XML 34 R19.htm IDEA: XBRL DOCUMENT
v3.7.0.1

Income Taxes | 12 Months Ended
--- | ---
Jun. 30, 2016
Income Tax Disclosure [Abstract] |
Income Taxes | INCOME TAXES The components of income (loss) before income taxes and equity in earnings of equity-method investees were as follows:
| Fiscal Year Ended June 30,
| 2016 |  | 2015 (Revised) |  | 2014 (Revised)
Domestic | $ | 158,025 |  |  | $ | 170,884 |  |  | $ | 154,773 |
Foreign | (39,617 | ) |  | 41,985 |  |  | 42,387 |
Total | $ | 118,408 |  |  | $ | 212,869 |  |  | $ | 197,160 |
The provision (benefit) for income taxes consisted of the following:
| Fiscal Year Ended June 30,
| 2016 |  | 2015 (Revised) |  | 2014 (Revised)
Current: |  |  |  |  |
Federal | $ | 21,304 |  |  | $ | 32,910 |  |  | $ | 47,660 |
State and local | 1,798 |  |  | 8,311 |  |  | 7,640 |
Foreign | 14,737 |  |  | 9,981 |  |  | 16,920 |
| 37,839 |  |  | 51,202 |  |  | 72,220 |
Deferred: |  |  |  |  |
Federal | 30,711 |  |  | (912 | ) |  | 2,241 |
State and local | 5,017 |  |  | (1,069 | ) |  | (186 | )
Foreign | (2,635 | ) |  | (686 | ) |  | (4,667 | )
| 33,093 |  |  | (2,667 | ) |  | (2,612 | )
Total | $ | 70,932 |  |  | $ | 48,535 |  |  | $ | 69,608 |
Cash paid for income taxes, net of refunds, during the fiscal years ended June 30, 2016, 2015 and 2014 amounted to $44,225, $47,317 and $47,339, respectively. The reconciliation of the U.S. Federal statutory rate to our effective rate on income before provision for income taxes was as follows:
| Fiscal Year Ended June 30,
| 2016 |  | % |  | 2015 (Revised) |  | % |  | 2014 (Revised) |  | %
Expected United States federal income tax at statutory rate | $ | 41,443 |  |  | 35.0 | % |  | $ | 74,504 |  |  | 35.0 | % |  | $ | 69,006 |  |  | 35.0 | %
State income taxes, net of federal benefit | 5,447 |  |  | 4.6 | % |  | 4,795 |  |  | 2.2 | % |  | 4,862 |  |  | 2.5 | %
Domestic manufacturing deduction | (1,233 | ) |  | (1.0 | )% |  | (1,210 | ) |  | (0.6 | )% |  | (2,642 | ) |  | (1.3 | )%
Foreign income at different rates | (2,861 | ) |  | (2.4 | )% |  | (9,515 | ) |  | (4.5 | )% |  | (295 | ) |  | (0.1 | )%
Goodwill impairment | 23,172 |  |  | 19.6 | % | — |  | — |  | — |  | — | % |  | — |  |  | — | %
Change in Valuation Allowance | 5,067 |  |  | 4.3 | % |  | 963 |  |  | 0.5 | % |  | — |  |  | — | %
Corporate tax reorganization | (4,173 | ) |  | (3.5 | )% |  | (20,670 | ) |  | (9.7 | )% |  | — |  |  | — | %
Unrealized foreign exchange losses | 7,056 |  |  | 6.0 | % |  | — |  |  | — | % |  | — |  |  | — | %
Non-taxable gains on acquisition of pre-existing ownership interests in HPPC and Empire | — |  |  | — | % |  | (2,793 | ) |  | (1.3 | )% |  | — |  |  | — | %
Reduction of deferred tax liabilities resulting from change in United Kingdom tax rate | (4,942 | ) |  | (4.2 | )% |  | — |  |  | — | % |  | (3,739 | ) |  | (1.9 | )%
Other | 1,956 |  |  | 1.5 | % |  | 2,461 |  |  | 1.2 | % |  | 2,416 |  |  | 1.1 | %
Provision for income taxes | $ | 70,932 |  |  | 59.9 | % |  | $ | 48,535 |  |  | 22.8 | % |  | $ | 69,608 |  |  | 35.3 | %
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts for income tax purposes. Deferred tax assets and liabilities consisted of the following:
| June 30, 2016 |  | June 30, 2015 (Revised)
Current deferred tax assets(1): |  |  |
Basis difference on inventory | $ | — |  |  | $ | 13,730 |
Reserves not currently deductible | — |  |  | 22,804 |
Other | — |  |  | 1,972 |
Current deferred tax assets(1) | $ | — |  |  | $ | 38,506 |
Noncurrent deferred tax assets/(liabilities): |  |  |
Basis difference on inventory | $ | 11,232 |  |  | $ | — |
Reserves not currently deductible | 17,652 |  |  | — |
Basis difference on intangible assets | (145,673 | ) |  | (154,009 | )
Basis difference on property and equipment | (25,933 | ) |  | (23,415 | )
Other comprehensive income | (4,623 | ) |  | (1,217 | )
Net operating loss and tax credit carryforwards | 25,340 |  |  | 28,875 |
Stock based compensation | 4,632 |  |  | 6,828 |
Other | 1,176 |  |  | 2,723 |
Valuation allowances | (15,310 | ) |  | (10,926 | )
Noncurrent deferred tax liabilities, net | $ | (131,507 | ) |  | $ | (151,141 | )
Total net deferred tax liabilities | $ | (131,507 | ) |  | $ | (112,635 | )
(1) | Due to the Company’s adoption of ASU 2015-17, all deferred tax assets and liabilities are classified as noncurrent as of June 30, 2016. See Note 3, Summary of Significant Accounting Policies and Practices, for details.
At June 30, 2016 and 2015, the Company had U.S. federal net operating loss (“NOL”) carryforwards of approximately $38,433 and $42,880, respectively, the majority of which will not expire until 2033. Certain of these federal loss carryforwards are subject to Internal Revenue Code Section 382 which imposes limitations on utilization following certain changes in ownership of the entity generating the loss carryforward. We had foreign NOL carryforwards of approximately $42,573 and $45,027 in the same respective years. At June 30, 2016 and 2015, the Company had U.S. federal foreign tax credit carryforwards of approximately $877. These credit carryforwards have various expiration dates through 2020. As of June 30, 2016, the Company has not provided for deferred taxes on the excess of financial reporting over the tax basis of investments in certain foreign subsidiaries in the amount of $411,000 as the Company plans to reinvest such earnings indefinitely outside the United States. If these earnings were repatriated in the future, additional income and withholding tax expense would be incurred. Due to complexities in the laws of the U.S. and foreign jurisdictions and the assumptions that would have to be made, it is not practicable to estimate the total amount of income taxes that would have to be provided on such earnings. As required by the authoritative guidance on accounting for income taxes, the Company evaluates the realizability of deferred tax assets on a jurisdictional basis at each reporting date. Accounting for income taxes requires that a valuation allowance be established when it is more likely than not that all or a portion of the deferred tax assets will not be realized. In circumstances where there is sufficient negative evidence indicating that the deferred tax assets are not more likely than not realizable, we establish a valuation allowance. We have recorded valuation allowances in the amounts of $15,310 and $10,926 at June 30, 2016 and 2015, respectively. The changes in valuation allowances against deferred income tax assets were as follows:
| Fiscal Year Ended June 30,
| 2016 |  | 2015 (Revised)
Balance at beginning of year | $ | 10,926 |  |  | $ | 10,952 |
Additions charged to income tax expense | 7,484 |  |  | 963 |
Reductions credited to income tax expense | (2,417 | ) |  | — |
Currency translation adjustments | (683 | ) |  | (989 | )
Balance at end of year | $ | 15,310 |  |  | $ | 10,926 |
Unrecognized tax benefits activity, including interest and penalties, is summarized below:
| Fiscal Year Ended June 30,
| 2016 |  | 2015 (Revised) |  | 2014 (Revised)
Balance at beginning of year | $ | 10,759 |  |  | $ | 11,058 |  |  | $ | 2,507 |
Additions based on tax positions related to the current year | 4,276 |  |  | 1,089 |  |  | 5,946 |
Additions based on tax positions related to prior years | 1,404 |  |  | 202 |  |  | 3,511 |
Reductions due to lapse in statute of limitations and settlements | (420 | ) |  | (1,590 | ) |  | (906 | )
Balance at end of year | $ | 16,019 |  |  | $ | 10,759 |  |  | $ | 11,058 |
As of June 30, 2016, the Company had $16,019 of unrecognized tax benefits, of which $10,826 represents the amount that, if recognized, would impact the effective tax rate in future periods. As of June 30, 2015 and 2014, the Company had $10,759 and $11,058, respectively, of unrecognized tax benefits of which $9,375 and $10,041, respectively, would impact the effective income tax rate in future periods. Accrued liabilities for interest and penalties were $650 and $353 at June 30, 2016 and 2015, respectively. Interest and penalties (expense and/or benefit) are recorded as a component of the provision (benefit) for income taxes in the consolidated financial statements. The Company believes that it is reasonably possible that its unrecognized tax benefits could decrease by $4,200 by June 30, 2017 due to settlements and expirations of statutes of limitations; all of which would reduce the income tax provision for continuing operations. The Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction, various U.S. state jurisdictions and several foreign jurisdictions. With few exceptions, the Company is no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations by tax authorities for years prior to 2013. However, to the extent we generated NOLs or tax credits in closed tax years, future use of the NOL or tax credit carry forward balance would be subject to examination within the relevant statute of limitations for the year in which utilized. The Company is no longer subject to tax examinations in the United Kingdom for years prior to 2013. Given the uncertainty regarding when tax authorities will complete their examinations and the possible outcomes of their examinations, a current estimate of the range of reasonably possible significant increases or decreases of income tax that may occur within the next twelve months cannot be made. Although there are various tax audits currently ongoing, the Company does not believe the ultimate outcome of such audits will have a material impact on the Company’s consolidated financial statements.

X
- References No definition available. + Details
Name: | us-gaap_IncomeTaxDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32559-109319 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32718-109319 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32639-109319 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32537-109319 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration