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Income Taxes
6 Months Ended
Sep. 30, 2018
Income Tax Disclosure [Abstract]  
Income Taxes
NOTE 12 – INCOME TAXES
Income tax expense for the three months ended September 30, 2018 was approximately $19 million and income tax benefit for the six months ended September 30, 2018 was approximately $65 million compared with income tax expense for the three and six months ended September 30, 2017 of approximately $74 million and $134 million, respectively. For the three and six months ended September 30, 2018, the Company recorded a net discrete tax benefit of approximately $16 million and $114 million, respectively, resulting primarily from refinements to the provisional estimates of the impact of changes in tax law in the United States resulting from the enactment of the Tax Act. For the six months ended September 30, 2017, the Company recorded a net discrete tax benefit of approximately $8 million resulting primarily from reductions in uncertain tax positions related to effectively settled tax audits.
The cumulative expense recorded for the impacts of the Tax Act are provisional amounts of approximately $176 million in total, including expense of approximately $193 million related to the taxation of unremitted earnings of the Company’s foreign subsidiaries, which is payable over eight years, partially offset by a benefit of approximately $113 million related to a dividends received deduction for certain foreign tax credits relating to the fiscal 2018 year calculation of taxation of unremitted earnings, and expense of approximately $96 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 the historic unremitted earnings of its foreign subsidiaries, as well as the attendant computations that impact the measurement of the taxation of unremitted earnings, and also takes 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 $113 million tax benefit for the dividends received deduction was based on the Company’s assessment of the treatment under the provisions of the Tax Act. Congress or the Department of Treasury may provide legislative or regulatory updates which would change the Company’s assessment. If legislative or regulatory updates are issued related to this item, the timing of which is uncertain, the Company may be required to recognize additional tax expense up to the full amount of the $113 million in the period such updates are issued.
Excluding the impact of discrete items for the six months ended September 30, 2018 and 2017, the Company’s estimated annual effective tax rate was 20.8% and 28.6%, respectively. The reduction in the Company’s estimated annual effective tax rate is primarily resulting from the Tax Act which provided for a lower statutory tax rate in the United States. 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 2019, 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 quarters of fiscal year 2019.