NOTE 10 – INCOME TAXES
The following table provides details of income taxes:
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Three months ended
March 31,
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Nine months ended
March 31,
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(Dollar amounts in thousands)
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2017
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2016
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2017
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2016
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Income before income taxes
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$
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319,149
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$
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209,931
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$
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848,214
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$
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529,705
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Provision for income taxes
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$
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65,587
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$
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34,154
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$
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178,300
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$
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96,824
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Effective tax rate
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20.6
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%
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16.3
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%
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21.0
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%
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18.3
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%
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Tax expense was higher as a percentage of income before taxes during the
three
months ended
March 31, 2017
compared to the
three
months ended
March 31, 2016
primarily due to the impact of the following items:
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•
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Tax expense increased by
$8.6 million
during the
three
months ended
March 31, 2017
related to a decrease in the Company’s unrecognized tax benefits from the expiration of the statute of limitations during the
three
months ended
March 31, 2016
;
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•
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Tax expense increased by
$5.2 million
during the three months ended
March 31, 2017
due to the impact of a decrease in the proportion of the Company’s earnings generated in jurisdictions with tax rates lower than the U.S. statutory rate during the three months ended
March 31, 2017
; partially offset by
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•
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A decrease in tax expense of
$2.6 million
during the
three
months ended
March 31, 2017
due to the impact of a higher non-taxable increase in the value of the assets held within the Company’s Executive Deferred Savings Plan during the
three
months ended
March 31, 2017
.
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Tax expense was higher as a percentage of income before taxes during the
nine
months ended
March 31, 2017
compared to the
nine
months ended
March 31, 2016
primarily due to the impact of the following items:
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•
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Tax expense increased by
$17.2 million
during the
nine
months ended
March 31, 2017
related to a decrease in the Company’s unrecognized tax benefits from the expiration of the statute of limitations during the nine months ended
March 31, 2016
;
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•
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Tax expense increased by
$11.9 million
during the
nine
months ended
March 31, 2017
due to the impact of a decrease in the proportion of the Company’s earnings generated in jurisdictions with tax rates lower than the U.S. statutory rate during the
nine
months ended March 31, 2017; partially offset by
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•
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A decrease in tax expense of
$6.4 million
during the nine months ended
March 31, 2017
due to the impact of a higher non-taxable increase in the value of the assets held within the Company’s Executive Deferred Savings Plan during the nine months ended
March 31, 2017
.
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In the normal course of business, the Company is subject to examination by tax authorities throughout the world. The Company is subject to United States federal income tax examination for all years beginning from the fiscal year ended June 30, 2014. The Company is subject to state income tax examinations for all years beginning from the fiscal year ended June 30, 2012. The Company is also subject to examinations in other major foreign jurisdictions, including Singapore, for all years beginning from the fiscal year ended June 30, 2012. It is possible that certain examinations may be concluded in the next twelve months. The Company believes that it may recognize up to
$16.0 million
of its existing unrecognized tax benefits within the next twelve months as a result of the lapse of statutes of limitations and the resolution of examinations with various tax authorities.
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