Federal amended return adjustment

[Table of Contents](#i988317c7021a4a8fa66f2208a2958f7e_10)NOTE 13 — Income Taxes   
Income before taxes consisted of the following:

|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  |  | Year Ended July 31, |
| (In thousands) |  | 2022 |  | 2021 |  | 2020 |
| U.S. |  | $ | 1,241,177  |  |  | $ | 1,022,134  |  |  | $ | 740,171  |  |
| International |  | 99,777  |  |  | 99,712  |  |  | 60,668  |  |
| Total income before taxes |  | $ | 1,340,954  |  |  | $ | 1,121,846  |  |  | $ | 800,839  |  |

  
Income tax expense (benefit) from continuing operations consisted of the following:

|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  |  | Year Ended July 31, |
| (In thousands) |  | 2022 |  | 2021 |  | 2020 |
| Federal: |  |   |  |   |  |   |
| Current |  | $ | 179,840  |  |  | $ | 135,216  |  |  | $ | 53,942  |  |
| Deferred |  | 14,115  |  |  | (4,259) |  |  | 21,019  |  |
|   |  | 193,955  |  |  | 130,957  |  |  | 74,961  |  |
| State: |  |   |  |   |  |   |
| Current |  | 33,078  |  |  | 34,302  |  |  | 12,095  |  |
| Deferred |  | 1,689  |  |  | (3,489) |  |  | 565  |  |
|   |  | 34,767  |  |  | 30,813  |  |  | 12,660  |  |
| International: |  |   |  |   |  |   |
| Current |  | 23,247  |  |  | 23,575  |  |  | 13,333  |  |
| Deferred |  | (1,145) |  |  | 6  |  |  | (22) |  |
|   |  | 22,102  |  |  | 23,581  |  |  | 13,311  |  |
| Income tax expense |  | $ | 250,824  |  |  | $ | 185,351  |  |  | $ | 100,932  |  |

  
A reconciliation of the expected U.S. statutory tax rate to the actual effective income tax rate is as follows:

|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  |  | Year Ended July 31, |
| (In thousands) |  | 2022 |  | 2021 |  | 2020 |
| Federal statutory rate |  | 21.0  | % |  | 21.0  | % |  | 21.0  | % |
| State income taxes, net of federal income tax benefit |  | 1.3  | % |  | 1.5  | % |  | 1.6  | % |
| International rate differential |  | (0.5) | % |  | (0.5) | % |  | 0.1  | % |
| Compensation and fringe benefits (1) |  | (0.6) | % |  | (1.9) | % |  | (11.2) | % |
| FDII and/or GILTI |  | (2.8) | % |  | (3.1) | % |  | (0.3) | % |
| Federal return to provision adjustment |  | 0.6  | % |  | (1.8) | % |  | —  | % |
| Federal amended return adjustment |  | (1.3) | % |  | —  | % |  | —  | % |
| Other differences |  | 1.0  | % |  | 1.3  | % |  | 1.4  | % |
| Effective tax rate |  | 18.7  | % |  | 16.5  | % |  | 12.6  | % |

(1)Included in the compensation and fringe benefits rate reconciliation is the impact of the Company’s adoption of ASU No. 2016-09, Improvements to Employee Share-Based Payment Accounting. Under this standard, all excess tax benefits and tax deficiencies related to exercises of stock options are recognized as income tax expense or benefit in the income statement as discrete items in the reporting period in which they occur.   
80
