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Income Taxes
9 Months Ended
Dec. 31, 2017
Income Tax Disclosure [Abstract]  
Income Taxes
NOTE K – INCOME TAXES
Income tax expense for the three and nine months ended December 31, 2017 was approximately $375 million and $509 million, respectively, compared with income tax expense for the three and nine months ended December 31, 2016 of approximately $84 million and $257 million, respectively. For the three and nine months ended December 31, 2017, the Company recorded a net discrete tax expense of approximately $310 million and $302 million, respectively. Of these amounts, approximately $318 million resulted from preliminary estimates of the impact of changes in tax law in the United States resulting from the enactment of the Tax Act.
The amounts recorded for the impacts of the Tax Act are provisional amounts of approximately $220 million related to the taxation of unremitted earnings of the Company’s foreign subsidiaries, which is payable over eight years, and approximately $98 million related to the remeasurement of deferred tax assets and liabilities for the change in income tax rates. The Company will continue to refine the provisional amounts as it reviews and analyzes results from the full fiscal year 2018 operations needed for calculations under the Tax Act, as well as further review the historic unremitted earnings of the Company’s foreign subsidiaries and take into consideration any additional regulatory guidance published by the U.S. tax authorities in respect of the Tax Act. The Company expects to finalize the tax expense as soon as practical, but not later than the third quarter of fiscal year 2019. The Company does not expect other provisions of the Tax Act to have a material impact for fiscal year 2018, but is evaluating the impact on future fiscal years.
Excluding the impact of discrete items for the nine months ended December 31, 2017 and 2016, the Company’s estimated annual effective tax rate was 26.6% and 28.9%, respectively. The Company’s estimated annual effective tax rate for the nine months ended December 31, 2017 includes a reduction as compared with the six months ended September 30, 2017 of 2.0% related to the statutory tax rate reduction for fiscal year 2018 resulting from the Tax Act. Changes in tax laws, the outcome of tax audits and any other changes in potential tax liabilities may result in additional tax expense or benefit in fiscal year 2018, which are not considered in the Company’s estimated annual effective tax rate. While the Company does not currently view any such items as individually material to the results of the Company’s consolidated financial position or results of operations, the impact of certain items may yield additional tax expense or benefit in the remaining quarter of fiscal year 2018.