Income Taxes

9 Months Ended

Mar. 31, 2025

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The effective tax rate used for interim periods is the estimated annual effective consolidated tax rate, based on the current estimate of full year results, except that taxes related to specific events, if any, are recorded in the interim period in which they occur. The annual effective tax rate is based upon a number of significant estimates and judgments, including the estimated annual pre-tax income, or loss, of the Company in each tax jurisdiction in which it operates, and the development of tax planning strategies during the year. In addition, the Company's tax expense or benefit can be impacted by changes in tax rates or laws, the finalization of tax audits, and other factors that cannot be predicted with certainty. As such, there can be significant volatility in interim tax provisions.

Income tax expense was $26.6 million, or 21.8 percent of pre-tax income for the three months ended March 31, 2025, as compared with income tax expense of $3.8 million, or 37.6 percent of pre-tax income for the three months ended March 31, 2024. Income tax expense for the nine months ended March 31, 2025 was $63.9 million, or 19.5 percent of pre-tax income as compared with income tax expense of $24.8 million, or 21.1 percent of pre-tax income for the nine months ended March 31, 2024.

Income tax expense for the three months ended March 31, 2025 includes discrete tax benefits of $3.2 million attributable to employee share-based compensation. Income tax expense for the three months ended March 31, 2024 included the unfavorable impacts of the $14.1 million non-deductible goodwill impairment charge and losses in certain foreign jurisdictions for which no tax benefit can be recognized. Also included were discrete tax benefits of $12.4 million associated with the pension settlement charge and $1.4 million as a result of changes in the Company's prior year tax positions. Excluding the discrete tax impacts of the pension settlement charge, non-deductible goodwill impairment charge and changes in the Company's prior year tax positions, the rate for the three months ended March 31, 2024 would have been 23.1 percent.

Income tax expense for the nine months ended March 31, 2025 includes discrete tax benefits of $13.0 million attributable to employee share-based compensation. Income tax expense for the nine months ended March 31, 2024 included the unfavorable impacts of the $14.1 million non-deductible goodwill impairment charge and losses in certain foreign jurisdictions for which no tax benefit can be recognized. Also included were discrete tax benefits of $12.4 million associated with the pension settlement charge, $1.4 million as a result of changes in the Company's prior year tax positions and $4.7 million attributable to employee share-based compensation.