INCOME TAXES

3 Months Ended

Sep. 30, 2019

INCOME TAXES

INCOME TAXES

(7) INCOME TAXES

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 three month periods ended September 30, 2019 and 2018 is as follows:

	Three Months Ended September 30,
	2019		2018
	(in millions)
Expected provision at the statutory rate	$	6.7	$	8.9
Increase/(decrease) due to:
Stock-based compensation		0.7		1.1
State income taxes expense, net of federal benefit		1.9		1.5
Change in statutory tax rate, outside U.S.		—		(0.1)
Change in uncertain tax benefits		1.0		—
Foreign tax rate differential		1.2		0.2
State NOL expirations		1.6		—
U.S. Tax Reform		—		7.6
Change in valuation allowance		—		(0.3)
Other, net		0.9		1.6
Provision for income taxes	$	14.0	$	20.5

The Company’s interim income tax provision reflects an estimate of the effective tax rate for the full fiscal year, applied to the year-to-date book income, adjusted for any discrete events, which are recorded in the period in which they occur. The estimates are re-evaluated each quarter based on estimated tax expense for the full fiscal year.

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 the 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. Provisional impacts of U.S. Tax Reform were recorded in the six months ended June 30, 2018 and further adjusted during the three months ended September 30, 2018. In accordance with SAB 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act, the Company recorded the final impacts of U.S. Reform at the end of the provisional measurement period on December 31, 2018.

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 prior to 2014.

The Company had gross unrecognized tax benefits of $16.4 million and $15.7 million, as of September 30, 2019 and June 30, 2019, respectively. These amounts include accrued interest and penalties of $2.5 million and $2.2 million, respectively as of September 30, 2019 and June 30, 2019. The Company recognizes interest and penalties related to uncertain tax positions in the provision for income taxes.