Income Taxes

3 Months Ended

Feb. 28, 2019

At February 28, 2019 and November 30, 2018, we had approximately $125.7 million and $125.6 million, respectively, of total gross unrecognized tax benefits. The total amount of unrecognized benefits that, if recognized, would favorably affect the effective tax rate was $99.5 million and $99.4 million (net of Federal benefit) at February 28, 2019 and November 30, 2018, respectively.

We recognize interest accrued related to unrecognized tax benefits in Interest expense. Penalties, if any, are recognized in Other expenses in our Consolidated Statements of Earnings. At February 28, 2019 and November 30, 2018, we had interest accrued of approximately $51.9 million and $49.3 million, respectively, included in Accrued expenses and other liabilities. No penalties were accrued for the three months ended February 28, 2019 and the year ended November 30, 2018.

We are currently under examination in a number of major tax jurisdictions. Though we do not expect that the resolution of these examinations will have a material effect on our consolidated financial position, they may have a material impact on our consolidated results of operations for the period in which the resolution occurs.

The table below summarizes the earliest tax years that remain subject to examination in the major tax jurisdictions in which we operate:



Jurisdiction	Tax Year
United States	2015
California	2009
New Jersey	2010
New York State	2001
New York City	2003
United Kingdom	2016
Hong Kong	2013
India	2010
Italy	2012

During the quarter we increased the provisional tax charge recorded during the year ended November 30, 2018 by $0.2 million resulting in a total tax charge of $165.3 million as a result of the Tax Act. Of this amount, $112.7 million related to the write down of our deferred tax asset, reflecting the impact of a lower federal tax rate of 21% on our deferred tax items. The remaining part of the charge related to the transition tax on the deemed repatriation of unremitted foreign earnings. The measurement period as permitted by Staff Accounting Bulletin No. 118, which was issued by SEC staff on December 22, 2017, is now closed and we have completed our accounting as it relates to the Tax Act.

Regarding the new tax on global intangible low-taxed income (“GILTI”), which became applicable in fiscal 2019, we have made an accounting policy election to treat taxes due on GILTI as a period cost if and when incurred.

For the three months ended February 28, 2019, the provision for income taxes was $16.2 million, equating to an effective tax rate of 25.9%. For the three months ended February 28, 2018, the provision for income taxes was $183.6 million, equating to an effective tax rate of 149.6%. The provision for income taxes for the three months ended February 28, 2018, included a $163.7 million provisional tax charge related to the enactment of the Tax Act.