Note N – Income Taxes

The effective tax rate for the three and six months ended January 31, 2014, was 22.1 percent and 27.6 percent, respectively. The effective tax rate for the three and six months ended January 31, 2013, was 28.3 percent and 28.9 percent, respectively. The decrease in our effective tax rate for the three months and six months ended January 31, 2014, was primarily due to a $6.4 million tax benefit recorded in the second quarter of the current year associated with the favorable settlement of a tax audit. The decrease in rate as compared to the three months ended January 31, 2013, was partially offset by non-recurring tax benefits recorded during the prior year quarter primarily related to the expiration of some statutes of limitations and the retroactive reinstatement of the Research and Experimentation Credit in the United States. The decrease in rate as compared to the six months ended January 31, 2013, was partially offset by a $2.1 million tax expense related to an intercompany dividend recorded during the first quarter of Fiscal 2014 and non-recurring tax benefits recorded during the prior year six-month period primarily related to the expiration of some statutes of limitations, the retroactive reinstatement of the Research and Experimentation Credit in the United States, and the tax impact of foreign dividend distributions.

The Company’s uncertain tax positions are affected by the tax years that are under audit or remain subject to examination by the relevant taxing authorities. The following tax years, in addition to the current year, remain subject to examination, at least for certain issues, by the major tax jurisdictions indicated:


Major Jurisdictions	Open Tax Years
Australia	2009 through 2013
Belgium	2011 through 2013
China	2003 through 2013
Czech Republic	2005 through 2013
France	2011 through 2013
Germany	2009 through 2013
Italy	2003 through 2013
Japan	2012 through 2013
Mexico	2008 through 2012
Thailand	2005 through 2013
United Kingdom	2012 through 2013
United States	2013

At January 31, 2014, the total unrecognized tax benefits were $13.5 million and accrued interest and penalties on these unrecognized tax benefits were $1.0 million. The Company recognizes accrued interest related to unrecognized tax benefits in income tax expense. If the Company were to prevail on all unrecognized tax benefits recorded, substantially all of the unrecognized tax benefits would benefit the effective tax rate. With an average statute of limitations of about 5 years, up to $1.1 million of the unrecognized tax benefits could potentially expire in the next 12 month period unless extended by an audit. It is possible that quicker than expected settlement of either current or future audits and disputes would cause additional reversals of previously recorded reserves in the next 12 month period. Currently, the Company has approximately $0.2 million of unrecognized tax benefits that are in formal dispute with various taxing authorities related to transfer pricing and deductibility of expenses. Quantification of an estimated range and timing of future audit settlements cannot be made at this time.