| INCOME TAXES |
NOTE 10 – INCOME TAXES
The following table provides details of income taxes:
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Three months ended
December 31, |
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Six months ended
December 31, |
(Dollar amounts in thousands) |
2015 |
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2014 |
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2015 |
|
2014 |
Income (loss) before income taxes |
$ |
185,475 |
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$ |
(6,268 |
) |
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$ |
319,774 |
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|
$ |
92,739 |
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Provision for (benefit from) income taxes |
$ |
33,268 |
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$ |
(26,536 |
) |
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$ |
62,670 |
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|
$ |
238 |
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Effective tax rate |
17.9 |
% |
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423.4 |
% |
|
19.6 |
% |
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0.3 |
% |
The Company recognized a tax expense during the three months ended December 31, 2015 compared to a tax benefit during the three months ended December 31, 2014 primarily due to the impact of the following items:
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• |
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;
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Tax expense was decreased by $1.2 million during the three months ended December 31, 2014 compared to the three months ended December 31, 2015 due to the reinstatement of the U.S. federal research credit during the three months ended December 31, 2014 and during the three months ended December 31, 2015. Tax expense was decreased by $10.4 million during the three months ended December 31, 2014 when the Tax Increase Prevention Act of 2014 reinstated the research credit on December 19, 2014 retroactively to January 1, 2014 through December 31, 2014. Tax expense was decreased by $9.2 million during the three months ended December 31, 2015 when the Protecting Americans from Tax Hikes (PATH) Act of 2015 permanently reinstated the research credit on December 18, 2015 retroactively to January 1, 2015; and
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• |
Tax expense was decreased by $3.8 million during the three months ended December 31, 2014 related to a tax effect of a change in the tax accounting method.
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Tax expense was higher as a percentage of income before taxes during the six months ended December 31, 2015 compared to the six months ended December 31, 2014 primarily due to the impact of the following items:
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• |
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;
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• |
Tax expense was decreased by $1.2 million during the six months ended December 31, 2014 compared to the six months ended December 31, 2015 due to the reinstatement of the U.S. federal research credit during the six months ended December 31, 2014 and during the six months ended December 31, 2015. Tax expense was decreased by $10.4 million during the six months ended December 31, 2014 when the Tax Increase Prevention Act of 2014 reinstated the research credit on December 19, 2014 retroactively to January 1, 2014 through December 31, 2014. Tax expense was decreased by $9.2 million during the six months ended December 31, 2015 when the Protecting Americans from Tax Hikes (PATH) Act of 2015 permanently reinstated the research credit on December 18, 2015 retroactively to January 1, 2015;
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Tax expense was decreased by $3.8 million during the six months ended December 31, 2014 related to a tax effect of a change in the tax accounting method; and
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Tax expense was increased by $2.7 million during the six months ended December 31, 2015 related to a non-deductible decrease in the value of the assets held within the Company’s Executive Deferred Savings Plan.
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In the normal course of business, the Company is subject to examination by tax authorities throughout the world. The Company is subject to United States federal income tax examination for all years beginning from the fiscal year ended June 30, 2012 and is under United States federal income tax examination for the fiscal year ended June 30, 2013. The Company is subject to state income tax examinations for all years beginning from the fiscal year ended June 30, 2011. 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, 2011. It is possible that certain examinations may be concluded in the next twelve months. The Company believes that it may recognize up to $19.1 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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