The increases in interest and other financing expenses in the third quarter and first nine months of fiscal 2023 compared to the third quarter and first nine months of fiscal 2022 is primarily a result of higher outstanding borrowings and increases in average borrowing rates during the first nine months of fiscal 2023 as compared to the first nine months of fiscal 2022.
Gain on Legal Settlements
During the first nine months of fiscal 2023, the Company recorded a gain on legal settlements of $61.7 million before tax, $47.2 million after tax, and $0.51 per share on a diluted basis, in connection with the settlement of claims filed against certain manufacturers of capacitors.
Income Tax
The below discussion of the effective tax rate for the periods presented in the statements of operations is in comparison to the 21% U.S. statutory federal income tax rate.
The Company’s effective tax rate on its income before taxes was 23.1% in the third quarter of fiscal 2023. During the third quarter of fiscal 2023, the Company’s effective tax rate was unfavorably impacted primarily by (i) U.S state taxes and (ii) the mix of income in higher tax jurisdictions, partially offset by (iii) decreases to unrecognized tax benefit reserves net of settlements.
During the third quarter of fiscal 2022, the Company’s effective tax rate on its income before taxes was 26.0%. During the third quarter of fiscal 2022, the Company’s effective tax rate was unfavorably impacted primarily by the mix of income in higher tax jurisdictions.
For the first nine months of fiscal 2023, the Company’s effective tax rate on its income before taxes was 22.3%. The effective tax rate for the first nine months of fiscal 2023 was unfavorably impacted primarily by (i) the mix of income in higher tax jurisdictions and (ii) U.S. state taxes, partially offset by (iii) decreases to unrecognized tax benefit reserves net of settlements.
During the first nine months of fiscal 2022, the Company’s effective tax rate on its income before taxes was 23.8%. The effective tax rate for the first nine months of fiscal 2022 was unfavorably impacted primarily by (i) the mix of income in higher tax jurisdictions and (ii) increases to valuation allowances.
Net Income
As a result of the factors described in the preceding sections of this MD&A, the Company’s net income for the third quarter of fiscal 2023 was $187.4 million, or $2.03 per share on a diluted basis, as compared with $183.4 million, or $1.84 per share on a diluted basis, in the third quarter of fiscal 2022.
As a result of the factors described in the preceding sections of this MD&A, the Company’s net income for the first nine months of fiscal 2023 was $615.6 million, or $6.58 per share on a diluted basis, as compared with $445.6 million, or $4.44 per share on a diluted basis, in the first nine months of fiscal 2022.
LIQUIDITY AND CAPITAL RESOURCES
Cash Flow
Cash Flow from Operating Activities
During the first nine months of fiscal 2023, the Company used $948.2 million of cash flow for operations compared to $19.4 million of cash used for operations in the first nine months of fiscal 2022. These operating cash flows were comprised of: (i) cash flow generated from net income, adjusted for the impact of non-cash and other items, which includes depreciation and amortization expenses, deferred income taxes, stock-based compensation expense,