INCOME TAXES

12 Months Ended

Jun. 30, 2012

INCOME TAXES

INCOME TAXES

13. INCOME TAXES

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

	Fiscal Years Ended June 30,
	2012		2011		2010
	(Amounts in thousands)
United States	$	110,189	$	77,543	$	55,623
Foreign		42,830		38,730		(12,037	)
	$	153,019	$	116,273	$	43,586

        The Company's Income tax expense consisted of:

	Fiscal Years Ended June 30,
	2012		2011			2010
	(Amounts in thousands)
Current:
Federal	$	35,556	$	28,783		$	20,299
State		310		105			219
Foreign		17,273		15,222			1,182
	$	53,139	$	44,110		$	21,700
Deferred and others:
Federal	$	77	$	(1,242	)	$	(1,304	)
State		—		—			(114	)
Foreign		1,494		(3,894	)		(6,118	)
	$	1,571	$	(5,136	)	$	(7,536	)
Total income tax expense	$	54,710	$	38,974		$	14,164

        The provision for income taxes for the fiscal years ended June 30, 2012, 2011 and 2010, 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,
	2012			2011			2010
	(Amounts in thousands)
Total expense computed by applying federal rates	$	53,557		$	40,695		$	15,255
State and Provincial income taxes, net of federal benefit		310			105			189
Adjustments of valuation allowance		(1,007	)		(346	)		(231	)
Excess depletion		(1,416	)		(1,446	)		(1,642	)
Acquisition related costs		—			—			1,364
Estimates for uncertain tax positions		551			437			1,568
Statutory tax attributable to Non-controlling interest		(2,042	)		(2,066	)		(2,775	)
Unrealized foreign exchange gains (losses)		(546	)		2,548			(280	)
Effect of foreign earnings		511			(891	)		915
True-up of prior year deferred assets		1,075			—			—
Excess 162(m) compensation		1,116			215			62
Other		2,601			(277	)		(261	)
	$	54,710		$	38,974		$	14,164

        The tax effects of temporary differences and carryforwards, which give rise to our deferred tax assets and liabilities at June 30, 2012 and 2011, are as follows:

	2012			2011
	(Amounts in thousands)
Deferred tax assets:
Stock-based compensation	$	3,984		$	3,275
Net operating losses		23,815			32,157
Other		2,615			5,028
Total deferred tax assets		30,414			40,460
Valuation allowance		(500	)		(3,069	)
Net deferred tax assets		29,914			37,391
Deferred tax liabilities:
Mineral property basis		(172,146	)		(179,344	)
Convertible notes due 2019		(27,126	)		—
Unrealized foreign exchange gains		(4,414	)		(5,932	)
Other		(4,117	)		(3,112	)
Total deferred tax liabilities		(207,803	)		(188,388	)
Total net deferred taxes	$	(177,889	)	$	(150,997	)

        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, 2012 and 2011, the Company had $0.5 million and $3.1 million of valuation allowances recorded, respectively. The valuation allowance decrease of $2.6 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 and the change in foreign exchange rates. The valuation allowance remaining at June 30, 2012 is primarily attributable to the tax basis difference as a result of unrealized losses on foreign exchange.

        At June 30, 2012 and 2011, the Company had $95 million and $127 million of net operating loss carry forwards, respectively. The decrease in the net operating loss carry forwards is attributable to (i) non-U.S. subsidiaries accounting income of $43 million generated during the year, (ii) non-U.S. subsidiaries accelerated tax deductions of $11 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 $32 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, 2012 and 2011, the Company had $19.5 million and $18.8 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:

	2012			2011		2010
	(Amounts in thousands)
Total gross unrecognized tax benefits at beginning of year	$	18,836		$	12,479	$	614
Additions / Reductions for tax positions of prior years		—			20		749
Additions / Reductions for tax positions of current year		2,051			6,337		11,116
Reductions due to lapse of statute of limitations		(1,418	)		—		—
Total amount of gross unrecognized tax benefits at end of year	$	19,469		$	18,836	$	12,479

        Approximately $0.9 million of the increase in the unrecognized tax benefits for tax positions during fiscal year 2012 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 2008. As a result of (i) statute of limitations that will begin to expire within the next 12 months in various jurisdictions, (ii) possible settlements of audit-related issues with taxing authorities in various jurisdictions with respect to which none of the issues are individually significant, and (iii) and additional accrual of exposure and interest on existing items the Company believes that it is reasonably possible that the total amount of its net unrecognized income tax benefits will increase between $1.0 million and $1.5 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, 2012 and 2011, the amount of accrued income-tax-related interest and penalties was $2.8 million and $1.5 million, respectively.