

	Year Ended June 30,
	2019			2018			2017
(Benefit) provision for income taxes:
Current:
Federal	$	0.8		$	0.2		$	0.4
State and local	11.1			9.8			1.1
Foreign	155.3			67.0			129.0
Total	167.2			77.0			130.5
Deferred:
Federal	(116.6		)	25.2			(256.9		)
State and local	(49.9		)	(0.7		)	(24.2		)
Foreign	(9.2		)	(126.2		)	(108.9		)
Total	(175.7		)	(101.7		)	(390.0		)
Benefit for income taxes	$	(8.5	)	$	(24.7	)	$	(259.5	)



	Year Ended June 30,
	2019			2018			2017
Income (loss) before income taxes	$	(3,778.1	)	$	(152.5	)	$	(658.0	)
Benefit for income taxes at statutory rate	$	(793.4	)	$	(42.8	)	$	(230.3	)
State and local taxes—net of federal benefit	(30.7		)	9.9			(15.0		)
Foreign tax differentials	58.8			(21.9		)	53.3
Change in valuation allowances	(6.7		)	8.6			(108.2		)
Change in unrecognized tax benefit	43.4			(24.8		)	25.6
Tax Act	—			41.0			—
Permanent differences—net	1.8			(8.5		)	1.2
Amortization on intercompany sale	—			5.4			5.7
Goodwill impairment	693.0			—			—
Other	25.3			8.4			8.2
(Benefit) provision for income taxes	$	(8.5	)	$	(24.7	)	$	(259.5	)
Effective income tax rate	0.2		%	16.2		%	39.4		%



	June 30, 2019			June 30, 2018
Deferred income tax assets:
Inventories	$	21.6		$	9.0
Accruals and allowances	63.1			84.2
Sales returns	18.4			13.1
Share-based compensation	14.8			13.4
Employee benefits	133.8			115.7
Net operating loss carry forwards and tax credits	294.3			285.1
Interest expense limitation carry forward	52.3			—
Other	37.1			48.3
Less: valuation allowances	(67.7		)	(104.6		)
Net deferred income tax assets	567.7			464.2
Deferred income tax liabilities:
Intangible assets	986.6			1,115.7
Property, plant and equipment	13.4			18.9
Unrealized gain	0.5			5.4
Licensing rights	23.7			21.5
Other	49.7			37.8
Deferred income tax liabilities	1,073.9			1,199.3
Net deferred income tax liabilities	$	(506.2	)	$	(735.1	)



Fiscal Year Ending June 30,	United States		Western Europe		Rest of World		Total
2020	$	—	$	—	$	68.1	$	68.1
2021	—		—		13.3		13.3
2022	—		1.2		18.5		19.7
2023	—		1.7		8.3		10.0
2024 and thereafter	149.8		835.4		176.4		1,161.6
Total	$	149.8	$	838.3	$	284.6	$	1,272.7

The total valuation allowances recorded are $67.7 and $104.6 as of June 30, 2019 and 2018, respectively. In fiscal 2019, the change in the valuation allowance was due primarily to valuation allowances released on net operating losses and due to less foreign tax credit carryforwards being available after the one-time deemed repatriation tax under the Tax Act.

A reconciliation of the beginning and ending amount of UTBs is presented below:



	Year Ended June 30,
	2019			2018			2017
UTBs—July 1	$	303.6		$	257.9		$	228.9
Additions based on tax positions related to the current year	49.1			44.1			43.6
Additions for tax positions of prior years	8.3			97.4			0.4
Reductions for tax positions of prior years	(9.6		)	(39.9		)	—
Settlements	(2.7		)	(42.3		)	(1.5		)
Lapses in statutes of limitations	(9.0		)	(11.0		)	(13.2		)
Foreign currency translation	(3.6		)	(2.6		)	(0.3		)
UTBs—June 30	$	336.1		$	303.6		$	257.9

As of June 30, 2019, the Company had $336.1 of UTBs of which $162.2 represents the amount that, if recognized, would impact the effective income tax rate in future periods. As of June 30, 2019 and 2018, the liability associated with UTBs, including accrued interest and penalties, is $179.9 and $135.4, respectively, which is recorded in Income and other taxes payable and Other non-current liabilities in the Consolidated Balance Sheets.

During fiscal 2019, the Company accrued interest of $4.5, while in fiscal 2018 and 2017 the Company accrued interest of $0.8 and $1.4, respectively. During fiscal 2019, the Company accrued penalties of $0.0, while in fiscal 2018 and 2017 the Company accrued penalties of $0.4 and $0.1, respectively. The total gross accrued interest and penalties recorded in the Other noncurrent liabilities in the Consolidated Balance Sheets related to UTBs as of June 30, 2019 and 2018 is $17.3 and $13.1, respectively.

The Company is present in approximately 55 tax jurisdictions, and at any point in time is subject to several audits at various stages of completion. As a result, the Company evaluates tax positions and establishes liabilities for UTBs that may be challenged by local authorities and may not be fully sustained, despite a belief that the underlying tax positions are fully supportable. UTBs are reviewed on an ongoing basis and are adjusted in light of changing facts and circumstances, including progress of tax audits, developments in case law, and closing of statute of limitations. Such adjustments are reflected in the provision for income taxes as appropriate. In fiscal 2019 and 2018, the Company recognized a tax benefit of $11.7 and $53.3 respectively associated with the settlement of tax audits in multiple jurisdictions and the expiration of foreign and state statutes of limitation. The Company has open tax years ranging from 2009 and forward.

On the basis of information available at June 30, 2019, it is reasonably possible that a decrease of up to $23.1 in UTBs related to U.S. and foreign exposures may be necessary within the coming year. It is also possible the ongoing audits by tax authorities may result in increases or decreases to the balance of UTBs. Since it is common practice to extend audits beyond the Statute of Limitations, the Company is unable to predict the timing or conclusion of these audits and, accordingly, the Company is unable to estimate the amount of changes to the balance of UTBs that are reasonably possible at this time. However, the Company believes it has adequately provided for its UTBs for all open tax years in each tax jurisdiction.

On December 22, 2017, “H.R.1”, formerly known as the “Tax Cuts and Jobs Act” (“Tax Act”) was enacted. The Tax Act significantly revises the U.S. corporate income tax system by, amongst other things, reducing the federal tax rate on U.S. earnings to 21%, implementing a modified territorial tax system and imposing a one-time deemed repatriation tax on historical earnings generated by foreign subsidiaries that have not been repatriated to the U.S.

As a result of the 2017 Tax Act changing the U.S. to a modified territorial tax system, the Company no longer asserts that any of its undistributed foreign earnings are permanently reinvested. We do not expect to incur significant withholding or state taxes on future distributions. To the extent there remains a basis difference between the financial reporting and tax basis of an investment in a foreign subsidiary after the repatriation of the previously taxed income of $4,600.0, the Company is permanently reinvested.

On December 22, 2017, the SEC issued Staff Accounting Bulletin No. 118 (“SAB 118”) which provides guidance on accounting for the tax effects of the Tax Act. SAB 118 provides a measurement period that should not extend beyond one year from the enactment date of the Tax Act for companies to complete the accounting under ASC 740. The Company recorded its initial estimate of the impact of the Tax Act in fiscal 2018. This estimate was a charge of approximately $41.0 as a result of utilizing tax attributes (e.g., net operating losses and foreign tax credits) to fully offset the cash impact of the one-time deemed repatriation tax. During fiscal 2019, the Company finalized its estimate of the impact of the Tax Act and no additional adjustments were required.