INCOME TAXES:
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Nov. 30, 2011
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Income Tax Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes | INCOME TAXES: The sources of income from continuing operations before the provision for income taxes and noncontrolling interest are as follows:
The following presents the breakdown between current and non-current net deferred tax assets:
Net deferred tax assets and liabilities consist of the following:
The valuation allowance relates primarily to foreign tax credits and certain net operating losses. The Company's assessment is that it is not more likely than not, that these deferred tax assets will be realized. The valuation allowance increased by $4,127 during fiscal year 2011 with a majority of the increase attributable to the net operating loss carry forwards resulting from the fiscal year 2011 acquisition of Infotec Japan. A reconciliation of the statutory United States federal income tax rate to the Company’s effective income tax rate is as follows:
The Company's U.S. business has sufficient cash flow and liquidity to fund its operating requirements and the Company expects and intends that profits earned outside the United States will be fully utilized and reinvested to fund international expansion. Accordingly, the Company has not provisioned U.S. taxes and foreign withholding taxes on non-U.S. subsidiaries for which the earnings are permanently reinvested. As of November 30, 2011, there were approximately $181,400 of cumulative undistributed earnings of foreign subsidiaries. It is not currently practical to estimate the amount of income tax that might be payable if any earnings were to be distributed by individual foreign subsidiaries. As of November 30, 2011, the Company had $2,455 in net operating loss carry forwards for the Company's UK subsidiaries that do not expire. It also had $58,354 in net operating loss carry forwards for Infotec Japan that expire in the fiscal years ending November 30, 2014 to 2018. The Company also had $3,265 in various state job credit carry forwards that expire in the fiscal years ending November 30, 2018 to 2023. In addition, the Company had $2,264 of foreign tax credit carry forwards available to offset future federal tax liabilities, which will expire in varying amounts from November 30, 2015 to November 30, 2021. The Company had $38,659 in federal and state net operating loss carry forwards attributable to the acquisition of Encover, Inc. ("Encover"). These carry forwards will expire in varying amounts during the fiscal years ending November 30, 2014 to November 30, 2030. The Company enjoys tax holidays in certain jurisdictions including China and the Philippines. The tax holidays provide for lower rates of taxation and require various thresholds of investment and business activities in those jurisdictions. These tax holidays are in effect currently and expire over the periods through November 30, 2013. The estimated range of tax benefits from the above tax holidays on diluted earnings per share for fiscal years 2011, 2010, and 2009 were approximately $0.03 to $0.04, $0.01 to $0.02 and $0.03 to $0.04 respectively. The aggregate changes in the balances of gross unrecognized tax benefits during fiscal years 2009, 2010 and 2011 were as follows:
The Company conducts business globally and files income tax returns in various U.S. and foreign tax jurisdictions. The Company is subject to continuous examination and audits by various tax authorities. In the United States, the Company is subject to examination and audits by tax authorities for tax years after fiscal year ended 2007. The Company is not aware of any tax audits in other jurisdictions. The Company was notified by the IRS during fiscal year 2011 that the fiscal year 2009 and 2010 tax returns will be audited. Although timing of the resolution of audits is highly uncertain, the Company does not believe it is reasonably possible that the total amount of unrecognized tax benefits as of November 30, 2011 will materially change in the next twelve months. As of November 30, 2011, $19,000 of the unrecognized tax benefits would affect the effective tax rate if realized. The increase in fiscal year 2011 in unrecognized tax benefit additions for tax positions of prior years is primarily due to the acquisition of Infotec Japan. The Company's policy is to include interest and penalties related to income taxes, including unrecognized tax benefits, within the provision for income taxes. As of November 30, 2011 and 2010, the Company had accrued $1,303 and $1,060, respectively, in income taxes payable related to accrued interest. |