INCOME TAXES

12 Months Ended

Jun. 30, 2011

INCOME TAXES

INCOME TAXES

13. INCOME TAXES

        For financial reporting purposes, income before income taxes includes the following components:

	Fiscal Years Ended June 30,
	2011		2010			2009
	(Amounts in thousands)
United States	$	77,543	$	55,623		$	65,848
Foreign		38,730		(12,037	)		(2,634	)
	$	116,273	$	43,586		$	63,214

        The Company's Income tax expense consisted of:

	Fiscal Years Ended June 30,
	2011			2010			2009
	(Amounts in thousands)
Current:
Federal	$	28,783		$	20,299		$	23,625
State		105			219			402
Foreign		15,222			1,182			—
	$	44,110		$	21,700		$	24,027
Deferred and others:
Federal	$	(1,242	)	$	(1,304	)	$	(2,396	)
State		—			(114	)		27
Foreign		(3,894	)		(6,118	)		199
	$	(5,136	)	$	(7,536	)	$	(2,170	)
Total income tax expense	$	38,974		$	14,164		$	21,857

        The provision for income taxes for the fiscal years ended June 30, 2011, 2010 and 2009, differs from the amount of income tax determined by applying the applicable United States statutory federal income tax rate to pre-tax income (net of minority interest in income of consolidated subsidiary and loss from equity investment) from operations as a result of the following differences:

	Fiscal Years Ended June 30,
	2011			2010			2009
	(Amounts in thousands)
Total expense computed by applying federal rates	$	40,695		$	15,255		$	22,125
State and Provincial income taxes, net of federal benefit		105			189			288
Adjustments of valuation allowance		(346	)		(231	)		783
Excess depletion		(1,446	)		(1,642	)		(1,074	)
Acquisition related costs		—			1,364			—
Estimates for uncertain tax positions		437			1,568			—
Statutory tax attributable to Non-controlling interest		(2,066	)		(2,775	)		(1,053	)
Unrealized foreign exchange gains (losses)		2,548			(280	)		—
Effect of foreign earnings		(891	)		915			—
Other		(62	)		(199	)		788
	$	38,974		$	14,164		$	21,857

        The tax effects of temporary differences and carryforwards, which give rise to our deferred tax assets and liabilities at June 30, 2011 and 2010, are as follows:

	2011			2010
	(Amounts in thousands)
Deferred tax assets:
Stock-based compensation	$	3,275		$	3,267
Net operating losses		32,157			25,936
Other		5,028			4,963
Total deferred tax assets		40,460			34,166
Valuation allowance		(3,069	)		(3,415	)
Net deferred tax assets		37,391			30,751
Deferred tax liabilities:
Mineral property basis		(179,344	)		(181,740	)
Unrealized foreign exchange gains		(5,932	)		(3,751	)
Other		(3,112	)		(1,107	)
Total deferred tax liabilities		(188,388	)		(186,598	)
Total net deferred taxes	$	(150,997	)	$	(155,847	)

        The Company reviews the measurement of its deferred tax assets at each balance sheet date. All available evidence, both positive and negative, is considered in determining whether, based upon the weight of the evidence, it is more likely than not that some portion or all of the deferred tax asset will not be realized. As of June 30, 2011 and 2010, the Company had $3.1 million and $3.4 million of valuation allowances recorded, respectively. The valuation allowance decrease of $0.3 million was primarily the result of net operating losses and other deferred tax assets that were recognized or met the recognition criteria during the year. The decreases were offset by an increase to the valuation allowance for non-deductible depletion in non-U.S. jurisdictions where no plan is available to recognize the deferred tax asset in the foreseeable future. The valuation allowance remaining at June 30, 2010 is primarily attributable to the tax basis difference as a result of non-deductible depletion.

        At June 30, 2011 and 2010, the Company had $127 million and $110 million of net operating loss carry forwards, respectively. The increase in the net operating loss carry forwards is attributable to (i) non-U.S. subsidiaries accounting losses of $23 million incurred during the year, (ii) non-U.S. subsidiaries accelerated tax deductions of $6 million for the year which have an offsetting deferred tax liability recorded, and (iii) offset by the utilization of net operating losses in non-U.S. subsidiaries of $13 million. The majority of the tax loss carry forwards are in jurisdictions that allow a twenty year carry forward period. As a result, these losses do not begin to expire until the 2025 tax year.

        As of June 30, 2011 and 2010, the Company had $18.8 million and $12.5 million of total gross unrecognized tax benefits, respectively. The increase in gross unrecognized tax benefits was primarily related to tax positions of IRC entities taken prior to the acquisition. If recognized, these unrecognized tax benefits would impact the Company's effective income tax rate. A reconciliation of the beginning and ending amount of gross unrecognized tax benefits is as follows:

	2011		2010		2009
	(Amounts in thousands)
Total gross unrecognized tax benefits at beginning of year	$	12,479	$	614	$	410
Additions / Reductions for tax positions of prior years		20		749		28
Additions / Reductions for tax positions of current year		6,337		11,116		176
Total amount of gross unrecognized tax benefits at end of year	$	18,836	$	12,479	$	614

        Approximately $5.9 million of the increase in the unrecognized tax benefits for tax positions during fiscal year 2011 is included in tax expense computed by applying federal rates in the tax rate reconciliation as the unrecognized tax benefit is recorded on additional pre-tax income from non-U.S. subsidiaries.

        The Company or one of its subsidiaries files income tax returns in the U.S. federal jurisdiction, and various state and foreign jurisdictions. With few exceptions, the Company is no longer subject to U.S. Federal, state and local, and non-U.S. income tax examinations by tax authorities for fiscal years before 2007. As a result of (i) statute of limitations that will begin to expire within the next 12 months in various jurisdictions, and (ii) possible settlements of audit-related issues with taxing authorities in various jurisdictions with respect to which none of the issues are individually significant, the Company believes that it is reasonably possible that the total amount of its net unrecognized income tax benefits will decrease between $0 and $1.6 million in the next 12 months.

        The Company's continuing practice is to recognize interest and/or penalties related to unrecognized tax benefits as part of its income tax expense. At June 30, 2011 and 2010, the amount of accrued income-tax-related interest and penalties was $1.5 million and $0.6 million, respectively.