INCOME TAXES:

12 Months Ended

Mar. 31, 2012

INCOME TAXES:

INCOME TAXES:

13.          INCOME TAXES:

Total income tax expense (benefit) was allocated as follows (dollars in thousands):

	2012		2011		2010
Income from continuing operations	$	29,129	$	31,726	$	32,060
Income from discontinued operations	19,388		2,351		539
Stockholders’ equity:
Tax expense of stock options, warrants and restricted stock	1,310		316		683
	$	49,827	$	34,393	$	33,282

Income tax expense (benefit) attributable to earnings from continuing operations consists of (dollars in thousands):

	2012			2011			2010
Current:
U.S. Federal	$	22,919		$	10,860		$	(284	)
Non-U.S.	295			176			351
State	3,687			2,111			(817		)
	26,901			13,147			(750		)
Deferred:
U.S. Federal	900			19,477			31,641
Non-U.S.	2,359			(264		)	(1,056		)
State	(1,031		)	(634		)	2,225
	2,228			18,579			32,810
Total	$	29,129		$	31,726		$	32,060

In fiscal year 2012, the Company recorded additional valuation allowances for deferred tax assets in a foreign jurisdiction of $5.2 million due to management’s reassessment of projections for the subsidiary.  In fiscal 2010, the Company reversed valuation allowances previously recorded for certain deferred tax assets, resulting in a deferred tax benefit of $1.1 million.

Earnings (loss) before income tax attributable to U.S. and non-U.S. continuing operations consist of (dollars in thousands):

	2012			2011			2010
U.S.	$	100,051		$	93,503		$	86,236
Non-U.S.	(33,305		)	(93,615		)	(10,749		)
Total	$	66,746		$	(112	)	$	75,487

Earnings before income taxes, as shown above, are based on the location of the entity to which such earnings are attributable.  However, since such earnings may be subject to taxation in more than one country, the income tax provision shown above as U.S. or non-U.S. may not correspond to the earnings shown above.

Below is a reconciliation of income tax expense (benefit) computed using the U.S. federal statutory income tax rate of 35% of earnings before income taxes to the actual provision for income taxes (dollars in thousands) for continuing operations:

	2012			2011			2010
Computed expected tax expense (benefit)	$	23,361		$	(39	)	$	26,420
Increase (reduction) in income taxes resulting from:
State income taxes, net of federal benefit, exclusive of benefit of reduction in valuation reserves	1,672			1,892			2,083
Reserves for tax items	37			(3,336		)	1,015
Research, experimentation and other tax credits	(555		)	(561		)	(1,167		)
Impairment of goodwill and intangibles not deductible for tax	5,031			28,006			—
Permanent differences between book and tax expense	(9,507		)	(58		)	1,967
Non-U.S. subsidiaries taxed at other than 35%, including adjustments to valuation reserves	8,887			4,409			1,655
Adjustment to U.S. valuation reserves	(619		)	1,312			(1,149		)
Other, net	822			101			1,236
	$	29,129		$	31,726		$	32,060

Below is a reconciliation of income tax expense (benefit) computed using the U.S. federal statutory income tax rate of 35% of earnings before income taxes to the actual provision for income taxes (dollars in thousands) for discontinued operations:

	2012		2011		2010
Computed expected tax expense (benefit)	$	18,650	$	2,012	$	445
Increase (reduction) in income taxes resulting from:
State income taxes, net of federal benefit, exclusive of benefit of reduction in valuation reserves	737		187		41
Other, net	1		152		53
	$	19,388	$	2,351	$	539

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities at March 31, 2012 and 2011 are presented below.  In accordance with income tax accounting standards, as of March 31, 2012 the Company has not recognized deferred income taxes on approximately $33.2 million of undistributed earnings of foreign subsidiaries that are indefinitely reinvested outside the respective parent’s country.  Calculation of the deferred income tax related to these earnings is not practicable.

(dollars in thousands)	2012			2011
Deferred tax assets:
Accrued expenses not currently deductible for tax purposes	$	11,228		$	12,531
Revenue recognized for tax purposes in excess of revenue for financial reporting purposes	3,878			1,718
Investments, principally due to differences in basis for tax and financial reporting purposes	—			2,050
Net operating loss and tax credit carryforwards	51,153			51,489
Other	10,410			13,554
Total deferred tax assets	76,669			81,342
Less valuation allowance	39,083			36,377
Net deferred tax assets	37,586			44,965
Deferred tax liabilities:
Intangible assets, principally due to differences in amortization	$	(64,798	)	$	(68,140	)
Costs capitalized for financial reporting purposes in excess of amounts capitalized for tax purposes	(26,072		)	(33,339		)
Property and equipment, principally due to differences in depreciation	(24,648		)	(15,366		)
Total deferred tax liabilities	(115,518		)	(116,845		)
Net deferred tax liability	$	(77,932	)	$	(71,880	)

At March 31, 2012, the Company has net operating loss carryforwards of approximately $15.4 million and $77.0 million for U.S. federal and state income tax purposes, respectively.  These net operating loss carryforwards expire in various amounts from 2012 through 2030.  The Company has foreign net operating loss carryforwards of approximately $138.5 million. Of this amount, $132.4 million do not have expiration dates.  The remainder expires in various amounts through 2017.

In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized.  The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible.  Based upon the Company’s history of profitability and taxable income and the reversal of taxable temporary differences in the U.S., management believes that with the exception of carryforwards in certain states it is more likely than not the Company will realize the benefits of these deductible differences.  The Company has established valuation allowances against $38.2 million of loss carryforwards in the states where activity does not support the deferred tax asset.

Based upon the Company’s history of losses in certain non-U.S. jurisdictions, management believes it is more likely than not the Company will not realize the benefits of certain foreign carryforwards and has established valuation allowances for substantial portions of its foreign deferred assets.  The goodwill recorded related to the purchase of certain non-U.S. based subsidiaries includes valuation allowances recorded against their deferred tax assets because these companies had not yet demonstrated consistent and/or sustainable profitability.

The following table sets forth changes in the total gross unrecognized tax benefit liabilities, including accrued interest, for the years ended March 31, 2012 and 2011.  The entire liability, if recognized, would reduce the Company’s effective income tax rate in future periods.

(dollars in thousands)	2012			2011			2010
Balance at beginning of period	$	3,043		$	6,379		$	5,364
Additions based on tax positions related to the current year	189			360			566
Reduction due to lapsing of statute of limitations	(94		)	(3,460		)	—
Adjustments to tax positions taken in prior years	(29		)	(236		)	449
Balance at end of period included in other liabilities	$	3,109		$	3,043		$	6,379

The Company reports accrued interest and penalties related to unrecognized tax benefits in income tax expense.  For the fiscal year ended March 31, 2012, the Company recognized $0.1 million of tax-related interest expense and penalties and had $0.5 million of accrued interest and penalties at March 31, 2012.  During the fiscal year ended March 31, 2012, the expiration of the statute of limitations resulted in a reduction to the unrecognized tax benefits related to certain tax credits by approximately $0.1 million.

The Company files a consolidated U.S. federal income tax return and tax returns in various state and local jurisdictions.  The Company’s subsidiaries also file tax returns in various foreign jurisdictions in which it operates.  In the U.S., the statute of limitations for Internal Revenue Service examinations remains open for the Company’s federal income tax returns for fiscal years subsequent to 2008. The status of state and local and foreign tax examinations varies by jurisdiction.  The Company does not anticipate any material adjustments to its financial statements resulting from tax examinations currently in progress.