9. INCOME TAXES

	Three Months Ended						Nine Months Ended
	March 31,			March 31,			March 31,			March 31,
	2013			2012			2013			2012
	(Amounts in thousands, except rate)						(Amounts in thousands, except rate)
Income tax expense	$	18,286		$	14,864		$	51,062		$	41,297
Effective tax rate	72.6		%	35.6		%	46.1		%	34.8		%

The increase in the effective tax rate for the three months ended March 31, 2013, is primarily related to (i) the recognized loss on available-for-sale securities (Note 4), (ii) an increase in tax expense relating to an increase in foreign currency exchange gains, and (iii) a reduction in foreign tax credits claimed. The increase in tax expense for the three months ended March 31, 2013, is partially offset by a decrease in tax expense related to changes in estimates for uncertain tax positions as well as a decrease in tax expense related to earnings from non-U.S. subsidiaries. The recognized loss on available-for-sale securities resulted in an increase in our effective tax rate of 20.3% and 3.6% for the three and nine months ended, March 31, 2013, respectively, due to the recording of a valuation allowance on a deferred tax asset. The increase in the effective tax rate for the nine months ended March 31, 2013, is primarily related to (i) the recognized loss on available-for-sale securities, (ii) an increase in tax expense related to changes in estimates for uncertain tax positions, and (iii) a reduction in foreign tax credits claimed.

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 the filing of our U.S. consolidated tax return during the quarter ended March 31, 2013, we recorded $3.1 million of income tax expense resulting from an error identified as part of the annual provision-to-return true-up process. In accordance with applicable U.S. GAAP, management quantitatively and qualitatively evaluated the materiality of the error and determined the error to be immaterial to our Fiscal 2012 10-K.

As of March 31, 2013 and June 30, 2012, the Company had $20.2 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 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 have a positive 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 March 31, 2013 and June 30, 2012, the amount of accrued income-tax-related interest and penalties was $3.8 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. 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 March 31, 2013, $8.7 million is recorded within Income tax receivable on our consolidated balance sheets.