XML 54 R18.htm IDEA: XBRL DOCUMENT v2.4.0.6
Income Taxes
6 Months Ended
Mar. 31, 2013
Income Tax Disclosure [Abstract]  
Income Taxes
Income Taxes
The income tax provision includes U.S. federal, state and local, and foreign income taxes and is based on the application of a forecasted annual income tax rate applied to the current quarter's year-to-date pre-tax income for fiscal 2013. In determining the estimated annual effective income tax rate, the Company analyzes various factors, including projections of the Company's annual earnings, taxing jurisdictions in which the earnings will be generated, the impact of state and local income taxes, the Company's ability to use tax credits and net operating loss carryforwards, and available tax planning alternatives. Discrete items, including the effect of changes in tax laws, tax rates, and certain circumstances with respect to valuation allowances or other unusual or non-recurring tax adjustments are reflected in the period in which they occur as an addition to, or reduction from, the income tax provision, rather than being included in the estimated annual effective income tax rate.
For the three months and six months ended March 31, 2013, the Company recorded income tax expense of $3.2 million and $4.4 million, respectively, that represents an effective tax rate of approximately 50% and 43%, respectively. A discrete item was recorded in the three months and six months ended March 31, 2013 related to an increase in the valuation allowance of approximately $1.4 million for California net operating loss carryforwards based on the Company's estimated inability to use these carryforwards in the future as a result of a change in the Company's legal structure. The difference between the recorded provision for income taxes and the tax provision, based on the federal statutory rate of 35%, was primarily attributable to the impact of this discrete item, the differential in foreign tax rates and non-deductible stock-based compensation expense.
For the three months and six months ended March 31, 2012, the Company recorded an income tax expense of $1.4 million and $3.0 million, respectively, that represents an effective tax rate of approximately 28% and 29%, respectively. The difference between the recorded provision for income taxes and the tax provision, based on the federal statutory rate of 35%, was primarily attributable to the differential in foreign tax rates and non-deductible stock-based compensation expense.
As of March 31, 2013, the Company had no unrecognized tax positions that would impact its effective tax rate.