Quarterly report pursuant to Section 13 or 15(d)

Income Taxes

v2.4.1.9
Income Taxes
 6 Months Ended
Dec. 31, 2014
Income Tax Disclosure [Abstract]  
Income Taxes
INCOME TAXES
The following table provides details of income taxes:

Three months ended
December 31,
 
Six months ended
December 31,
(Dollar amounts in thousands)
2014
 
2013
 
2014
 
2013
Income (loss) before income taxes
$
(6,268
)
 
$
176,745

 
$
92,739

 
$
316,609

Provision (benefit from) for income taxes
$
(26,536
)
 
$
37,499

 
$
238

 
$
66,166

Effective tax rate
423.4
%
 
21.2
%
 
0.3
%
 
20.9
%

The Company’s estimated annual effective tax rate for the fiscal year ending June 30, 2015 is forecasted to be approximately 19% 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 benefit during the three months ended December 31, 2014 and the estimated annual tax expense is primarily due to the impact of the following items:
•
Tax expense was decreased by $45.8 million during the three months ended December 31, 2014 related to a pre-tax net loss of $131.7 million due to the redemption of the 2018 Senior Notes; and
•
Tax expense was decreased by $10.4 million during the three months ended December 31, 2014 related to the reinstatement of the U.S. federal research credit. On December 19, 2014, the Tax Increase Prevention Act of 2014 reinstated the research credit retroactively to January 1, 2014 through December 31, 2014.
The Company recognized a tax benefit during the three months ended December 31, 2014 compared to a tax expense during three months ended December 31, 2013 primarily due to the impact of the following items:
•
Tax expense was decreased by $45.8 million during the three months ended December 31, 2014 related to a pre-tax net loss of $131.7 million due to the redemption of the 2018 Senior Notes; and
•
Tax expense was decreased by $8.3 million during the three months ended December 31, 2014 related to the reinstatement of the U.S. federal research credit. On December 19, 2014, the Tax Increase Prevention Act of 2014 reinstated the research credit retroactively to January 1, 2014 through December 31, 2014.
Tax expense as a percentage of income before taxes during the six months ended December 31, 2014 was lower compared to the tax expense as a percentage of income during the six months ended December 31, 2013 primarily due to the impact of the following items:
•
Tax expense was decreased by $45.8 million during the six months ended December 31, 2014 related to a pre-tax net loss of $131.7 million due to the redemption of the 2018 Senior Notes;
•
Tax expense was decreased by $3.5 million during the six months ended December 31, 2014 related to the reinstatement of the U.S. federal research credit. On December 19, 2014, the Tax Increase Prevention Act of 2014 reinstated the research credit retroactively to January 1, 2014 through December 31, 2014; offset by
•
Tax expense was decreased by $4.5 million during the six months ended December 31, 2013 related to a non-taxable increase in the value of the assets held within the Company’s Executive Deferred Savings Plan.

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 $11.6 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.