Quarterly report pursuant to Section 13 or 15(d)

Income Taxes

v3.19.2
Income Taxes
 3 Months Ended
May 31, 2019
Income Tax Disclosure [Abstract]  
INCOME TAXES INCOME TAXES

Our effective tax rate for the three months ended May 31, 2019 was 43.9% of tax benefit as compared with 17.3% of tax expense for the three months ended May 31, 2018.

For the three months ended May 31, 2019, our effective tax rate was higher than the federal statutory rate of 21% primarily due to the net unrealized loss from the changes in fair value of our investments in Canopy, which has resulted in an overall net loss for the quarter. Our effective tax rate benefited from the following:

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the reversal of valuation allowances for capital loss carryforwards in connection with the Wine and Spirits Transaction;
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the recognition of a net income tax benefit from stock-based compensation award activity; and
•
lower effective tax rates applicable to our foreign businesses.

For the three months ended May 31, 2018, our effective tax rate was lower than the federal statutory rate of 21% primarily due to:

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lower effective tax rates applicable to our foreign businesses;
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the reversal of valuation allowances in connection with the sale of our Accolade Wine Investment (see Note 20); and
•
the recognition of a net income tax benefit from stock-based compensation award activity.