INCOME TAXES

6 Months Ended

Dec. 31, 2021

INCOME TAXES

INCOME TAXES

11. INCOME TAXES

For financial reporting purposes, Income before income taxes includes the following components (amounts in thousands):

	Six Months Ended		Fiscal Years Ended
	December 31,		June 30,		June 30,		June 30,
	2021		2021		2020		2019
United States	$	68,239	$	130,175	$	35,446	$	(3,776)
Foreign		100,597		209,468		157,150		110,353

$ 168,836 $ 339,643 $ 192,596 $ 106,577

Our Income tax expense (benefit) consisted of (amounts in thousands):

	Six Months Ended		Fiscal Years Ended
	December 31,		June 30,		June 30,		June 30,
	2021		2021		2020		2019
Current:
Federal	$	19,285	$	38,146	$	18,320	$	(6,974)
State		(503)		867		347		(13)
Foreign		8,716		(2,602)		10,078		26,230
	$	27,498	$	36,411	$	28,745	$	19,243
Deferred and others:
Federal	$	104	$	376	$	(1,047)	$	916
State		2		(2)		(19)		17
Foreign		2,404		82		(31,333)		(2,678)
	$	2,510	$	456	$	(32,399)	$	(1,745)
Total income tax expense (benefit)	$	30,008	$	36,867	$	(3,654)	$	17,498

The provision for income taxes for the six months ended December 31, 2021, and fiscal years ended June 30, 2021, 2020 and 2019, 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 non-controlling interest in income of consolidated subsidiary and loss from equity investment) from operations as a result of the following differences (amounts in thousands):

	Six Months Ended		Fiscal Years Ended
	December 31,		June 30,		June 30,		June 30,
	2021		2021		2020		2019
Total expense (benefit) computed by applying federal rates	$	35,456	$	71,325	$	40,445	$	22,381
State and provincial income taxes, net of federal benefit		518		874		304		135
Excess depletion		(1,363)		(1,812)		(1,291)		(867)
Estimates for uncertain tax positions		(910)		(26,179)		(11,146)		3,180
Statutory tax attributable to non-controlling interest		(219)		(72)		654		1,013
Effect of foreign earnings		(3,896)		(7,659)		(8,249)		(6,921)
Unrealized foreign exchange gains		54		(616)		(286)		(38)
Effects of Swiss income tax reform		—		—		(72,669)		—
Rate adjustment		1,694		—		—		—
Changes in estimates		(2,614)		(858)		24		(1,538)
Valuation allowance		833		1,284		47,840		(47)
Other		455		580		720		200
Total income tax expense (benefit)	$	30,008	$	36,867	$	(3,654)	$	17,498

The effective tax rate for six months ended December 31, 2021, was 17.8% which includes the release of an uncertain tax position resulting from settlement agreements with foreign tax authorities and a change in estimates, partially offset by a foreign tax rate adjustment resulting in the revaluation of certain deferred tax assets. The effective tax rate for the fiscal year ended June 30, 2021, was 10.9%, primarily impacted by the release of uncertain tax positions resulting from settlement agreements with foreign tax authorities.

The tax effects of temporary differences and carryforwards, which give rise to our deferred tax assets and liabilities on December 31, 2021 and June 30, 2021 and 2020, are as follows (amounts in thousands):

	December 31,		June 30,		June 30,
	2021		2021		2020
Deferred tax assets:
Stock-based compensation	$	1,490	$	1,500	$	1,313
Net operating losses		168		74		104
Foreign tax credits		28,148		24,615		17,159
Amortizable tax goodwill		57,926		62,191		67,287
Other		4,175		4,608		7,713
Total deferred tax assets		91,907		92,988		93,576
Valuation allowance		(62,721)		(61,888)		(60,604)
Net deferred tax assets	$	29,186	$	31,100	$	32,972
Deferred tax liabilities:
Mineral property basis	$	(70,922)	$	(70,352)	$	(67,639)
Unrealized foreign exchange gains		(582)		(582)		(582)
Investment in Peak Gold joint venture		—		—		(3,955)
Other		(199)		(172)		(346)
Total deferred tax liabilities		(71,703)		(71,106)		(72,522)
Total net deferred taxes	$	(42,517)	$	(40,006)	$	(39,550)

We review the measurement of our deferred tax assets at each balance sheet date. Considering all available positive and negative evidence, including but not limited to recent earnings history and forecasted future results, the Company believes it is more likely-than-not that all net deferred tax assets not currently burdened with a valuation allowance will be fully realized. As of December 31, 2021, June 30, 2021, and 2020, we recorded a valuation allowance of $62.7 million, $61.9 million and $60.6 million, respectively. The valuation allowance remaining at December 31, 2021 is attributable to US foreign tax credits, Swiss amortizable tax goodwill, and capital loss and other tax attribute carryforwards in non-US subsidiaries.

As of December 31, 2021, June 30, 2021 and 2020, we had $0.2 million, $0.1 million and $0.1 million of net operating loss carry forwards. 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 2038 tax year, and the Company anticipates the losses will be fully utilized.

As of December 31, 2021, June 30, 2021, and 2020, we had zero, $0.7 million and $25.4 million of unrecognized tax benefits, respectively. If recognized, these unrecognized tax benefits would positively impact our effective income tax rate. A reconciliation of the beginning and ending amount of gross unrecognized tax benefits for the six months ended December 31, 2021, and fiscal years ended June 30, 2021, 2020 and 2019 is as follows (amounts in thousands):

	Six Months Ended		Fiscal Years Ended
	December 31,		June 30,		June 30,		June 30,
	2021		2021		2020		2019
Total gross unrecognized tax benefits at beginning of year	$	652	$	25,389	$	36,547	$	36,346
Additions / Reductions for tax positions of current year		—		—		537		1,709
Additions / Reductions for tax positions of prior years		(60)		(812)		(694)		(912)
Reductions due to settlements with taxing authorities		(592)		(23,925)		(11,001)		(596)
Total amount of gross unrecognized tax benefits at end of year	$	—	$	652	$	25,389	$	36,547

We file 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 2018.

Our continuing practice is to recognize interest and/or penalties related to unrecognized tax benefits as part of our income tax expense. As of December 31, 2021, June 30, 2021 and 2020, the amount of accrued income-tax-related interest and penalties was zero, $0.3 million and $12.6 million, respectively. The gross unrecognized tax benefits reflected in the tabular reconciliation do not include interest and penalties.