Company: HEI-A
Filing Date: 2025-12-22
Form Type: 10-K
Source: 0000046619-25-000082
Chunk: 116

Company: HEICO CORP
Filing Date: 2025-12-22
Form: 10-K
Item: Item 8
Chunk 116
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26,531)Total income tax expense$148,000 $118,500 $110,900         A reconciliation of the federal statutory income tax rate to the Company’s effective tax rate is as follows:Year ended October 31,202520242023Federal statutory income tax rate 21.0%21.0%21.0%State taxes, net of federal income tax benefit2.0%2.5%2.5%Tax benefit related to stock option exercises(3.0%)(2.0%)(1.1%)Foreign-derived intangible income deduction(2.5%)(2.4%)(1.9%)Research and development tax credits(1.8%)(2.1%)(1.9%)Tax-exempt gains on corporate-owned life insurance policies(1.2%)(2.3%)(.6%)Nondeductible compensation 1.3%2.2%1.4%Other, net.8%.6%.6%Effective tax rate16.6%17.5%20.0%

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The Company's effective tax rate decreased to 16.6% in fiscal 2025, down from 17.5% in fiscal 2024.  The decrease in the Company's effective tax rate principally reflects a larger tax benefit from stock option exercises recognized in the first quarter of fiscal 2025.  The Company recognized a discrete tax benefit from stock option exercises in the first quarter of fiscal 2025 and 2024 of $27.2 million and $13.6 million, respectively.The Company's effective tax rate decreased to 17.5% in fiscal 2024, down from 20.0% in fiscal 2023.  The decrease in the Company's effective tax rate reflects a larger tax benefit from stock option exercises recognized in the first quarter of fiscal 2024.  The Company recognized a discrete tax benefit from stock option exercises in the first quarter of fiscal 2024 and 2023 of $13.6 million and $6.2 million, respectively.  Additionally, the decrease in the Company's effective tax rate reflects a larger favorable impact from tax-exempt unrealized gains in the cash surrender values of life insurance policies related to the LCP in fiscal 2024, net of the nondeductible portion of the related gains in the LCP accounts of certain executive officers, as well as increased foreign-derived intangible income, which is