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Income Taxes
6 Months Ended
Dec. 31, 2012
Income Taxes

Note 10 – Income Taxes

Our provision for income taxes is based on an estimated annual tax rate for the year applied to federal, state and foreign income. Income tax expense for the three months ended December 31, 2012 and 2011 was $14.8 million and $22.7 million, respectively. The effective tax rate for the three months ended December 31, 2012 and 2011 was 23.7 percent and 27.7 percent, respectively. The change in the effective tax rate for the three months ended December 31, 2012 compared to same period in the prior year was primarily due to the tax effect of foreign exchange gains recorded in the same period in the prior year, foreign exchange losses recorded in the three months ended December 31, 2012 and the mix of income in certain key foreign jurisdictions.

Income tax expense for the six months ended December 31, 2012 and 2011 was $32.0 million and $37.6 million, respectively. The effective tax rate for the six months ended December 31, 2012 and 2011 was 23.9 percent and 25.9 percent, respectively. The change in the effective tax rate for the six months ended December 31, 2012 compared to same period in the prior year was primarily due to the tax effect of foreign exchange gains and losses, as noted above, and the mix of income in certain key foreign jurisdictions.

As of December 31, 2012, unrecognized tax benefits and the related interest were $35.8 million and $1.7 million, respectively; all but $1.7 million would affect the tax rate if recognized. During the three and six months ended December 31, 2012 we recorded tax reserves on uncertain tax positions in the amount of $0.7 million and $1.6 million, respectively. During the three and six months ended December 31, 2012, we recorded additional interest expense on uncertain tax positions of $0.4 million and $0.5 million, respectively.