Income Taxes (Tables)

12 Months Ended

Sep. 30, 2020

Income Taxes

Components of income (loss) before income taxes

Income (loss) from continuing operations before income taxes includes the following components (in thousands):

	Years Ended September 30,
	2020		2019		2018
	(in thousands)
United States	$	(66,358)	$	(535)	$	(51,049)
Foreign		62,913		52,881		65,935
Total	$	(3,445)	$	52,346	$	14,886

Significant components of the provision (benefit) for income taxes

Significant components of the provision (benefit) for income taxes from continuing operations are as follows:

	Years Ended September 30,
	2020		2019		2018
	(in thousands)
Current:
Federal	$	(3,082)	$	(710)	$	(4,775)
State		2,297		2,898		976
Foreign		9,565		10,523		19,882
Total current		8,780		12,711		16,083
Deferred:
Federal		(10,733)		(4,553)		(7,874)
State		(6,960)		(135)		482
Foreign		2,533		3,017		(1,598)
Total deferred		(15,160)		(1,671)		(8,990)
Provision (benefit) for income taxes	$	(6,380)	$	11,040	$	7,093

Reconciliation of income tax computed at the U.S. federal statutory tax rate to income tax expense (benefit)

The reconciliation of income tax computed at the U.S. federal statutory tax rate to income tax expense (benefit) is as follows:

	Years Ended September 30,
	2020		2019		2018
	(in thousands)
Tax expense (benefit) at U.S. statutory rate	$	(721)	$	10,992	$	3,124
State income taxes, net of federal tax effect		(1,879)		1,416		(237)
Base Erosion and Anti-abuse Tax		3,148		540		—
Global Intangible Low-Tax Income		7,387		8,182		—
Foreign rate differential		(494)		2,149		5,684
Nondeductible expenses		652		4		1,020
Stock based compensation		1,056		438		226
Acquisition related Items		(704)		831		166
Tax credits		(3,962)		(4,767)		(2,656)
Reserve for tax contingencies		(575)		(1,468)		(1,047)
Deferred tax asset valuation allowance		(9,017)		(10,007)		8,784
Impact of U.S. Tax Reform		—		—		(7,053)
Non-controlling interest in equity arrangements		(967)		1,802		99
Other		(304)		928		(1,017)
Provision (benefit) for income taxes	$	(6,380)	$	11,040	$	7,093

Significant components of deferred tax assets and liabilities

Significant components of our deferred tax assets and liabilities are as follows:

	September 30,
	2020		2019
	(in thousands)
Deferred tax assets:
Accrued employee benefits	$	17,371	$	11,409
Allowances for loss contingencies		2,726		3,561
Debt obligation basis difference		4,630		—
Deferred compensation		2,930		3,071
Foreign currency mark-to-market		919		—
Inventory valuation		4,897		8,036
Long-term contracts		7,335		6,995
Prepaid and accrued expenses		151		1,816
Property, plant and equipment		1,632		—
Retirement benefits		3,930		4,967
Tax credit carryforwards		39,356		33,118
Loss carryforwards		46,614		36,248
Other		308		818
Total gross deferred tax assets		132,799		110,039
Valuation allowance		(59,817)		(69,098)
Total deferred tax assets		72,982		40,941
Deferred tax liabilities:
Debt obligation basis difference		—		(4,582)
Deferred revenue		(15,617)		(12,135)
Intangible assets		(36,261)		(18,592)
Lease right-of-use assets		(20,271)		—
Property, plant and equipment		—		(4,524)
Unremitted earnings		(2,159)		(977)
Other		(71)		(587)
Total deferred tax liabilities		(74,379)		(41,397)
Net deferred tax asset (liability)	$	(1,397)	$	(456)

Expiration of tax credit carryforwards

At September 30, 2020, we have federal and state income tax credit carryforwards (in thousands) which begin to expire as follows:

U.S. foreign tax credits	$	4,547	2024
U.S. research and development tax credits		20,475	2025
State research and development tax credits		28,136	2038 & Do not expire

Expiration of federal, state and foreign net operating losses

We have federal, state and foreign capital and net operating losses (in thousands) which begin to expire as follows:

U.S. net operating loss carryforwards	$	159,676	2033
U.S. capital loss carryforwards		10,052	2023
State loss carryforwards		118,791	2023
State capital loss carryforwards		27,639	2023
Foreign net operating loss carryforwards		18,959	Do not expire

Aggregate changes in the total gross unrecognized tax benefits

During fiscal 2020 and 2019, the aggregate changes in our total gross amount of unrecognized tax benefits are summarized as follows:

	September 30,
	2020		2019
	(in thousands)
Balance at beginning of year	$	18,575	$	9,942
Additions (reductions) for tax positions taken in prior years		(8,794)		8,458
Recognition of benefits from expiration of statutes		(904)		(776)
Additions for tax positions related to the current year		890		951
Balance at end of year	$	9,767	$	18,575