The Company’s effective income tax rate for the quarter of fiscal and was  and of consolidated earnings before income taxes, and and ()% for the months of fiscal and respectively. The change in the Company’s tax rate for the quarter and months of fiscal  compared to quarter and months of fiscal was driven by discrete tax items.

 

 

 

On the Tax Cuts and Jobs Act (the “Tax Act”) was enacted, which reduced the U.S. federal corporate tax rate from to required companies to pay a -time transition tax on earnings of certain foreign subsidiaries that were previously tax deferred and created new taxes on certain foreign sourced earnings. The Tax Act added many new provisions including changes the deduction for executive compensation, a tax on global intangible low taxed income (“GILTI”), the base erosion anti abuse tax (“BEAT”) and a deduction for foreign derived intangible income (“FDII”). The SEC staff issued Staff Accounting Bulletin (“SAB ) later codified as ASU - which provides a measurement period of up to year from the Tax Act’s enactment date to complete the accounting for the effects of the Tax Act.

 

During the quarter, the Company recorded a net discrete benefit of  million related to the mandatory deemed repatriation tax calculation which is inclusive of a benefit for a dividends received deduction for certain foreign tax credits upon completion of the tax return.  The additional dividends received deduction is based on our assessment of the treatment under the applicable provisions of the Tax Act as currently written and enacted. If, in the future, Congress or the Department of the Treasury provides legislative or regulatory updates, this could change our assessment of the benefit associated with the dividends received deduction, and we be required to recognize additional tax expense up to the full amount of  million in the period such updates are issued.

 

The end of the measurement period allowed under ASU - was However, the Company anticipates additional interpretations and clarifications to be issued by the U.S. Treasury Department, which affect future period tax estimates. The Company made the accounting policy election to treat taxes due on U.S. inclusions in taxable income related to GILTI as a current period expense when incurred.