9. INCOME TAXES

	For The Three Months Ended						For The Nine Months Ended
	March 31,			March 31,			March 31,			March 31,
	2014			2013			2014			2013
	(Amounts in thousands, except rate)						(Amounts in thousands, except rate)

Income tax expense	$	3,980		$	18,286		$	15,133		$	51,062
Effective tax rate	16.3		%	72.6		%	24.5		%	46.1		%

The decrease in the effective tax rate for the three months ended March 31, 2014, is primarily attributable to (i) a favorable tax rate associated with certain operations in lower-tax jurisdictions, (ii) an increase in foreign tax credits claimed, (iii) a decrease in tax expense relating to a decrease in taxable foreign currency exchange gains, and (iv) the prior year recognized loss on available-for-sale securities without a corresponding tax benefit. The decrease in the effective rate for the three months ended March 31, 2014 was partially off-set by (i) an increase in tax expense related to changes in estimates for uncertain tax positions and (ii) an increase in income tax expense related to earnings from non-U.S. subsidiaries. The decrease in the effective tax rate for the nine months ended March 31, 2014, is primarily attributable to (i) a favorable tax rate associated with certain operations in lower-tax jurisdictions, (ii) a decrease in tax expense relating to a decrease in foreign currency exchange gains, (iii) an increase in foreign tax credits claimed, and (iv) the prior year recognized loss on available-for-sale securities without a corresponding tax benefit.

During fiscal 2014, the Company has asserted the indefinite reinvestment of certain foreign subsidiary earnings. As a result, the Company has not provided for U.S. income taxes applicable to the specific undistributed earnings. The Company has the ability to indefinitely reinvest these foreign earnings based on revenue and cash projections of our other investments, current cash on hand, and availability under our revolving credit facility.

During the nine months ended March 31, 2014, and as a result of continued review of the June 30, 2012 and 2013 tax returns and financial statement impacts of the results of this review, we recorded a $2.7 million income tax benefit resulting from identified errors. In accordance with applicable U.S. GAAP, management quantitatively and qualitatively evaluated the materiality of the errors and determined the errors to be immaterial to our Fiscal 2012 and 2013 consolidated financial statements.

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 of March 31, 2014 and June 30, 2013, the Company had $23.6 million and $21.2 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 its acquisition by the Company during fiscal year 2010. If recognized, these unrecognized tax benefits would positively 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, 2014 and June 30, 2013, the amount of accrued income-tax-related interest and penalties was $5.8 million and $4.3 million, respectively.

As a result of (i) statutes of limitations that will begin to expire in 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) an 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 $4 million and $4.5 million in the next 12 months.