11. INCOME TAXES

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

	Fiscal Years Ended June 30,

	2013		2012		2011
	(Amounts in thousands)
United States	$	65,851	$	110,189	$	77,543
Foreign		71,317		42,830		38,730

	$	137,168	$	153,019	$	116,273

The Company's Income tax expense consisted of:

	Fiscal Years Ended June 30,

	2013			2012		2011
	(Amounts in thousands)
Current:
Federal	$	30,061		$	35,556	$	28,783
State		368			310		105
Foreign		44,749			17,273		15,222

	$	75,178		$	53,139	$	44,110

Deferred and others:
Federal	$	(4,341	)	$	77	$	(1,242	)
State		(27	)		—		—
Foreign		(7,051	)		1,494		(3,894	)

	$	(11,419	)	$	1,571	$	(5,136	)

Total income tax expense	$	63,759		$	54,710	$	38,974

The provision for income taxes for the fiscal years ended June 30, 2013, 2012 and 2011, 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,

	2013			2012			2011
	(Amounts in thousands)
Total expense computed by applying federal rates	$	48,009		$	53,557		$	40,695
State and provincial income taxes, net of federal benefit		368			310			105
Adjustments of valuation allowance		—			(1,007	)		(346	)
Excess depletion		(1,395	)		(1,416	)		(1,446	)
Estimates for uncertain tax positions		1,868			551			437
Statutory tax attributable to non-controlling interest		(1,236	)		(2,042	)		(2,066	)
Effect of foreign earnings		4,223			511			(891	)
Effect of recognized loss on available-for-sale securities		4,239			—			—
Unrealized foreign exchange gains		1,146			(546	)		2,548
True up of prior year tax returns		4,979			—			—
True up of prior year deferred assets		—			1,075			—
Excess 162(m) compensation		1,272			1,116			215
Other		286			2,601			(277	)

	$	63,759		$	54,710		$	38,974

The tax effects of temporary differences and carryforwards, which give rise to our deferred tax assets and liabilities at June 30, 2013 and 2012, are as follows:

	2013			2012

	(Amounts in thousands)
Deferred tax assets:
Stock-based compensation	$	3,853		$	3,984
Net operating losses		25,943			23,815
Other		4,460			2,615

Total deferred tax assets		34,256			30,414
Valuation allowance		(4,606	)		(500	)

Net deferred tax assets	$	29,650		$	29,914

Deferred tax liabilities:
Mineral property basis	$	(165,936	)	$	(172,146	)
Unrealized foreign exchange gains		(3,684	)		(4,414	)
2019 Notes		(23,281	)		(27,126	)
Other		(3,561	)		(4,117	)

Total deferred tax liabilities		(196,462	)		(207,803	)

Total net deferred taxes	$	(166,812	)	$	(177,889	)

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, 2013 and 2012, the Company had $4.6 million and $0.5 million of valuation allowances recorded, respectively. The valuation allowance increase of $4.1 million was primarily the result of (i) the recognized and unrealized loss on available-for-sale securities, and (ii) the change in foreign exchange rates. The valuation allowance remaining at June 30, 2013 is primarily attributable to deferred tax asset generated by the recognized loss on available-for-sale securities and the tax basis difference as a result of unrealized losses on foreign exchange.

At June 30, 2013 and 2012, the Company had $108 million and $95 million of net operating loss carry forwards, respectively. The increase in the net operating loss carry forwards is attributable to (i) losses incurred in a non-U.S. subsidiary, and (ii) an increase in losses at non-U.S. subsidiaries resulting from the annual provision-to-return true-up, slightly offset by the utilization of net operating losses in non-U.S. subsidiaries of $26 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, 2013 and 2012, the Company had $21.2 million and $19.5 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 positively impact the Company's effective income tax rate. A reconciliation of the beginning and ending amount of gross unrecognized tax benefits is as follows:

	2013			2012			2011

	(Amounts in thousands)
Total gross unrecognized tax benefits at beginning of year	$	19,469		$	18,836		$	12,479
Additions / Reductions for tax positions of prior years		—			—			20
Additions / Reductions for tax positions of current year		2,638			2,051			6,337
Reductions due to settlements with taxing authorities		(941	)		—			—
Reductions due to lapse of statute of limitations		—			(1,418	)		—

Total amount of gross unrecognized tax benefits at end of year	$	21,166		$	19,469		$	18,836

Approximately $1.1 million of the increase in the unrecognized tax benefits for tax positions during fiscal year 2013 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 2009. 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 decrease between $0 and $0.3 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, 2013 and 2012, the amount of accrued income-tax-related interest and penalties was $4.3 million and $2.8 million, respectively.

During the quarter ended December 31, 2012, the Company made a foreign withholding tax payment associated with one of its foreign royalty interests of approximately $17.2 million. During the quarter ended March 31, 2013, the Company recovered approximately $8.5 million of the foreign withholding tax payment, and we expect to recover the remaining payment within the next twelve months. As of June 30, 2013, $8.7 million is recorded within Income tax receivable on our consolidated balance sheets.

During the quarter ended June 30, 2013, the Company incurred additional foreign withholding tax obligations, which is included in Foreign withholding taxes payable on our consolidated balance sheets, on another of its foreign royalty interests of approximately $12.0 million, of which approximately $2.3 million has been recovered. The Company expects to recover the remaining payments within the next twelve months. As of June 30, 2013, $9.7 million is recorded within Prepaid expenses and other current assets on our consolidated balance sheets.