James Hardie Industries plc Annual and transition report of foreign private issuers pursuant to Section 13 or 15(d)

Annual and transition report of foreign private issuers pursuant to Section 13 or 15(d)

Income Taxes (Tables)

Income Taxes (Tables)

12 Months Ended

Mar. 31, 2013

Components of Income Tax Benefit (Expense)

Income tax benefit (expense) consists of the following components:


	Years Ended 31 March
(Millions of US dollars)	2013			2012			2011

Income (loss) from operations before income taxes:
Domestic¹	$	110.6		$	97.1		$	66.5
Foreign		(76.9	)		54.0			30.1

Total income before income taxes	$	33.7		$	151.1		$	96.6

Income tax (expense) benefit:
Current:
Domestic¹	$	(5.3	)	$	(2.5	)	$	(15.6	)
Foreign		(14.7	)		454.3			(447.4	)

Current income tax (expense) benefit		(20.0	)		451.8			(463.0	)

Deferred:
Domestic¹		0.7			(4.2	)		(22.2	)
Foreign		31.1			5.6			41.6

Deferred income tax benefit		31.8			1.4			19.4

Total income tax benefit (expense)	$	11.8		$	453.2		$	(443.6	)

¹	Since JHI plc became an Irish parent holding company during fiscal year 2011, domestic represents both Ireland and The Netherlands for fiscal year 2011.

Reconciled Tax at Statutory Rates

Income tax benefit (expense) is reconciled to the tax at the statutory rates as follows:


	Years Ended 31 March
(Millions of US dollars)	2013			2012			2011
Income tax benefit (expense) at statutory tax rates	$	8.8		$	(28.4	)	$	(18.3	)
US state income taxes, net of the federal benefit		(0.1	)		(0.8	)		(1.7	)
Asbestos - effect of foreign exchange		(0.3	)		(1.9	)		(31.7	)
Expenses not deductible		(2.0	)		(0.7	)		(4.0	)
Non-assessable items		1.8			0.4			-
Repatriation of foreign earnings		2.7			(0.1	)		(32.6	)
Amortisation of intangibles		2.0			1.7			(5.9	)
Taxes on foreign income		(1.6	)		2.6			(2.0	)
Tax assessment in dispute		-			478.4			(349.1	)
Other permanent items		0.5			2.0			1.7

Total income tax benefit (expense)	$	11.8		$	453.2		$	(443.6	)

Effective tax (benefit) rate		(35.0	)%		(299.9)%			459.2%

Deferred Tax Assets and Liabilities

Deferred tax balances consist of the following components:


	31 March
(Millions of US dollars)		2013			2012
Deferred tax assets:
Asbestos liability	$	452.7		$	444.5
Other provisions and accruals		56.5			49.0
Net operating loss carryforwards		18.9			11.0
Foreign tax credit carryforwards		123.9			130.2
Capital loss carryforwards		34.5			34.5

Total deferred tax assets		686.5			669.2
Valuation allowance		(165.1	)		(172.3	)

Total deferred tax assets, net of valuation allowance		521.4			496.9

Deferred tax liabilities:
Depreciable and amortisable assets		(110.8	)		(117.3	)
Other		(7.8	)		(8.6	)

Total deferred tax liabilities		(118.6	)		(125.9	)

Net deferred tax assets	$	402.8		$	371.0

Reconciliation of Unrecognised Tax Benefits and Interest and Penalties

A reconciliation of the beginning and ending amount of unrecognised tax benefits and interest and penalties are as follows:


(US$ millions)	Unrecognised tax benefits			Interest and Penalties

Balance at 31 March 2010	$	7.7		$	(26.9	)

Additions for tax positions of the current year		0.1			-
Additions for tax positions of prior year		153.3			195.8
Other reductions for the tax positions of prior periods		(0.4	)		(0.2	)
Foreign currency translation adjustment		24.8			27.6


Balance at 31 March 2011	$	185.5		$	196.3

Additions for tax positions of the current year		0.2			-
Additions for tax positions of prior year		-			6.1
Settlements paid during the current period		(184.4	)		(208.9	)
Other reductions for the tax positions of prior periods		(5.2	)		-
Foreign currency translation adjustment		6.5			7.4


Balance at 31 March 2012	$	2.6		$	0.9

Additions for tax positions of the current year		0.1			-
Additions (deletions) for tax positions of prior year		2.6			(0.1	)
Expiration of statute of limitations		(2.8	)		(0.7	)
Other reductions for the tax positions of prior periods		(1.0	)		-


Balance at 31 March 2013	$	1.5		$	0.1

- Definition

Tabular disclosure of tax positions taken in the tax returns filed or to be filed for which it is more likely than not that the tax position will not be sustained upon examination by taxing authorities (i.e., uncertain tax positions) and other types of income tax contingencies, including: (1) the policy on classification of interest and penalties; (2) a tabular reconciliation of the total amounts of unrecognized tax benefits at the beginning and end of the period; the total amount(s) of: (3) unrecognized tax benefits that, if recognized, would affect the effective tax rate, and (4) interest and penalties recognized in each of the income statement and balance sheet; (5) for positions for which it is reasonably possible that the total amounts unrecognized will significantly change within 12 months of the reporting date the: (i) nature of the uncertainty, (ii) nature of the event that could occur that would cause the change, and (iii) an estimate of the range of the reasonably possible change or a statement that an estimate of the range cannot be made; and (6) a description of tax years that remain subject to examination by major tax jurisdictions.

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