Income Taxes	3 Months Ended
Dec. 31, 2019
Income Taxes
Income Taxes	Note 12 – Income Taxes The 2017 U.S. tax legislation fundamentally changed the taxation of multinational corporations. Significant provisions impacting Cubic include GILTI (global intangible low-taxed income), a new tax on income of foreign corporations, and BEAT (base-erosion and anti-abuse tax). The BEAT provisions impose an alternative tax on applicable taxpayers with base-erosion payments greater than a de minimis threshold. After considering available tax planning opportunities, a reasonable forecast of BEAT expense has been made. The quarterly forecast of our annual effective tax rate is impacted by numerous factors including income fluctuations by tax jurisdiction throughout the year, the level of intercompany transactions, applicability of new tax regimes, and the impact of acquisitions. For the three-month period ended December 31, 2019, we concluded it is more appropriate to use a blend of the discrete effective tax rate method for U.S. operations and the estimated annual effective tax rate method for foreign operations to determine income tax expense for the period, the latter of which comprises the majority of tax expense. The income tax expense recognized on pre-tax loss from continuing operations for the three months ended December 31, 2019 resulted in an effective tax rate of negative 64% which differs from the effective tax rates of 21% for the year ended September 30, 2019 and negative 31% for the three months ended December 31, 2018. The variability in effective tax rates primarily relates to the difference in jurisdictional mix of earnings, increased U.S. BEAT and state cash tax expense and discrete benefits related to the release of a portion of the existing U.S. deferred tax valuation allowance due to deferred tax liabilities acquired in business combinations.

Income Taxes

3 Months Ended

Dec. 31, 2019

Note 12 – Income Taxes

The 2017 U.S. tax legislation fundamentally changed the taxation of multinational corporations. Significant provisions impacting Cubic include GILTI (global intangible low-taxed income), a new tax on income of foreign corporations, and BEAT (base-erosion and anti-abuse tax). The BEAT provisions impose an alternative tax on applicable taxpayers with base-erosion payments greater than a de minimis threshold. After considering available tax planning opportunities, a reasonable forecast of BEAT expense has been made.

The quarterly forecast of our annual effective tax rate is impacted by numerous factors including income fluctuations by tax jurisdiction throughout the year, the level of intercompany transactions, applicability of new tax regimes, and the impact of acquisitions. For the three-month period ended December 31, 2019, we concluded it is more appropriate to use a blend of the discrete effective tax rate method for U.S. operations and the estimated annual effective tax rate method for foreign operations to determine income tax expense for the period, the latter of which comprises the majority of tax expense.

The income tax expense recognized on pre-tax loss from continuing operations for the three months ended December 31, 2019 resulted in an effective tax rate of negative 64% which differs from the effective tax rates of 21% for the year ended September 30, 2019 and negative 31% for the three months ended December 31, 2018. The variability in effective tax rates primarily relates to the difference in jurisdictional mix of earnings, increased U.S. BEAT and state cash tax expense and discrete benefits related to the release of a portion of the existing U.S. deferred tax valuation allowance due to deferred tax liabilities acquired in business combinations.