(8) INCOME TAXES

The Company’s provision/(benefit) for income taxes from operations are summarized as follows:


	June 30,
	2019		2018		2017
	(in millions)
Current income taxes
Federal	$	—	$	(9.3)	$	1.6
State		10.9		2.0		6.3
Foreign		13.2		8.4		(2.1)
Total	$	24.1	$	1.1	$	5.8
Deferred income taxes
Federal	$	12.3	$	60.2	$	14.1
State		4.2		4.1		2.4
Foreign		(15.3)		(42.0)		(3.1)
Total		1.2		22.3		13.4
Total provision for income taxes	$	25.3	$	23.4	$	19.2

The United States and foreign components of income from operations before income taxes are as follows:


	June 30,
	2019		2018		2017
	(in millions)
United States	$	91.9	$	69.3	$	68.8
Foreign		83.4		57.0		37.5
Total	$	175.3	$	126.3	$	106.3

A reconciliation of the actual income tax provision and the tax computed by applying the U.S. federal rate to the earnings before income taxes during the years ended June 30, 2019, 2018 and 2017 are as follows, prior period amounts were reclassified for comparability with the 2019 presentation:


	June 30,
	2019		2018		2017
	(in millions)
Applicable statutory rate		21%		28%		35%
Expected provision at the statutory rate	$	36.8	$	35.4	$	37.2
Increase/(decrease) due to:
Stock-based compensation		6.6		3.8		(11.7)
State income taxes, net of federal benefit		4.7		3.2		2.9
Change in statutory tax rate, outside U.S.		(1.4)		7.4		(1.4)
Change in uncertain tax benefits		11.8		3.1		—
Foreign tax rate differential		4.4		(2.4)		(3.9)
U.S. Tax Reform		7.2		24.8		—
Change in valuation allowance		(38.7)		(49.3)		(10.2)
Other, net		(6.1)		(2.6)		6.3
Provision for income taxes	$	25.3	$	23.4	$	19.2

On December 22, 2017, the U.S. federal government enacted a tax bill, H.R.1, An Act to Provide for Reconciliation Pursuant to Titles II and V of the Concurrent Resolution on the Budget for Fiscal Year 2018, previously known as Tax Cuts and Jobs Act of 2017 (“U.S. Tax Reform”). U.S. Tax Reform reduced the U.S. corporate tax rate from 35% to 21%, created a territorial tax system with a one-time mandatory repatriation tax on previously deferred foreign earnings, and changed business-related deductions and credits.

ASC 740, Income Taxes, requires companies to recognize the effect of tax law changes in the period of enactment. The SEC staff issued SAB 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act (“SAB 118”), which allowed registrants to record provisional amounts during a measurement period. The measurement period ended as of December 31, 2018, and final amounts are now recorded.

Although these amounts are no longer provisional, the determination of U.S. Tax Reform’s income tax effects may change following future legislation or further interpretation based on the publication of U.S. Treasury regulations as well as guidance from the Internal Revenue Service and state tax authorities. Amounts recognized due to the U.S. Tax Reform for the year ended June 30, 2019:


	Through June 30, 2018		Tax Expense recognized for the Year Ended June 30, 2019		Through June 30, 2019
	(in millions)
Change in statutory tax rate, U.S. only	$	(13.6)	$	6.2	$	(7.4)
Changes to indefinite reinvestment assertion		0.8		(0.2)		0.6
Repatriation Tax		37.6		1.2		38.8
Net impacts of U.S. Tax Reform	$	24.8	$	7.2	$	32.0

Some U.S. Tax Reform provisions became effective during Fiscal 2019. As of June 30, 2019, the following provisions are not expected to have a material impact on tax expense: Global Intangible Low-Taxed Income, Base Erosion and Anti-abuse Tax, and the interest expense limitations. The executive compensation limitations had an impact and are included in stock compensation on the rate reconciliation. The Company continues to evaluate the impact of U.S. Tax Reform as more information and guidance becomes available.

The Company has not asserted indefinite reinvestment on its foreign subsidiaries and carries $0.8 million as a deferred tax liability for an estimate of the additional tax due upon actual repatriation.

The Company had gross unrecognized tax benefits of $15.7 million and $3.0 million, as of June 30, 2019 and June 30, 2018, respectively. The Company recognizes interest and penalties related to uncertain tax positions in income tax expense.


	June 30,
	2019		2018
	(in millions)
Balance at beginning of year	$	3.0	$	0.2
Additions for current year tax positions		1.5		1.2
Additions for prior year tax positions		11.5		1.7
Reductions as a result of settlement with tax authority		(0.3)		(0.1)
Balance at end of year	$	15.7	$	3.0

Interest and penalties included in balance	$	2.2	$	0.1
Amount, if recognized, would impact the effective income tax rate		10.0		1.8
Amount that could be settled within the next year		10.0		1.9

The Company files income tax returns in various federal, state, and local jurisdictions including the United States, Canada, United Kingdom and France. In the normal course of business, the Company is subject to examination by taxing authorities throughout the world. With few exceptions, the Company is no longer subject to income tax examinations by tax authorities in major tax jurisdictions for years before 2014.

Deferred income taxes reflect the tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The tax effect of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities are as follows:


	June 30,
	2019		2018
	(in millions)
Deferred income tax assets
Net operating loss carry forwards	$	367.5	$	545.2
Tax credit carry forwards		12.9		17.9
Deferred revenue		333.2		299.3
Accrued expenses		39.7		38.1
Other liabilities		4.5		2.3
Reserves against accounts receivable		20.6		15.8
Deferred compensation		8.7		11.2
Total deferred income tax assets		787.1		929.8
Valuation allowance		(32.4)		(72.9)
Net deferred tax assets		754.7		856.9
Deferred income tax liabilities
Property and equipment		589.9		675.8
Intangible assets		272.5		293.3
Debt issuance costs		2.4		2.4
Total deferred income tax liabilities		864.8		971.5
Less SRT deferred tax liabilities held for sale		—		(5.1)
Net deferred income tax liabilities	$	(110.1)	$	(109.5)

As of June 30, 2019, the Company had $1,234.5 million of U.S. federal NOL carry forwards. The Company used approximately $406.9 million during Fiscal 2019 to offset increased profitability. The Company has completed several acquisitions in which it acquired net operating loss tax attributes as part of the purchase. These acquisitions, however, were considered a "change in ownership” within the meaning of Section 382 of the Internal Revenue Code and, as a result, such NOL carry forwards are subject to an annual limitation, reducing the amount available to offset income tax liabilities absent the limitation. Currently available U.S. NOL carry forwards as of June 30, 2019 are approximately $874.2 million. An additional $169.4 million will become available for use during fiscal year ended June 30, 2020. The Company’s NOL carryforwards, if not utilized to reduce taxable income in future periods, will expire in various amounts beginning in 2020 and ending in 2038.

As of June 30, 2019, the Company had approximately $345.9 million of foreign jurisdiction net operating loss carry forwards, primarily in UK, Canada, and France. NOL carry forwards in most foreign countries do not expire. Canada NOLs will not begin to expire until 2029. Some foreign NOLs have a valuation allowance reducing the value of the corresponding deferred tax asset in the financial statements due to recent losses. During Fiscal 2019, valuation allowances were released in the United Kingdom as a result of corporate restructuring offering an enhanced ability to utilize those NOLs against future taxable income.

As of June 30, 2019, the Company had tax-effected state net operating loss carry forwards of approximately $34.2 million, which are subject to limitations on their utilization and have various expiration dates of 2020 through 2038. The Company believes $32.1 million of this balance will be utilized and has provided a valuation allowance for the remainder.

Management believes it is more likely than not that it will utilize its net deferred tax assets to reduce or eliminate tax payments in future periods, with the exception of deferred tax assets related to certain foreign subsidiaries. The Company’s evaluation encompassed (i) a review of its recent history of taxable income for the past three years and (ii) a review of internal financial forecasts demonstrating its expected ability to fully utilize its deferred tax assets prior to expiration.