# Other Income (Expense), Net

Fiscal Years Ended November 30,	Percent Change
2018	2017	2016	2018 to 2017	2017 to 2016
(in thousands)
Other income (expense), net	$ (8,984)	$ 1,123	$ 5,461	(900.0)%	79.4%
Percentage of revenue	(0.04)%	0.01%	0.04%

Amounts recorded as other income (expense), net include foreign currency transaction gains and losses, other than cash flow hedges, investment gains and losses, non-service component of pension costs, debt extinguishment gains and losses and other non-operating gains and losses, such as changes in the fair value of convertible debt conversion spread, and settlements received from class actions lawsuits.

Other income (expense), net decreased from net other income in fiscal year 2017 to net other (expense) in fiscal year 2018, primarily due to the adverse impact from changes in foreign currency exchange rates of \$16.6 million, mainly in our Latin American businesses and an increase in the non-service component of pensions costs due to the acquisition of Convergys. These losses and expenses were partially offset by gains of \$10.0 million related to changes in the fair value of the conversion spread of convertible debentures assumed in connection with the acquisition of Convergys and extinguishment gains on settlement of certain of those debentures. These losses were also partially offset by a gain of \$2.8 million recognized upon reclassification of a cost-method investment as a trading security.

The decrease in other income (expense), net in fiscal year 2017, compared to fiscal year 2016, was primarily due to a \$5.0 million benefit received from class-action legal settlements in our Technology Solutions segment.

# Provision for Income Taxes

Fiscal Years Ended November 30,	Percent Change
2018	2017	2016	2018 to 2017	2017 to 2016
(in thousands)
Provision for income taxes	$ 156,779	$ 163,558	$ 121,059	(4.1)%	35.1%
Percentage of income before income taxes	34.28%	35.19%	34.00%

Income taxes consist of our current and deferred tax expense resulting from our income earned in domestic and foreign jurisdictions.

The Tax Cuts and Jobs Act of 2017 (the “TCJA”) provides for significant changes to the U.S. Internal Revenue Code of 1986, as amended, including lowering the U.S. federal corporate income tax rate from 35% to 21%, implementing a territorial tax system, imposing a one-time tax on foreign unremitted earnings and setting limitations on deductibility of certain costs (e.g., interest expense), among other things. Accordingly, we recorded a net adjustment of \$33.1 million related to the TCJA during fiscal year 2018. This adjustment included a \$59.8 million of transition tax expense for mandatory repatriation, partially offset by a \$26.7 million of tax benefit from the remeasurement of our net deferred tax balance to the new U.S. tax rate enacted under the TCJA.

Excluding the impact of the adjustments related to the TCJA, our effective tax rate during fiscal year 2018 was 27.04%. The current year tax rate is lower compared to the prior year, primarily due to the impact of the lower tax rate under the TCJA. The decrease in tax rate was also due to the mix of taxable income in different geographic regions and the impact of the Convergys acquisition.

The differences in our effective tax rates between fiscal years 2017 and 2016 was primarily due to the mix of taxable income in different geographic regions and, to a lesser extent, the reversal of certain tax reserves as a result of the expiration of the statute of limitations in certain tax jurisdiction.

Further information on the treatment of undistributed foreign earnings and a reconciliation of the federal statutory income tax rate to our effective tax rate can be found in Note 16 of the Consolidated Financial Statements included in Part II, Item 8 of this Report.