Income Tax Expense (Benefit)

9 Months Ended

Dec. 31, 2013

Notes To Financial Statements [Abstract]

Income Tax Expense (Benefit)

Income Tax Expense

Income tax expense includes United States federal, state and local, and foreign income taxes, and is based on reported pre-tax income. The effective income tax rates for the three-month periods ended December 31, 2013 and 2012 were 44.6% and 24.0%, respectively. During the third quarter of fiscal 2014, we were unfavorably impacted by discrete item adjustments and pretax losses in jurisdictions for which no tax benefit is recognized. Conversely, during the third quarter of fiscal 2013, we benefited from higher projected income in lower tax rate jurisdictions and favorable discrete item adjustments.

The effective income tax rates for the nine-month periods ended December 31, 2013 and 2012 were 32.1% and 29.3%, respectively. The effective tax rate for the first nine months of fiscal 2014 includes a benefit from the recognition of previously unrecognized tax benefits due to the settlement of a federal tax examination. The effective tax rate for the first nine months of 2013 includes the benefit of higher projected income in lower tax rate jurisdictions and a large favorable discrete item adjustment due to the realization of a deduction related to the closure of our Swiss manufacturing operations.

Income tax expense is provided on an interim basis based upon our estimate of the annual effective income tax rate, and adjusted each quarter for discrete items. In determining the estimated annual effective income tax rate, we analyze various factors, including projections of our annual earnings and taxing jurisdictions in which the earnings will be generated, the impact of state and local income taxes, our ability to use tax credits and net operating loss carry forwards, and available tax planning alternatives.

As of March 31, 2013, we had $9,362 in unrecognized tax benefits, of which all would favorably impact the effective tax rate if recognized. As of December 31, 2013, we had no unrecognized tax benefits and we have not recorded any liability for interest and penalties.

We operate in numerous taxing jurisdictions and are subject to regular examinations by various United States federal, state and local, as well as foreign jurisdictions. We are no longer subject to United States federal examinations for years before fiscal 2013 and, with limited exceptions, we are no longer subject to United States state and local, or non-United States, income tax examinations by tax authorities for years before fiscal 2009. We remain subject to tax authority audits in various jurisdictions wherever we do business. We do not expect the results of these examinations to have a material adverse affect on our consolidated financial statements.