Income Taxes

6 Months Ended

Dec. 31, 2012

Income Taxes [Abstract]

Income Taxes

5.   INCOME TAXES

In determining the quarterly provision for income taxes, the Company uses an estimated annual effective tax rate, which is based on the expected annual income, statutory tax rates and tax planning opportunities available to the Company in the various jurisdictions in which it operates. This includes recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns to the extent pervasive evidence exists that they will be realized in future periods. The deferred tax balances are adjusted to reflect tax rates by tax jurisdiction, based on currently enacted tax laws, which are expected to be in effect in the years in which the temporary differences are expected to reverse. In accordance with the Company’s income tax policy, significant or unusual items are separately recognized in the quarter in which they occur.

The components of the gross liabilities related to unrecognized tax benefits and the related deferred tax assets are as follows:

(in thousands)	December 31,		June 30,
	2012		2012
Gross unrecognized tax benefits	$	1,100	$	1,000
Accrued interest and penalties		445		365
Gross liabilities related to unrecognized tax benefits	$	1,545	$	1,365
Deferred tax assets	$	405	$	350

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

(in thousands)		December 31,		June 30,
		2012		2012
Balance at July 1	$	1,000	$	970
Additions based on tax positions related to the current year		135		207
Additions for tax positions of prior years		20		0
Reductions for tax positions of prior years		(55)		(177)
Ending Balance	$	1,100	$	1,000

The recognition of the above amounts would impact the Company’s effective tax rate.  The Company does not expect that there will be any positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly increase or decrease within twelve months. The Company records interest and penalties related to income taxes as income tax expense in the Consolidated Statements of Income.