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Income Taxes | 12 Months Ended
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Jun. 30, 2015
Income Tax Disclosure [Abstract] |
INCOME TAXES | INCOME TAXES (Loss) income before income taxes consisted of the following for the years ended June 30:
(in thousands) | 2015 |  |  | 2014 |  |  | 2013 |
(Loss) income before income taxes: |  |  |  |  |
United States | $ | (323,299 | ) |  | $ | 59,160 |  |  | $ | 87,499 |
International | (64,316 | ) |  | 169,649 |  |  | 179,110 |
Total (loss) income before income taxes | $ | (387,615 | ) |  | $ | 228,809 |  |  | $ | 266,609 |
Current income taxes: |  |  |  |  |
Federal | $ | (9,328 | ) |  | $ | 15,108 |  |  | $ | 10,645 |
State | 816 |  |  | 896 |  |  | 3,441 |
International | 40,433 |  |  | 27,488 |  |  | 45,375 |
Total current income taxes | 31,921 |  |  | 43,492 |  |  | 59,461 |
Deferred income taxes: |  |  |  |  |
Federal | $ | (38,943 | ) |  | $ | 10,157 |  |  | $ | 12,951 |
State | (8,680 | ) |  | (62 | ) |  | 2,433 |
International | (952 | ) |  | 13,024 |  |  | (15,152 | )
Total deferred income taxes: | (48,575 | ) |  | 23,119 |  |  | 232 |
(Benefit) provision for income taxes | $ | (16,654 | ) |  | $ | 66,611 |  |  | $ | 59,693 |
Effective tax rate | 4.3 | % |  | 29.1 | % |  | 22.4 | %
The reconciliation of income taxes computed using the statutory U.S. income tax rate and the provision for income taxes was as follows for the years ended June 30:
(in thousands) | 2015 |  |  | 2014 |  |  | 2013 |
Income taxes at U.S. statutory rate | $ | (135,665 | ) |  | $ | 80,083 |  |  | $ | 93,313 |
State income taxes, net of federal tax benefits | (1,748 | ) |  | 1,593 |  |  | 4,051 |
U.S. income taxes provided on international income | 3,679 |  |  | 2,423 |  |  | 3,067 |
Combined tax effects of international income | (21,560 | ) |  | (22,580 | ) |  | (30,692 | )
Impact of goodwill impairment charges | 134,657 |  |  | — |  |  | — |
Change in valuation allowance and other uncertain tax positions | 1,530 |  |  | (2,603 | ) |  | (4,550 | )
Impact of domestic production activities deduction | — |  |  | (942 | ) |  | (3,546 | )
Research and development credit | (3,087 | ) |  | (1,385 | ) |  | (4,141 | )
Change in permanent reinvestment assertion | 2,945 |  |  | 7,170 |  |  | — |
Other | 2,595 |  |  | 2,852 |  |  | 2,191 |
(Benefit) provision for income taxes | $ | (16,654 | ) |  | $ | 66,611 |  |  | $ | 59,693 |
During 2015, we recorded goodwill impairment charges related to our Infrastructure segment for the majority of which there was no tax benefit. The federal effect of these permanent differences is included in the income tax reconciliation table under the caption "impact of goodwill charges." During 2015, we recorded an adjustment of $2.9 million related to a change in assertion of certain foreign subsidiaries' undistributed earnings, which are no longer considered permanently reinvested. The effect of this charge is included in the income tax reconciliation table under the caption "change in permanent reinvestment assertion." During 2014 and 2013, we recorded adjustments of $2.2 million and $4.2 million, respectively, related to the effective settlement of uncertain tax positions in Europe, which reduced income tax expense. The effects of these tax benefits are included in the income tax reconciliation table under the caption “change in valuation allowance and other uncertain tax positions.” During 2014, we recorded a valuation allowance adjustment of $1.2 million, which reduced income tax expense. The valuation allowance adjustment is related to a state tax law change. The effect of this tax benefit is included in the income tax reconciliation table under the caption “change in valuation allowance and other uncertain tax positions.” During 2014, we recorded an adjustment of $7.2 million related to a change in assertion of a foreign subsidiary’s certain undistributed earnings, which are no longer considered permanently reinvested. The effect of this charge is included in the income tax reconciliation table under the caption “change in permanent reinvestment assertion.” The components of net deferred tax assets and (liabilities) were as follows at June 30:
(in thousands) | 2015 |  |  | 2014 |
Deferred tax assets: |  |  |
Net operating loss carryforwards | $ | 47,289 |  |  | $ | 52,812 |
Inventory valuation and reserves | 18,023 |  |  | 20,612 |
Pension benefits | 23,559 |  |  | 2,427 |
Other postretirement benefits | 7,359 |  |  | 8,432 |
Accrued employee benefits | 23,674 |  |  | 29,034 |
Other accrued liabilities | 18,210 |  |  | 12,981 |
Hedging activities | 4,354 |  |  | 14,996 |
Tax credits and other carryforwards | 13,815 |  |  | 2,082 |
Other | 12,028 |  |  | 14,617 |
Total | 168,311 |  |  | 157,993 |
Valuation allowance | (16,771 | ) |  | (17,860 | )
Total deferred tax assets | $ | 151,540 |  |  | $ | 140,133 |
Deferred tax liabilities: |  |  |
Tax depreciation in excess of book | $ | 102,480 |  |  | $ | 107,171 |
Intangible assets | 18,688 |  |  | 70,957 |
Total deferred tax liabilities | $ | 121,168 |  |  | $ | 178,128 |
Total net deferred tax assets (liabilities) | $ | 30,372 |  |  | $ | (37,995 | )
Included in deferred tax assets at June 30, 2015 is $47.3 million associated with net operating loss carryforwards in state and foreign jurisdictions. Of that amount, $5.3 million expires through 2020, $7.4 million expires through 2025, $2.8 million expires through 2030, $1.9 million expires through 2035, and the remaining $29.9 million does not expire. The realization of these tax benefits is primarily dependent on future taxable income in these jurisdictions. A valuation allowance of $16.8 million has been placed against deferred tax assets in Europe, China, Hong Kong, Brazil and the U.S., all of which would be allocated to income tax expense upon realization of the deferred tax assets. In 2015, the valuation allowance related to these deferred tax assets decreased by $1.1 million. As the respective operations generate sufficient income, the valuation allowances will be partially or fully reversed at such time we believe it will be more likely than not that the deferred tax assets will be realized. As of June 30, 2015, unremitted earnings of our non-U.S. subsidiaries and affiliates of $2,087.9 million, the majority of which have not been previously taxed in the U.S., are considered permanently reinvested, and accordingly, no deferred tax liability has been recorded in connection therewith. It is not practical to estimate the income tax effect that might be incurred if cumulative prior year earnings not previously taxed in the U.S. were remitted to the U.S. A reconciliation of the beginning and ending amount of unrecognized tax benefits (excluding interest) is as follows as of June 30:
(in thousands) |  | 2015 |  |  | 2014 |  |  | 2013 |
Balance at beginning of year |  | $ | 20,366 |  |  | $ | 26,798 |  |  | $ | 7,298 |
Increases for tax positions of prior years |  | — |  |  | 1,461 |  |  | — |
Decreases for tax positions of prior years |  | (3,188 | ) |  | (6,982 | ) |  | — |
Increases for tax positions related to the current year |  | — |  |  | 116 |  |  | 23,231 |
Decreases related to settlement with taxing authority |  | (348 | ) |  | (2,161 | ) |  | (3,813 | )
Decreases related to lapse of statute of limitations |  | (398 | ) |  | — |  |  | — |
Foreign currency translation |  | (1,813 | ) |  | 1,134 |  |  | 82 |
Balance at end of year |  | $ | 14,619 |  |  | $ | 20,366 |  |  | $ | 26,798 |
The total amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate in 2015, 2014 and 2013 is $2.7 million, $2.4 million and $4.3 million, respectively. Our policy is to recognize interest and penalties related to income taxes as a component of the provision for income taxes in the consolidated statement of income. We recognized a reduction in interest of 0.7 million and 1.9 million in 2015 and 2013 respectively. We recognized interest expense of $0.8 million in 2014. As of June 30, 2015 and 2014 the amount of interest accrued was $0.5 million and $1.3 million, respectively. As of June 30, 2015 and 2014, the amount of penalty accrued was $0.2 million and $0.4 million, respectively. With few exceptions, we are no longer subject to income tax examinations by tax authorities for years prior to 2009. The Internal Revenue Service has audited all U.S. tax years prior to 2014. Various state and foreign jurisdiction tax authorities are in the process of examining our income tax returns for various tax years ranging from 2009 to 2013. We continue to execute and expand our pan-European business model. As a result of this and other matters, we continuously review our uncertain tax positions and evaluate any potential issues that may lead to an increase or decrease in the total amount of unrecognized tax benefits recorded. We believe that it is reasonably possible that the amount of unrecognized tax benefits could decrease by approximately $11.9 million within the next twelve months as a result of a settlement with one foreign tax jurisdiction of a position that was taken in 2013. In 2015 and 2014, we refined our estimate for this position which resulted in a reduction of the liability of $3.2 million and $7.0 million respectively. A corresponding deferred tax asset in the amount of $11.9 million was recorded for the position in the U. S. and is included in the components of net deferred tax assets and liabilities table under the caption "other."

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