INCOME TAXES

3 Months Ended

Sep. 30, 2024

Income Tax Disclosure [Abstract]

INCOME TAXES

INCOME TAXES

In determining its quarterly provision for income taxes, the Company uses an estimated annual effective tax rate, which is based on expected annual income, statutory tax rates and tax planning opportunities available in the various jurisdictions in which the Company operates. Certain significant or unusual items are separately recognized in the quarter in which they occur and can be a source of variability in the effective tax rates from quarter to quarter. The effective tax rate on earnings was 41.8% and 14.6% for the three months ended September 30, 2024 and 2023, respectively. The higher tax rate in the current period compared to the prior period was primarily driven by the nondeductibility of the loss on the divestiture of the Better Health VMS business in the current period and the impact of relief provided by the Internal Revenue Service relating to U.S. foreign tax credit regulations in the prior period.

Income taxes paid, net of refunds, were $32 and $16 for the three months ended September 30, 2024 and 2023, respectively. The lower payments in the prior period were primarily driven by income tax payments for fiscal year 2023 that were deferred as a result of tax relief provided by the IRS due to winter storms in California.