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, |
(Dollar amounts in thousands) |
2017 |
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2016 |
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2017 |
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2016 |
Income before income taxes |
$ |
319,149 |
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$ |
209,931 |
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$ |
848,214 |
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$ |
529,705 |
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Provision for income taxes |
$ |
65,587 |
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$ |
34,154 |
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$ |
178,300 |
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$ |
96,824 |
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Effective tax rate |
20.6 |
% |
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16.3 |
% |
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21.0 |
% |
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18.3 |
% |
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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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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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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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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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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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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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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