Quarterly report pursuant to Section 13 or 15(d)

Income Taxes

v2.4.0.8
Income Taxes
9 Months Ended
Mar. 31, 2014
Income Tax Disclosure [Abstract]
Income Taxes
INCOME TAXES
The following table provides details of income taxes:

Three months ended March 31,
Nine months ended March 31,
(Dollar amounts in thousands)
2014
2013
2014
2013
Income before income taxes
$
251,246

$
192,115

$
567,855

$
513,531

Provision for income taxes
$
47,665

$
25,733

$
113,831

$
105,152

Effective tax rate
19.0
%
13.4
%
20.0
%
20.5
%

The Company’s estimated annual effective tax rate for the fiscal year ending June 30, 2014 is approximately 20.6% .
The difference between the actual effective tax rate of 19.0% during the the three months ended March 31, 2014 and the estimated annual effective tax rate of 20.6% is primarily due to a decrease in tax expense of $5.5 million related to a decrease in the Company's unrecognized tax benefits resulting from the expiration of the statute of limitations.
Tax expense was higher as a percentage of income before taxes during the three months ended March 31, 2014 compared to the three months ended March 31, 2013 primarily due to a decrease in tax expenses of $15.6 million during the three months ended March 31, 2013 related to the U.S. federal research credit. On January 2, 2013, the American Taxpayer Relief Act of 2012 was signed into law, which reinstated the research credit retroactive to January 1, 2012 and extended the credit through December 31, 2013, enabling the Company to recognize a retroactive tax credit for prior periods during the three months ended March 31, 2013 .

Tax expense as a percentage of income before taxes during the nine months ended March 31, 2014 was relatively flat compared to the nine months ended March 31, 2013 and was by impacted the following items:
•
Tax expense was decreased by $8.7 million during the nine months ended March 31, 2013 related to the U.S. federal research credit. On January 2, 2013, the American Taxpayer Relief Act of 2012 was signed into law, which reinstated the research credit retroactive to January 1, 2012 and extended the credit through December 31, 2013, enabling the Company to recognize a retroactive tax credit for prior periods during the nine months ended March 31, 2013; offset by a
•
Decrease in tax expense of $8.6 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 tax 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, 2009. 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, 2009. 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 $9.9 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.
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