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Income Taxes
9 Months Ended
Mar. 31, 2014
Income Tax Disclosure [Abstract]  
Income Taxes

7.  Income Taxes

The Company recorded a benefit from income taxes of $1.0 million for the three months ended March 31, 2014 and a provision for income taxes of $39.1 million for the nine months ended March 31, 2014 primarily due to a one-time, non-cash charge to establish a valuation allowance for a significant portion of the Company’s deferred tax assets and other discrete items.

The Company regularly assesses the need for a valuation allowance against its deferred tax assets. Significant judgment is required to determine whether a valuation allowance is necessary and the amount of such valuation allowance, if appropriate. The Company considers all available evidence, both positive and negative to determine, based on the weight of available evidence, whether it is more likely than not that some or all of the deferred tax assets will not be realized. In evaluating the need for a valuation allowance the Company considers, among other things, the nature, frequency and severity of current and cumulative losses, forecasts of future profitability, and the duration of statutory carryforward periods. The Company determined that the significant negative evidence associated with cumulative losses in recent periods and current results outweighed the positive evidence as of December 31, 2013 and accordingly, the near-term realization of certain of these assets was deemed unlikely. The Company recorded a one-time, non-cash charge to income tax expense of $40.2 million to establish a valuation allowance against a significant portion of its deferred tax assets in the second quarter of fiscal 2014. The Company will continue to assess the likelihood that the deferred tax assets will be realizable at each reporting period and the valuation allowance will be adjusted accordingly.

The Company’s estimated annual effective tax rate is negative 5%. This differs from the annual statutory rate of 35% primarily due to a one-time, non-cash charge to establish a valuation allowance for a significant portion of the Company’s deferred tax assets.

The Company recorded a provision for income taxes of $2.5 million for the three months ended March 31, 2013 and a benefit from income taxes of $29.5 million for the nine months ended March 31, 2013. The Company recorded a goodwill impairment charge of $92.4 million in the financial statements for the nine months ended March 31, 2013 and had an associated tax benefit of $28.5 million due to the impairment of goodwill that is deductible for tax purposes. As of March 31, 2013 the Company’s estimated annual effective tax rate was 31%. This differs from the annual statutory rate of 35% due to various permanent differences, most significantly stock-based compensation.