October 4, 2019

DBRS benefited from tax assets in its P&L – was this a one-off? What is the tax rate for the group going forwards? The pro-forma P&L has a 16% effective tax rate – is this too low?

Purchase accounting effects also impact the effective tax rates presented in the pro formas. In the full year period ended December 31, 2018, the effective tax rate for the consolidated entity was 16.3%. In the six-month period ended June 30, 2019, our combined effective tax rate was 22.5%. We believe the latter period is a better representation of the go-forward tax rate, which isn’t very different from the mid-20s tax rate we referenced in our March 12, 2018 8-K when we answered another investor’s question about tax rates following implementation of the Tax Cuts and Jobs Act.

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