INCOME TAXES

6 Months Ended

Dec. 31, 2012

INCOME TAXES

INCOME TAXES

9.             INCOME TAXES

	Three Months Ended						Six Months Ended
	December 31,			December 31,			December 31,			December 31,
	2012			2011			2012			2011
	(Amounts in thousands, except rate)						(Amounts in thousands, except rate)
Income tax expense	$	16,315		$	14,051		$	32,776		$	26,433
Effective tax rate	37.2		%	36.7		%	38.3		%	34.4		%

The increase in the effective tax rate for the three months ended December 31, 2012, is primarily related to an increase in current year tax expense from changes in estimates of uncertain tax positions.  The increase in the effective tax rate for the six months ended December 31, 2012, is primarily attributable to (i) an increase in tax expense recognized in certain foreign subsidiaries without a corresponding U.S. foreign tax credit benefit, (ii) an increase in current year tax expense from changes in estimates of uncertain tax positions, and (iii) the prior year decrease in tax expense from changes in estimates of uncertain tax positions.

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 of December 31, 2012 and June 30, 2012, the Company had $19.8 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 International Royalty Corporation entities taken prior to or upon the acquisition by the Company during fiscal year 2010.  If recognized, these unrecognized tax benefits would impact the Company’s effective income tax rate.

The Company’s continuing practice is to recognize potential interest and/or penalties related to unrecognized tax benefits as part of its income tax expense.  At December 31, 2012 and June 30, 2012, the amount of accrued income-tax-related interest and penalties was $3.3 million and $2.8 million, respectively.

During the quarter ended December 31, 2012, the Company made a foreign withholding tax payment of approximately $17.2 million.  The Company expects to recover the amount of the payment within the next twelve months.  The $17.2 million payment has been recorded within Prepaid expenses and other current assets on our consolidated balance sheets.