NOTE 11 – INCOME TAXES
The following table provides details of income taxes:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
March 31, |
|
Nine months ended
March 31, |
(Dollar amounts in thousands) |
2015 |
|
2014 |
|
2015 |
|
2014 |
Income before income taxes |
$ |
166,454 |
|
|
$ |
251,246 |
|
|
$ |
259,193 |
|
|
$ |
567,855 |
|
Provision for income taxes |
$ |
34,816 |
|
|
$ |
47,665 |
|
|
$ |
35,054 |
|
|
$ |
113,831 |
|
Effective tax rate |
20.9 |
% |
|
19.0 |
% |
|
13.5 |
% |
|
20.0 |
% |
The Company’s estimated annual effective tax rate for the fiscal year ending June 30, 2015 is forecasted to be approximately 17% after considering the tax benefit on the pre-tax net loss of $131.7 million due to the redemption of the 2018 Senior Notes. The Company estimates an effective tax rate of approximately 22% for the remainder of the fiscal year ending June 30, 2015.
The difference between the actual tax expense during the three months ended March 31, 2015 and the estimated annual tax expense is primarily due to the impact of the following items:
|
|
• |
Tax expense was decreased by $2.1 million during the three months ended March 31, 2015 related to a non-taxable increase in the value of the assets held within the Company’s Executive Deferred Savings Plan; and
|
|
|
• |
Tax expense was decreased by $3.8 million during the three months ended March 31, 2015 related to the tax effect of an intercompany dividend.
|
Tax expense was higher as a percentage of income before taxes during the three months ended March 31, 2015 compared to the three months ended March 31, 2014 primarily due to the impact of the following items:
|
|
• |
Tax expense was decreased by $5.5 million during the three months ended March 31, 2014 related to a decrease in the Company’s unrecognized tax benefits from the expiration of the statute of limitations; and
|
|
|
• |
Tax expense was decreased by $2.1 million during the three months ended March 31, 2014 related to an increase in the proportion of the Company’s earnings generated in jurisdictions with tax rates lower than the U.S. statutory rate; offset by
|
|
|
• |
Tax expense was decreased by $1.3 million during the three months ended March 31, 2015 related to a non-taxable increase in the value of the assets held within the Company’s Executive Deferred Savings Plan; and
|
|
|
• |
Tax expense was decreased by $3.8 million during the three months ended March 31, 2015 related to the tax effect of an intercompany dividend.
|
Tax expense was lower as a percentage of income before taxes during the nine months ended March 31, 2015 compared to the nine months ended March 31, 2014, primarily due to the impact of the following items:
|
|
• |
Tax expense was decreased by $45.2 million during the nine months ended March 31, 2015 related to a pre-tax net loss of $131.7 million due to the redemption of the 2018 Senior Notes; offset by
|
|
|
• |
Tax expense was decreased by $5.5 million during the nine months ended March 31, 2014 related to a decrease in the Company’s unrecognized tax benefits from the expiration of the statute of limitations;
|
|
|
• |
Tax expense was decreased by $3.2 million during the nine months ended March 31, 2014 related to a non-taxable increase in the value of the assets held within the Company’s Executive Deferred Savings Plan; and
|
|
|
• |
Tax expense was decreased by $4.9 million during the nine months ended March 31, 2014 related to an increase in the proportion of the Company’s earnings generated in jurisdictions with tax rates lower than the U.S. statutory rate;
|
In the normal course of business, the Company is subject to examination by tax authorities throughout the world. The Company is subject to U.S. federal income tax examination for all years beginning from the fiscal year ended June 30, 2011. The Company is subject to state income tax examinations for all years beginning from the fiscal year ended June 30, 2010. The Company is also subject to examinations in other major foreign jurisdictions, including Singapore, for all years beginning from the fiscal year ended June 30, 2010. It is possible that certain examinations may be concluded in the next twelve months. The Company believes it is possible that it may recognize up to $22.9 million of its existing unrecognized tax benefits within the next twelve months as a result of the lapse of statutes of limitations and the resolution of examinations with various tax authorities.
|