Company: HEI-A
Filing Date: 2025-12-22
Form Type: 10-K
Source: 0000046619-25-000082
Chunk: 92

Company: HEICO CORP
Filing Date: 2025-12-22
Form: 10-K
Item: Item 8
Chunk 92
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 an assessment of all available information (i.e., historical experience, current and forecasted performance) and only to the extent it is probable that a significant reversal of revenue recognized will not occur when the uncertainty is resolved.  The Company estimates variable 

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consideration by applying the most likely amount method when there are a limited number of outcomes related to the resolution of the variable consideration.  See Note 6, Revenue, for additional information regarding the Company’s revenue recognition policy.Changes in estimates that result in adjustments to net sales and cost of sales are recognized as necessary in the period they become known on a cumulative catch-up basis.  Changes in estimates did not have a material effect on net income from consolidated operations in fiscal 2025, 2024 and 2023.Stock-Based Compensation    The Company records compensation expense for stock options in its Consolidated Statements of Operations based on the grant-date fair value of the awards.  The fair value of each stock option on the grant date is estimated using the Black-Scholes option-pricing model and certain valuation assumptions.  Expected stock price volatility is derived from the Company’s historical stock prices over the expected life of the option and other relevant factors.  The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for instruments with a similar term.  The dividend yield reflects the Company’s expected dividend yield on the grant date.  The expected option life represents the period of time the options are expected to remain outstanding, considering both the contractual term of the grant and employees’ historical exercise behavior.  The Company’s historical forfeiture rate is nominal and therefore excluded from the grant-date fair value estimation.  As such, the impact of forfeitures is recognized as they occur.During fiscal 2025, the Company granted stock options that included a performance condition.  Each tranche of these graded-vesting awards is treated as a separate award for valuation purposes, with fair value determined at the grant date using the Black-Scholes model and tranche-specific assumptions.  Compensation expense for these awards is recognized using an accelerated attribution method over the requisite service period, based on the assessed probability of achieving the performance condition.  If achievement of the performance condition is not considered probable, no expense is recognized until such time that achievement becomes probable.  See Note 11, Share-Based Compensation, for additional information.Income Taxes    Income tax expense includes U.S. and foreign income taxes.  Deferred income taxes are provided on elements of income that are