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Income Taxes
6 Months Ended
Dec. 31, 2018
Income Tax Disclosure [Abstract]  
Income Taxes
Income Taxes

The Company had an effective tax rate of 24.7% for the three months ended December 31, 2018 and an effective tax rate of negative 14.1% for the three months ended December 31, 2017. The effective tax rate for the six months ended December 31, 2018 and 2017 was 23.4% and 6.0%, respectively. The increase in the effective tax rate is primarily due to the one-time benefit recognized on the re-measurement of deferred tax balances, primarily as a result of ASC 606, using the lower tax rates enacted under the Tax Cuts and Jobs Act (“the Act”) during the six months ended December 31, 2017.
The Act reduces the U.S. federal corporate income tax rate from 35% to 21%. In accordance with ASC 740, companies are required to re-measure deferred tax balances using the new enacted tax rates. The Act requires the Company to pay a one-time transition tax on earnings of the Company's foreign subsidiaries that were previously tax deferred for U.S. income taxes and creates new taxes on the Company's foreign sourced earnings. At December 31, 2018, the Company has completed its accounting for all of the income tax effects of the Act as enacted in December 2017.
The Act’s foreign tax credit provisions may limit the Company’s ability to utilize existing foreign tax credits in future periods, accordingly we have estimated that approximately $19.2 million could expire unutilized. The Company recorded $28.3 million related to foreign withholding taxes on future distributions of earnings and profits (“E&P”) that may not be utilizable as foreign tax credits in the year ended June 30, 2018. During the six months ended December 31, 2018, the Company made no significant changes to this amount.
The Company recorded a benefit of $253.3 million (restated for ASC 606) to account for the effects of the rate change on deferred tax balances in the year ended June 30, 2018. During the six months ended December 31, 2018, the Company made no significant changes to this amount and the accounting for the effects of the rate change on deferred tax balances is now complete.

The one-time transition tax is based on the total post-1986 E&P that was previously deferred from US income taxes. The Company recorded an amount for the one-time transition tax liability of $22.9 million for the Company's foreign subsidiaries in the year ended June 30, 2018. During the six months ended December 31, 2018, the Company made no significant changes to this amount and the Company finalized its calculation of the transition tax liability during the current period.