GREIF, INCGEF
GREIF, INC Income Taxes Disclosure
INCOME TAXES
The provision for income taxes consists of the following:
| Year Ended October 31, | |||||||||||||||||
| (in millions) | 2024 | 2023 | 2022 | ||||||||||||||
| Current | |||||||||||||||||
| Federal | $ | 44.7 | $ | 77.4 | $ | 54.6 | |||||||||||
| State and local | 8.9 | 19.6 | 19.9 | ||||||||||||||
| Non-U.S. | 59.8 | 49.1 | 49.2 | ||||||||||||||
| Total Current | 113.4 | 146.1 | 123.7 | ||||||||||||||
| Deferred | |||||||||||||||||
| Federal | (61.5) | (18.8) | 12.5 | ||||||||||||||
| State and local | (12.7) | (8.6) | (6.6) | ||||||||||||||
| Non-U.S. | (12.0) | (0.9) | 7.5 | ||||||||||||||
| Total Deferred | (86.2) | (28.3) | 13.4 | ||||||||||||||
| Tax expense | $ | 27.2 | $ | 117.8 | $ | 137.1 | |||||||||||
The U.S. income before income tax expense was $85.1 million, $240.7 million and $333.5 million in 2024, 2023 and 2022, respectively. The non-U.S. income before income tax expense was $234.5 million, $254.0 million and $192.2 million in 2024, 2023 and 2022, respectively.
The following is a reconciliation of the provision for income taxes based on the federal statutory rate to the Company’s effective income tax rate:
| Year Ended October 31, | |||||||||||||||||
| 2024 | 2023 | 2022 | |||||||||||||||
| Federal statutory rate | 21.00 | % | 21.00 | % | 21.00 | % | |||||||||||
| Impact of foreign tax rate differential | 1.26 | % | 1.78 | % | 2.03 | % | |||||||||||
| State and local taxes, net of federal tax benefit | (1.04) | % | 1.71 | % | 2.01 | % | |||||||||||
| Net impact of changes in valuation allowances | (3.32) | % | (2.21) | % | (1.05) | % | |||||||||||
| Permanent book-tax differences | 5.71 | % | (0.25) | % | 1.60 | % | |||||||||||
| Withholding taxes | 5.14 | % | 2.95 | % | 2.33 | % | |||||||||||
| Tax credits | (6.63) | % | (1.40) | % | (0.99) | % | |||||||||||
| Impact of intangible property transfers | (15.38) | % | — | % | — | % | |||||||||||
| Other items, net | 1.77 | % | 0.23 | % | (0.84) | % | |||||||||||
| Company’s effective income tax rate | 8.51 | % | 23.81 | % | 26.09 | % | |||||||||||
The primary items that decreased the Company’s effective income tax rate from the federal statutory rate in 2024 were recognition of a deferred tax asset related to the onshoring of certain intangible property, tax credits and release of valuation allowances. The decreases were partially offset by permanent differences between book income and taxable income, including the allocation of goodwill to the Delta Divestiture for which a tax benefit will not be realized, and withholding taxes.
The primary items that increased the Company’s effective income tax rate from the federal statutory rate in 2023 were changes in the mix of earnings among tax jurisdictions, including jurisdictions for which valuation allowances have been recorded, state and local taxes and withholding taxes. The increases were partially offset by tax credits and release of valuation allowances.
The primary items that increased the Company’s effective income tax rate from the federal statutory rate in 2022 were changes in the mix of earnings among tax jurisdictions, including jurisdictions for which valuation allowances have been recorded, state and local taxes, withholding taxes and the net $58.6 million book loss recorded for the FPS Divestiture and other disposals of businesses for which limited tax benefits were available. The increases were partially offset by decreases in valuation allowances and recording additional capital losses which are expected to be fully utilized.
The components of the Company’s deferred tax assets and liabilities as of October 31 for the years indicated were as follows:
| (in millions) | 2024 | 2023 | |||||||||
| Deferred tax assets | |||||||||||
| Net operating loss and other carryforwards | $ | 126.5 | $ | 104.9 | |||||||
| Incentive liabilities | 20.5 | 18.6 | |||||||||
| Operating lease liabilities | 68.1 | 70.3 | |||||||||
| Other reserves | 12.5 | 16.0 | |||||||||
| Research and development expenses | 56.7 | 29.7 | |||||||||
| Other | 70.3 | 45.4 | |||||||||
| Total deferred tax assets | 354.6 | 284.9 | |||||||||
| Valuation allowance | (87.4) | (97.3) | |||||||||
| Net deferred tax assets | $ | 267.2 | $ | 187.6 | |||||||
| Deferred tax liabilities | |||||||||||
| Properties, plants and equipment | $ | 181.1 | $ | 157.2 | |||||||
| Operating lease assets | 68.1 | 70.3 | |||||||||
| Timberland transactions | 52.7 | 51.6 | |||||||||
| Goodwill and other intangible assets | 163.2 | 150.6 | |||||||||
| Pension liabilities | 8.9 | 10.6 | |||||||||
| Other | 51.4 | 50.0 | |||||||||
| Total deferred tax liabilities | 525.4 | 490.3 | |||||||||
| Net deferred tax liability | $ | 258.2 | $ | 302.7 | |||||||
As of October 31, 2024 and 2023, the Company had deferred income tax benefits of $126.5 million and $104.9 million, respectively, from net operating losses and other tax credit carryforwards. For the fiscal year ended October 31, 2024, these losses and carryforwards consist of $19.5 million, $10.2 million and $96.8 million in U.S. Federal, U.S. state and non-U.S. jurisdictions, respectively. For the fiscal year ended October 31, 2023, these losses and carryforwards consist of $7.5 million, $10.1 million and $87.3 million in U.S. Federal, U.S. state and non-U.S. jurisdictions, respectively. The Company has recorded valuation allowances of $65.2 million and $82.8 million against non-U.S. deferred tax assets as of October 31, 2024 and 2023, respectively. The Company has also recorded valuation allowances against U.S. deferred tax assets of $22.2 million and $14.5 million, as of October 31, 2024 and 2023, respectively. The Company had net changes in valuation allowances in 2024 of $9.9 million.
A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
| (in millions) | 2024 | 2023 | 2022 | ||||||||||||||
| Balance of unrecognized tax benefit at November 1 | $ | 23.4 | $ | 24.3 | $ | 31.0 | |||||||||||
| Increases in tax positions for prior years | 1.7 | 0.6 | 0.2 | ||||||||||||||
| Increases in tax positions for current years | 3.9 | 4.1 | 5.9 | ||||||||||||||
| Lapse in statute of limitations | (3.6) | (4.6) | (11.4) | ||||||||||||||
| Currency translation | 0.1 | (1.0) | (1.4) | ||||||||||||||
| Balance at October 31 | $ | 25.5 | $ | 23.4 | $ | 24.3 | |||||||||||
The 2024 net increase in unrecognized tax benefits is primarily related to increases in unrecognized tax benefits related to the prior and current year, offset by decreases related to lapses in the statute of limitations. The Company files income tax returns in the U.S. federal jurisdiction, various U.S. state jurisdictions and various non-U.S. jurisdictions and is subject to audit by various taxing authorities for 2016 through the current year. The Company has completed its U.S. federal tax audit for the tax years through 2016, and the statues of limitations have expired for years 2017 through 2020. The Company has filed a refund claim for 2019 and is under audit for this year. Adjustments may only be made up to the amount of the refund claim.
The October 31, 2024, 2023, 2022 balances include $25.5 million, $23.4 million and $24.3 million, respectively, of unrecognized tax benefits that, if recognized, would have an impact on the effective tax rate. The Company also recognizes
accrued interest and penalties related to unrecognized tax benefits in income tax expense net of tax, as applicable. As of October 31, 2024 and 2023, the Company had accrued for the payment of interest and penalties in the amounts of $3.8 million and $4.8 million, respectively.
The Company has estimated the reasonably possible expected net change in unrecognized tax benefits through October 31, 2024 under ASC 740, “Income Taxes.” The Company’s estimate is based on lapses of the applicable statutes of limitations, settlements and payments of uncertain tax positions. Though actual results may materially differ, the estimated net decrease in unrecognized tax benefits for the next 12 months could be up to $6.3 million.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2024 | Dec 23, 2024 | Showing above |
| 2023 | Dec 18, 2023 | |
| 2022 | Dec 16, 2022 | |
| 2021 | Dec 16, 2021 | |
| 2020 | Dec 17, 2020 | |
| 2019 | Dec 18, 2019 | |
| 2018 | Dec 20, 2018 | |
| 2017 | Dec 20, 2017 | |
| 2016 | Dec 21, 2016 | |
| 2015 | Dec 21, 2015 | |
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.