Income Taxes (Notes)

3 Months Ended

Sep. 30, 2017

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

We use the asset and liability approach for financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed annually for differences between the financial statement and tax bases of assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances based on our judgments and estimates are established when necessary to reduce deferred tax assets to the amount expected to be realized in future operating results. Company management believes that realization of deferred tax assets in excess of the valuation allowance is more likely than not. Our estimates are based on facts and circumstances in existence as well as interpretations of existing tax regulations and laws applied to the facts and circumstances.

The Company provides for income taxes regardless of whether it has received a tax assessment. Taxes are provided when it is considered probable that additional taxes will be due in excess of amounts included in the tax return. The Company regularly reviews exposure to additional income taxes due, and as further information is known or events occur, adjustments may be recorded.

Our effective tax rate for the three months ended September 30, 2017 was 44.5% compared to 33.6% in the same period last year. The effective tax rate in fiscal 2018 was negatively impacted by a higher mix of projected income in the U.S., which is a higher tax jurisdiction than the Company's foreign operations. In addition, the fiscal 2018 effective tax rate was negatively affected by a stock compensation tax adjustment of $0.5 million. The effective tax rate in fiscal 2017 was positively impacted by the projection of a higher mix of income in Canada, which has a lower tax rate relative to the U.S. In addition, the fiscal 2017 effective tax rate benefited from a favorable stock compensation tax adjustment of $0.4 million.