Non-operating Income (Expense)
Net non-operating income for fiscal year 2012 was approximately
$2.7 millioncompared to net non-operating expense of approximately $0.8 millionfor fiscal year 2011. This increase is primarily due to an increase in interest income of approximately $1.6 million. Fiscal years 2012 and 2011 also include credit based impairment losses related to our investments in auction rates securities of approximately $4.0 millionand $4.3 million, respectively. Income Tax Expense The effective tax rates for fiscal years 2012 and 2011 were 29.5% and 31.0%, respectively. The effective tax rates for fiscal years 2012 and 2011 were less than the 35.0% U.S. statutory federal income tax rate, mainly due to the mix of earnings from jurisdictions that have a lower statutory tax rate than the U.S., our continued determination to permanently reinvest overseas the cumulative unremitted earnings of our significant non-US affiliates, tax benefits realized upon the expiration of statutes of limitations or settlements with tax authorities and the domestic manufacturing deductions.
The decrease in the effective tax rate for fiscal year 2012 as compared to fiscal year 2011 was primarily attributable to increases in tax benefits realized upon the expiration of statutes of limitation or settlements with tax authorities and the net reduction of valuation allowances.
We recorded net unrecognized income tax benefits of approximately
$34.7 millionand $31.4 million, including accrued interest and penalties of approximately $3.2 millionand $2.8 millionat June 30, 2012and 2011, respectively. We have recognized approximately $0.6 millionand $0.8 millionof interest expense for fiscal years 2012 and 2011, respectively. The non-current portion of the net unrecognized income tax benefits represents benefits with respect to which we do not anticipate making a payment within 12 months of the balance sheet date. If recognized, all of the net unrecognized income tax benefit would be recognized as a reduction of income tax expense, affecting the effective income tax rate. We have recognized a net decrease in unrecognized tax benefits for the fiscal year ended June 30, 2012as compared to fiscal year 2011, which includes a reduction in the effective tax rate of 2.1% and income tax expense by approximately $5.0 million, primarily due to the expiration of statutes of limitations. We estimate that within the next 12 months, we will decrease the unrecognized income tax benefits by between approximately $9.5 millionto $11.5 milliondue to the expiration of statues of limitations and settlement of issues with tax authorities, which we believe would increase earnings as a result of a reduction in tax expense. However, audit outcomes and the timing of audit settlements are subject to significant uncertainty. Over the next 12 months, it is reasonably possible that our tax positions will continue to generate liabilities for uncertain tax positions.
Net Income Attributable to