INCOME TAXES

12 Months Ended

Dec. 31, 2022

INCOME TAXES

INCOME TAXES

11. INCOME TAXES

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

	Year Ended		Six Months Ended		Fiscal Years Ended
	December 31,		December 31,		June 30,		June 30,
	2022		2021		2021		2020
United States	$	86,321	$	68,239	$	130,175	$	35,446
Foreign		186,547		100,597		209,468		157,150
	$	272,868	$	168,836	$	339,643	$	192,596

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

	Year Ended		Six Months Ended		Fiscal Years Ended
	December 31,		December 31,		June 30,		June 30,
	2022		2021		2021		2020
Current:
Federal	$	29,228	$	19,285	$	38,146	$	18,320
State		467		(503)		867		347
Foreign		23,067		8,716		(2,602)		10,078
	$	52,762	$	27,498	$	36,411	$	28,745
Deferred and others:
Federal	$	(957)	$	104	$	376	$	(1,047)
State		(18)		2		(2)		(19)
Foreign		(18,861)		2,404		82		(31,333)
	$	(19,836)	$	2,510	$	456	$	(32,399)
Total income tax expense (benefit)	$	32,926	$	30,008	$	36,867	$	(3,654)

The provision for income taxes for the year ended December 31, 2022, six months ended December 31, 2021, and fiscal years ended June 30, 2021, and 2020 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):

	Year Ended		Six Months Ended		Fiscal Years Ended
	December 31,		December 31,		June 30,		June 30,
	2022		2021		2021		2020
Total expense (benefit) computed by applying federal rates	$	57,303	$	35,456	$	71,325	$	40,445
State and provincial income taxes, net of federal benefit		545		518		874		304
Excess depletion		(1,907)		(1,363)		(1,812)		(1,291)
Estimates for uncertain tax positions		—		(910)		(26,179)		(11,146)
Statutory tax attributable to non-controlling interest		(363)		(219)		(72)		654
Effect of foreign earnings		(8,846)		(3,896)		(7,659)		(8,249)
Unrealized foreign exchange gains		853		54		(616)		(286)
Effects of Swiss income tax reform		—		—		—		(72,669)
Rate adjustment		—		1,694		—		—
Changes in estimates		119		(2,614)		(858)		24
Valuation allowance		(15,877)		833		1,284		47,840
Other		1,099		455		580		720
Total income tax expense (benefit)	$	32,926	$	30,008	$	36,867	$	(3,654)

The effective tax rate for the year ended December 31, 2022, was 12.1% which includes the release of a valuation allowance on certain foreign deferred tax assets. 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 effective tax rate for the fiscal year ended June 30, 2020, was primarily impacted by 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 on December 31, 2022 and 2021 are as follows (amounts in thousands):

	December 31,		December 31,
	2022		2021
Deferred tax assets:
Stock-based compensation	$	1,846	$	1,490
Net operating losses		3,184		168
Foreign tax credits		33,301		28,148
Amortizable tax goodwill		52,783		57,926
Other		4,575		4,175
Total deferred tax assets		95,689		91,907
Valuation allowance		(46,844)		(62,721)
Net deferred tax assets	$	48,845	$	29,186
Deferred tax liabilities:
Mineral property basis	$	(124,373)	$	(70,922)
Unrealized foreign exchange gains		(582)		(582)
Other		(143)		(199)
Total deferred tax liabilities		(125,098)		(71,703)
Total net deferred taxes	$	(76,253)	$	(42,517)

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, 2022 and 2021, we recorded a valuation allowance of $46.8 million and $62.7 million, respectively. The valuation allowance remaining at December 31, 2022 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, 2022 and 2021, we had a deferred tax liability for mineral property basis of $124.4 million and $70.9 million, respectively.  The increase in the deferred tax liability for mineral property was primarily attributable to book over-tax basis differences related to the acquisition of GBR (Note 3).  

As of December 31, 2022 and 2021, we had $3.2 million and $0.2 million of net operating loss carryforwards. The majority of the tax loss carryforwards 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, 2022 and 2021, we had zero unrecognized tax benefits. A reconciliation of the beginning and ending amount of gross unrecognized tax benefits for the year ended December 31, 2022, six months ended December 31, 2021, and fiscal years ended June 30, 2021 and 2020 is as follows (amounts in thousands):

	Year Ended		Six Months Ended		Fiscal Years Ended
	December 31,		December 31,		June 30,		June 30,
	2022		2021		2021		2020
Total gross unrecognized tax benefits at beginning of year	$	—	$	652	$	25,389	$	36,547
Additions / Reductions for tax positions of current year		—		—		—		537
Additions / Reductions for tax positions of prior years		—		(60)		(812)		(694)
Reductions due to settlements with taxing authorities		—		(592)		(23,925)		(11,001)
Total amount of gross unrecognized tax benefits at end of year	$	—	$	—	$	652	$	25,389

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 2019.

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, 2022 and 2021, the amount of accrued income-tax-related interest and penalties was zero. The gross unrecognized tax benefits reflected in the tabular reconciliation do not include interest and penalties.