Quarterly report pursuant to Section 13 or 15(d)

Income Taxes

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Income Taxes
6 Months Ended
Aug. 31, 2020
Income Tax Disclosure [Abstract]  
INCOME TAXES INCOME TAXES
Our effective tax rate for the six months ended August 31, 2020, was 40.7% of tax expense as compared with 33.9% of tax benefit for the six months ended August 31, 2019. Our effective tax rate for the three months ended August 31, 2020, was 20.6% of tax expense as compared with 28.1% of tax benefit for the three months ended August 31, 2019.

For the six months ended August 31, 2020, our effective tax rate was higher than the federal statutory rate of 21% primarily due to:

valuation allowances on the net unrealized loss from the changes in fair value of our investments in Canopy and Canopy equity in earnings (losses), and
valuation allowances on existing capital loss carryforwards; partially offset by
the recognition of a net income tax benefit from stock-based compensation award activity.

For the three months ended August 31, 2020, our effective tax rate approximates the federal statutory rate of 21% as the recognition of a net income tax benefit from stock-based compensation award activity was largely offset by (i) valuation allowances on the net unrealized loss from the changes in fair value of our investments in Canopy and Canopy equity in earnings (losses) and (ii) higher effective tax rates from our foreign businesses.

For the six months and three months ended August 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. Our effective rate benefited from the following:

a higher effective rate of tax benefit from our foreign businesses including the tax benefits recorded on the net unrealized loss from the changes in fair value of our investments in Canopy and the tax benefits recorded on the Canopy equity in earnings (losses) and related activities;
the recognition of a net income tax benefit from stock-based compensation award activity, and
for the six months ended August 31, 2019, our effective tax rate also benefited from the reversal of valuation allowances for capital loss carryforwards in connection with the Original Wine and Spirits Transaction.