 | |||
| Decrease based on tax positions in prior fiscal years | (2.0) | ||||
| Increase based on tax positions in prior fiscal years | 2.2 | ||||
| Increase based on tax positions in current fiscal year | 1.0 | ||||
| Lapses of statutes of limitations | (5.9) | ||||
| Balance at October 31, 2024 | $ | 326.8 | |||
| Lapses of statutes of limitations | (11.8) | ||||
| Balance at October 31, 2025 | $ | 315.0 | |||
These tax benefits, if recognized, would reduce provision for income taxes for fiscal 2025, 2024 and 2023, by $314.0 million, $323.7 million, and $323.2 million, respectively. Interest and penalties related to unrecognized tax benefits are recognized in provision for income taxes. As of October 31, 2025, 2024 and 2023, accrued interest and penalties related to unrecognized tax benefits were $2.8 million, $10.7 million, and $5.8 million, respectively.
Filed tax returns are subject to examination by tax authorities in major tax jurisdictions for fiscal 2021 and subsequent years, including the U.S. and United Kingdom.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Dec 5, 2025 | Showing above |
| 2021 | Dec 10, 2021 | |
| 2018 | Dec 21, 2018 | |
About Income Taxes Disclosures
The income tax disclosure reveals how much a company actually pays in taxes versus what the statutory rate would predict. Analysts focus on the effective tax rate (ETR) reconciliation, which breaks down every item driving the gap between the 21% federal rate and the company's reported ETR — including R&D credits, foreign rate differentials, and state taxes. Deferred tax assets (DTAs) and their valuation allowances signal management's confidence in future profitability: a rising allowance suggests the company doubts it can use accumulated tax benefits. Uncertain tax benefit (UTB) reserves quantify exposure to IRS challenges on aggressive positions.
Key signals to watch: sudden ETR drops without clear operational reasons, large increases in valuation allowances, growing UTB balances, and significant unremitted foreign earnings. Post-TCJA, pay attention to GILTI and BEAT provisions that affect multinational tax structures. Compare the cash taxes paid (from the cash flow statement) against the income tax provision to gauge earnings quality.