Note O – Income Taxes

The effective tax rate for the three and nine months ended April 30, 2012 was 29.0 percent and 28.0 percent, respectively. The effective tax rate for the three and nine months ended April 30, 2011 was 24.5 percent and 28.1 percent, respectively. The three months ending April 30, 2012 included $1.8 million of tax benefits primarily from a statute of limitations expiration, while the three months ending April 30, 2011 included $3.5 million of tax benefits primarily from the expiration of some statutes of limitations and the favorable conclusions of tax audits in various jurisdictions. Both the current year and prior year's nine month period include tax benefits due to favorable settlements of tax audits of $4.3 million and $2.7 million, respectively. Without consideration of discrete items, the estimated annual effective tax rate of 30.5 percent is higher than the prior year rate of 29.5 percent mainly due to the mix of earnings between tax jurisdictions.

The Company's uncertain tax positions are affected by the tax years that are under audit or remain subject to examination by the relevant taxing authorities. The following tax years, in addition to the current year, remain subject to examination, at least for certain issues, by the major tax jurisdictions indicated:


Major Jurisdictions			Open Tax Years
Belgium			2010 through 2011
China			2001 through 2011
France			2009 through 2011
Germany			2009 through 2011
Italy			2003 through 2011
Japan			2009 through 2011
Mexico			2006 through 2011
Thailand			2005 through 2011
United Kingdom			2010 through 2011
United States			2011

At April 30, 2012, the total unrecognized tax benefits were $16.3 million, and accrued interest and penalties on these unrecognized tax benefits were $1.3 million. The Company recognizes interest accrued related to unrecognized tax benefits in income tax expense. If the Company were to prevail on all unrecognized tax benefits recorded, substantially all of the unrecognized tax benefits would benefit the effective tax rate. With an average statute of limitations of about 5 years, up to $2.0 million of the unrecognized tax benefits could potentially reverse in the next 12 month period, unless extended by audit. It is possible that quicker than expected settlement of either current or future audits and disputes would cause additional reversals of previously recorded reserves in the next 12 month period. Currently, the Company has approximately $0.2 million of unrecognized tax benefits that are in dispute with various taxing authorities related to transfer pricing and deductibility of expenses. Quantification of an estimated range and timing of future audit settlements cannot be made at this time.