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Income Taxes
6 Months Ended
Jan. 31, 2013
Income Tax Disclosure [Abstract]  
Income Taxes
(13)    Income Taxes

Our effective tax rate was 37.8% for the six months ended January 31, 2013, which includes a net discrete tax expense of approximately $365,000 principally relating to the establishment of a valuation allowance on certain deferred tax assets of one of our foreign subsidiaries, offset, in part, by the passage of legislation that included the retroactive extension of the federal research and experimentation credit from December 31, 2011 to December 31, 2013. Excluding the impact of discrete tax items, our fiscal 2013 estimated effective tax rate is expected to approximate 35.5%.

At January 31, 2013 and July 31, 2012, total unrecognized tax benefits, all of which were recorded as non-current income taxes payable in our Condensed Consolidated Balance Sheets, were $3,074,000 and $2,624,000, respectively, including interest of $126,000 and $95,000, respectively. Of these amounts, $2,351,000 and $1,990,000, respectively, net of the reversal of the federal benefit recognized as deferred tax assets relating to state reserves, excluding interest, would positively impact our effective tax rate, if recognized. Unrecognized tax benefits result from income tax positions taken or expected to be taken on our income tax returns for which a tax benefit has not been recorded in our financial statements.

Our policy is to recognize interest and penalties relating to uncertain tax positions in income tax expense.

Our federal income tax returns for fiscal 2010, fiscal 2011 and fiscal 2012 are subject to potential future IRS audit. Future tax assessments or settlements could have a material adverse effect on our consolidated results of operations and financial condition.