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Income Taxes
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9 Months Ended |
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Dec. 31, 2013
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| Income Tax Disclosure [Abstract] | |
| Income Taxes |
Income Taxes
Our anticipated annual effective tax rate before discrete events of approximately 26.1% has been applied to our consolidated pre-tax income for the nine month period ended December 31, 2013. After accounting for discrete events including the benefit of $1,047 for the release of a liability for uncertain tax positions and $575 related to the reduction of previously estimated tax benefits that was determined not to be payable to the Predecessor owners, our effective rate was 18.4%. For the nine months ended December 31, 2012, the Company’s provision for income taxes reflects an effective rate of approximately 34.8% and an after discrete event effective rate of 35.2%.
During the nine months ended December 31, 2013, we have adopted a permanent reinvestment position whereby we expect to reinvest our foreign earnings for most of our foreign subsidiaries and do not expect to repatriate future earnings. As a result of this policy change, we will no longer accrue a tax liability in anticipation of future dividends from our foreign subsidiaries. The estimated annual effective tax rate for the fiscal year ending March 31, 2014 reflects the estimated taxable earnings of our various foreign subsidiaries and the applicable local tax rates and after accounting for certain permanent differences, such as nondeductible compensation expenses.
For the three month period ended December 31, 2013 and 2012, the Company recorded tax expense of $3,754 and $4,161 on pre-tax income of $16,337 and $11,899, respectively. For the nine month period ended December 31, 2013 and 2012, the Company recorded tax expense of $3,662 and $11,585 on pre-tax income of $19,879 and $32,910, respectively.
As of December 31, 2013, we have established a long-term liability for uncertain tax positions in the amount of $672. During the nine month period ended December 31, 2013, we concluded an income tax audit with the United States Internal Revenue Service. As a result of this, we released reserves for uncertain tax positions taken on the periods under examination and recorded a related tax benefit of $1,047 for the nine months ended December 31, 2013. Our remaining unrecognized tax benefits at December 31, 2013 would affect our effective income tax rate if recognized, though the Company does not expect to recognize any tax benefits in the next twelve months. The Company recognizes related accrued interest and penalties as income tax expense and has accrued $45 for the nine months ended December 31, 2013.
With the conclusion of the audit with the United States Internal Revenue Service, we received a refund of $2,000. This amount related to tax periods associated with our Predecessor owners and was therefore payable as part of "Obligations due to settle the CHS Transactions", see Note 7. Related -Party Transactions. The payment of this refund represented the final transaction tax benefit due to the Predecessor owners. Accordingly, we released $575 of additional estimated tax benefits as a reduction of tax expense that we determined would not be realized and are no longer payable.
As of December 31, 2013, the tax years 2006 through 2013 remain open to examination by the major taxing jurisdictions to which we are subject, except for the United States federal income tax returns, where the federal income tax return for fiscal 2012 and 2013 remain open. The Company's Canadian federal income tax returns are under exam for the Predecessor's tax years ended March 31, 2008, 2009 and 2010. See Note 10. Commitments and Contingencies.
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