Income Taxes	9 Months Ended
Mar. 31, 2016
Income Taxes
Income Taxes	6. Income Taxes The effective tax rate for the periods presented was primarily the result of income earned in the U.S., taxed at U.S. federal and state statutory income tax rates, income earned in foreign tax jurisdictions taxed at the applicable rates, as well as the impact of permanent differences between book and tax income. Our effective tax rate for the three months ended March 31, 2016 was 30.6% as compared to 33.4% for the corresponding period of the prior fiscal year. Our effective tax rate for the nine months ended March 31, 2016 was 33.5% as compared to 34.4% for the corresponding period of the prior fiscal year. Our effective tax rate decreased for the three and nine months ended March 31, 2016 compared to the same period in 2015 primarily due to a statutory reversal of a FIN 48 liability. During the three and nine months ended March 31, 2016 and 2015, our income tax expense was driven primarily by pre-tax profitability in our domestic and foreign operations, the impact of permanent items, and the 2016 statutory reversal of a FIN 48 liability mentioned above. The permanent items are predominately a U.S. domestic production activity deduction being slightly offset by non-deductible stock-based compensation expense. Our effective tax rate for the three and nine months ended March 31, 2016 and 2015 differs from the U.S. federal statutory income tax rate primarily as a result of the impact of the permanent items. We use the “with and without” ordering approach to calculate our tax provision. This methodology requires us to utilize all other tax attributes before recognizing excess tax benefits. Excess tax benefits are generated when the deductible value of stock-based compensation for income tax purposes exceeds the value recognized for financial statement purposes. Excess tax benefits are not included as a component of deferred tax assets. When realized, excess tax benefits reduce income taxes payable and increase additional paid in capital. In our unaudited consolidated statements of cash flows, the excess tax benefits of $1.9 million and $21.8 million were reported as sources of cash flows from financing activities with offsetting reductions to cash flows from operating activities during the nine months ended March 31, 2016 and 2015, respectively. Deferred income taxes are recognized based on temporary differences between the financial statement and tax bases of assets and liabilities. Deferred tax assets and liabilities are measured using the statutory tax rates and laws expected to apply to taxable income in the years in which the temporary differences are expected to reverse. Valuation allowances are provided against net deferred tax assets if, based upon the available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income and the timing of the temporary differences becoming deductible. Management considers, among other available information, scheduled reversals of deferred tax liabilities, projected future taxable income, limitations of availability of net operating loss carryforwards, and other matters in making this assessment. We do not provide deferred taxes on unremitted earnings of foreign subsidiaries since we intend to indefinitely reinvest those earnings either currently or sometime in the foreseeable future. Unrecognized provisions for taxes on undistributed earnings of foreign subsidiaries, which are considered indefinitely reinvested, are not material to our consolidated financial position or results of operations.

6. Income Taxes

The effective tax rate for the periods presented was primarily the result of income earned in the U.S., taxed at U.S. federal and state statutory income tax rates, income earned in foreign tax jurisdictions taxed at the applicable rates, as well as the impact of permanent differences between book and tax income.

Our effective tax rate for the three months ended March 31, 2016 was 30.6% as compared to 33.4% for the corresponding period of the prior fiscal year. Our effective tax rate for the nine months ended March 31, 2016 was 33.5% as compared to 34.4% for the corresponding period of the prior fiscal year. Our effective tax rate decreased for the three and nine months ended March 31, 2016 compared to the same period in 2015 primarily due to a statutory reversal of a FIN 48 liability. During the three and nine months ended March 31, 2016 and 2015, our income tax expense was driven primarily by pre-tax profitability in our domestic and foreign operations, the impact of permanent items, and the 2016 statutory reversal of a FIN 48 liability mentioned above. The permanent items are predominately a U.S. domestic production activity deduction being slightly offset by non-deductible stock-based compensation expense. Our effective tax rate for the three and nine months ended March 31, 2016 and 2015 differs from the U.S. federal statutory income tax rate primarily as a result of the impact of the permanent items.

We use the “with and without” ordering approach to calculate our tax provision. This methodology requires us to utilize all other tax attributes before recognizing excess tax benefits. Excess tax benefits are generated when the deductible value of stock-based compensation for income tax purposes exceeds the value recognized for financial statement purposes. Excess tax benefits are not included as a component of deferred tax assets. When realized, excess tax benefits reduce income taxes payable and increase additional paid in capital. In our unaudited consolidated statements of cash flows, the excess tax benefits of $1.9 million and $21.8 million were reported as sources of cash flows from financing activities with offsetting reductions to cash flows from operating activities during the nine months ended March 31, 2016 and 2015, respectively.

Deferred income taxes are recognized based on temporary differences between the financial statement and tax bases of assets and liabilities. Deferred tax assets and liabilities are measured using the statutory tax rates and laws expected to apply to taxable income in the years in which the temporary differences are expected to reverse. Valuation allowances are provided against net deferred tax assets if, based upon the available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income and the timing of the temporary differences becoming deductible. Management considers, among other available information, scheduled reversals of deferred tax liabilities, projected future taxable income, limitations of availability of net operating loss carryforwards, and other matters in making this assessment.

We do not provide deferred taxes on unremitted earnings of foreign subsidiaries since we intend to indefinitely reinvest those earnings either currently or sometime in the foreseeable future. Unrecognized provisions for taxes on undistributed earnings of foreign subsidiaries, which are considered indefinitely reinvested, are not material to our consolidated financial position or results of operations.