INCOME TAXES

9 Months Ended

Jun. 30, 2012

Income Tax Disclosure [Text Block]

NOTE 7 – INCOME TAXES

The tax rate for the current quarter was a provision of 39.7%, compared to a benefit of 81.3% in the prior year quarter. The current quarter’s rate reflects the benefit from the release of previously established reserves for uncertain tax positions on conclusion of certain tax audits. The prior year effective rate included benefits arising on the filing of the tax returns in various jurisdictions and the impact of tax planning initiatives related to unremitted foreign earnings. Excluding discrete items, the current quarter’s rate was 50.5%, which reflects the impact of permanent differences not deductible in determining taxable income, mainly limited deductibility of restricted stock, as well as the impact of tax reserves and a change in earnings mix between domestic and non-domestic operations. Excluding discrete items, the prior year quarter’s rate was 77.7%, which reflected the combined effects of the nominal pretax income in the quarter with a forecast full year pretax loss for 2011, as well as fluctuations in the full year expected effective tax rate driven by changes in earnings mix between domestic and non-domestic operations.

The tax rate for the nine months ended June 30, 2012 was a provision of 45.0%, compared to a benefit of 48.5% in the prior year. The current year rate reflects the benefit from the release of previously established reserves for uncertain tax positions on conclusion of certain tax audits. The prior year effective rate included benefits arising in connection with the retroactively extended research tax credit signed into law on December 22, 2010, the filing of tax returns in various jurisdictions, and the impact of tax planning initiatives related to unremitted foreign earnings. Excluding discrete items, the current year rate was 51.6%, which reflected the impact of permanent differences that are not deductible in determining taxable income, mainly limited deductibility of restricted stock, as well as the impact of tax reserves and a change in earnings mix between domestic and non-domestic operations. Excluding discrete items, the prior year rate was a benefit of 27.0% and reflected the impact of permanent differences not deductible in determining taxable income as well as the impact of tax reserves and changes in earnings mix.