Question-and-Answer Session
Operator
(Operator Instructions). And first we’ll go to the line of John Neff with William Blair. Please go ahead.
John Neff - William Blair
Hey, guys.
Andy Florance
Hi, John. How are you doing?
John Neff - William Blair
Good. A couple of questions here for you just a little bit on the PPR acquisition, any impact there on the retention rates that you reported? In other words, is that an organic number?
Andy Florance
Yes. The retention rate is all organic. It doesn’t factor anything from the PPR’s deal.
Brian Radecki
And the PPR deal, just on a side note is almost - they’re running almost at the identical numbers that we are. So it is pretty much identical.
John Neff - William Blair
Right. The tax rate, Brian, just a little more detail there, is it now - I think of the U.K. as having a lower corporate tax rate than the United States. So is it suddenly advantageous to have some of the U.K. operations in the U.S. tax jurisdiction? Is that an indictment of future U.K. profitability? And is this change permanent? In other words, what sort of effective tax rate can we expect perhaps even next year?
Brian Radecki
Sure. We’re not giving guidance on next year, but as we all know, in taxes nothing is permanent. The tax rules change daily. But what I can say is that, if you look at how we utilized - we utilized almost $100 million of NOLs over the history of the company. When we just completed that I was told by several tax partners that we were one of the few public companies that actually utilize all of their NOLs.
We’re now taking advantage of utilizing the NOLs over in the U.K. from the losses there by moving that entity under the U.S. for tax purposes. So it’s not - it doesn’t give any indication of what plans are internationally, but it’s just allowing us to utilize those now because you don’t have profits in the U.K. where you can utilize those NOLs at those lower rates that you have. So you are able to utilize them now to offset higher U.S. tax rates.
So this is a tax planning strategy. It’s a small benefit in the quarter but, to me, the more exciting thing is the possible cash tax savings we’re going to have over the next five to seven years from this, which is real.
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