INCOME TAXES

12 Months Ended

Jun. 30, 2020

INCOME TAXES

INCOME TAXES

10. INCOME TAXES

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

	Fiscal Year Ended June 30,
	2020		2019		2018
	(Amounts in thousands)
United States	$	35,446	$	(3,776)	$	(39,662)
Foreign		157,150		110,353		(64,917)
	$	192,596	$	106,577	$	(104,579)

Our Income tax (benefit) expense consisted of:

	Fiscal Year Ended June 30,
	2020		2019		2018
	(Amounts in thousands)
Current:
Federal	$	18,320	$	(6,974)	$	24,621
State		347		(13)		253
Foreign		10,078		26,230		22,741
	$	28,745	$	19,243	$	47,615
Deferred and others:
Federal	$	(1,047)	$	916	$	(2,253)
State		(19)		17		(223)
Foreign		(31,333)		(2,678)		(30,367)
	$	(32,399)	$	(1,745)	$	(32,843)
Total income tax (benefit) expense	$	(3,654)	$	17,498	$	14,772

The provision for income taxes for the fiscal years ended June 30, 2020, 2019 and 2018, 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:

	Fiscal Year Ended June 30,
	2020		2019		2018
	(Amounts in thousands)
Total expense (benefit) computed by applying federal rates	$	40,445	$	22,381	$	(29,343)
State and provincial income taxes, net of federal benefit		304		135		(104)
Excess depletion		(1,291)		(867)		(1,440)
Estimates for uncertain tax positions		(11,146)		3,180		8,574
Statutory tax attributable to non-controlling interest		654		1,013		1,736
Effect of foreign earnings		(8,249)		(6,921)		1,230
Effect of foreign earnings indefinitely reinvested		—		—		(19,004)
Realized foreign exchange gains		—		—		18,330
Unrealized foreign exchange gains		(286)		(38)		(1,610)
Effects of US income tax reform		—		—		30,675
Effects of Swiss income tax reform		(72,669)		—		—
Changes in estimates		24		(1,538)		(70)
Valuation allowance		47,840		(47)		6,337
Other		720		200		(539)
Total income tax (benefit) expense	$	(3,654)	$	17,498	$	14,772

The current year effective tax rate includes the impact of the Federal Act on Tax Reform and AHV Financing in Switzerland and the release of an uncertain tax position resulting from a settlement agreement with a foreign tax authority.

The tax effects of temporary differences and carryforwards, which give rise to our deferred tax assets and liabilities at June 30, 2020 and 2019, are as follows:

	2020		2019
	(Amounts in thousands)
Deferred tax assets:
Stock-based compensation	$	1,313	$	1,118
Net operating losses		104		56
Foreign tax credits		17,159		11,125
Amortizable tax goodwill		67,287		—
Other		7,713		7,960
Total deferred tax assets		93,576		20,259
Valuation allowance		(60,604)		(12,764)
Net deferred tax assets	$	32,972	$	7,495
Deferred tax liabilities:
Mineral property basis	$	(67,639)	$	(74,360)
Unrealized foreign exchange gains		(582)		(582)
Investment in Peak Gold joint venture		(3,955)		(4,353)
Other		(346)		(150)
Total deferred tax liabilities		(72,522)		(79,445)
Total net deferred taxes	$	(39,550)	$	(71,950)

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 June 30, 2020, and 2019, we recorded a valuation allowance of $60.6 million and $12.8 million, respectively. The valuation allowance remaining at June 30, 2020 is attributable to US foreign tax credits, Swiss amortizable tax goodwill, capital loss and other tax attribute carryforwards in non-US subsidiaries.

At June 30, 2020 and 2019, we had $0.4 million and $0.2 million of net operating loss carry forwards, respectively. 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 June 30, 2020, and 2019, we had $25.4 million and $36.5 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 is as follows:

	2020		2019		2018
	(Amounts in thousands)
Total gross unrecognized tax benefits at beginning of year	$	36,547	$	36,346	$	28,542
Additions / Reductions for tax positions of current year		537		1,709		1,624
Additions / Reductions for tax positions of prior years		(694)		(912)		6,180
Reductions due to settlements with taxing authorities		(11,001)		(596)		—
Total amount of gross unrecognized tax benefits at end of year	$	25,389	$	36,547	$	36,346

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 2014. As a result of possible settlements with taxing authorities in various jurisdictions, the Company believes that it is reasonably possible that the total amount of its net unrecognized income tax benefits may decrease by $24 million in the next 12 months.

Our continuing practice is to recognize interest and/or penalties related to unrecognized tax benefits as part of our income tax expense. At June 30, 2020 and 2019, the amount of accrued income-tax-related interest and penalties was $12.6 million. The gross unrecognized tax benefits reflected in the tabular reconciliation do not include interest and penalties and are not reduced by advanced deposits of $12.6 million made to taxing authorities.