Income Taxes (Tables)

12 Months Ended

Sep. 30, 2020

Summary Of Income (Loss) Before Income Taxes

Our income (loss) before income taxes consisted of the following:

(in thousands)	Year ended September 30,
	2020			2019			2018
Domestic	$	(73,865	)	$	(112,077	)	$	(114,591	)
Foreign		208,571			132,377			143,247
Total income before income taxes	$	134,706		$	20,300		$	28,656

Schedule Of Provision For (Benefit From) Income Taxes

Our provision (benefit) for income taxes consisted of the following:

(in thousands)	Year ended September 30,
	2020			2019			2018
Current:
Federal	$	2,187		$	13,130		$	3,009
State		1,266			(945	)		2,003
Foreign		25,199			33,867			28,213
		28,652			46,052			33,225
Deferred:
Federal		(26,811	)		22,911			(12,594	)
State		(4,063	)		1,759			(445	)
Foreign		6,233			(22,962	)		(43,517	)
		(24,641	)		1,708			(56,556	)
Total provision (benefit) for income taxes	$	4,011		$	47,760		$	(23,331	)

Summary Of Federal Income Tax Rate And Effective Income Tax Rate

Taxes computed at the statutory federal income tax rates are reconciled to the provision (benefit) for income taxes as follows:

(in thousands)	Year ended September 30,
	2020					2019					2018
Statutory federal income tax rate	$	28,288		21	%	$	4,263		21	%	$	7,021		25	%
Change in valuation allowance		(16,489	)	(12	)%		66,417		327	%		(181,047	)	(632	)%
Transition impact of U.S. Tax Act		—		—	%		—		—	%		126,122		440	%
Federal rate change		—		—	%		—		—	%		69,648		243	%
State income taxes, net of federal tax benefit		(2,998	)	(2	)%		607		3	%		2,401		8	%
Federal research and development credits		(5,483	)	(4	)%		(3,731	)	(18	)%		(3,058	)	(11	)%
Uncertain tax positions		3,072		2	%		2,611		13	%		(4,646	)	(16	)%
Foreign rate differences		(22,074	)	(16	)%		(26,952	)	(133	)%		(38,743	)	(135	)%
Foreign tax on U.S. provision		4,523		3	%		6,547		32	%		2,736		10	%
Excess tax benefits from restricted stock		(1,743	)	(1	)%		(5,940	)	(29	)%		(11,641	)	(41	)%
Audits and settlements		—		—	%		51		—	%		2,352		8	%
U.S. permanent items		6,590		5	%		2,483		12	%		5,408		19	%
BEAT		(1,759	)	(1	)%		1,759		9	%		—		—	%
GILTI, net of foreign tax credits		14,899		11	%		6,170		31	%		—		—	%
Foreign-Derived Intangible Income (FDII)		(2,461	)	(2	)%		(6,409	)	(32	)%		—		—	%
Other, net		(354	)	(1	)%		(116	)	(1	)%		116		1	%
Provision (benefit) for income taxes	$	4,011		3	%	$	47,760		235	%	$	(23,331	)	(81	)%

Schedule Of Deferred Tax Assets And Liabilities

The significant temporary differences that created deferred tax assets and liabilities are shown below:

(in thousands)	September 30,
	2020			2019
Deferred tax assets:
Net operating loss carryforwards	$	61,495		$	26,462
Foreign tax credits		8,074			—
Capitalized research and development		30,109			34,560
Pension benefits		14,370			14,838
Prepaid expenses		13,579			41,739
Deferred revenue		6,021			9,899
Stock-based compensation		13,630			12,306
Other reserves not currently deductible		15,130			20,986
Amortization of intangible assets		162,426			168,376
Research and development and other tax credits		70,695			49,995
Lease liabilities		52,224			—
Fixed assets		47,457			45,450
Capital loss carryforward		35,851			31,248
Deferred interest		—			10,864
Other		1,849			1,623
Gross deferred tax assets		532,910			468,346
Valuation allowance		(205,423	)		(177,663	)
Total deferred tax assets		327,487			290,683
Deferred tax liabilities:
Acquired intangible assets not deductible		(65,894	)		(42,554	)
Lease assets		(35,885	)		—
Pension prepayments		(1,155	)		(2,532	)
Deferred revenue		(594	)		(19,312	)
Depreciation		(7,481	)		—
Unbilled accounts receivable		(12,699	)		(31,005	)
Deferred income		(5,821	)		(19,040	)
Prepaid commissions		(17,124	)		(17,423	)
Other		(2,302	)		(1,866	)
Total deferred tax liabilities		(148,955	)		(133,732	)
Net deferred tax assets	$	178,532		$	156,951

Summary Of Valuation Allowance

The changes to the valuation allowance were primarily due to the following:

(in thousands)	Year ended September 30,
	2020		2019			2018
Valuation allowance, beginning of year	$	177,663	$	141,950		$	279,683
Net release of valuation allowance⁽¹⁾		—		(1,772	)		(2,791	)
Net increase (decrease) in deferred tax assets with a full valuation allowance⁽²⁾		27,760		37,485			(134,942	)
Valuation allowance, end of year	$	205,423	$	177,663		$	141,950

(1)	In 2019 and 2018 this is attributable to the release in foreign jurisdictions.

(2)

In 2020, this change is largely attributed to the Onshape acquisition, the adoption of ASC 842 and the impact to the change in scheduling of the reversal of existing temporary differences. In 2019, this is due in large part to a change in method of accounting for federal income tax purposes resulting in deferred tax liabilities that cannot be offset against available tax attributes in the scheduling of the reversal of existing temporary differences, and by the adoption of ASC 606. In 2018, this is primarily attributable to U.S. tax reform: the utilization of tax attributes used to offset the transition tax, the revaluation of the U.S. net deferred tax assets and liabilities, the ability to realize net operating losses from the reversal of existing deferred tax assets which can now be carried forward indefinitely and can therefore be netted against deferred tax liabilities for indefinite-lived intangibles.

Schedule Of Unrecognized Tax Benefit

	Year ended September 30,
Unrecognized tax benefits (in thousands)	2020			2019			2018
Unrecognized tax benefit, beginning of year	$	11,484		$	9,812		$	14,752
Tax positions related to current year:
Additions		2,173			1,466			1,456
Tax positions related to prior years:
Additions		2,452			1,375			—
Reductions		(2	)		(9	)		(4,631	)
Settlements		—			(1,160	)		—
Statute expirations		—			—			(1,765	)
Unrecognized tax benefit, end of year	$	16,107		$	11,484		$	9,812

Summary Of Income Tax Examinations Years

As of September 30, 2020, we remained subject to examination in the following major tax jurisdictions for the tax years indicated:

Major Tax Jurisdiction		Open Years
United States		2016 through 2020
Germany		2015 through 2020
France		2017 through 2020
Japan		2015 through 2020
Ireland		2016 through 2020