Income Tax Expense (Tables)

12 Months Ended

Sep. 30, 2013

Total income tax expense (benefit) for the years ended September 30, 2013, 2012 and 2011 was allocated to income tax expense as follows:

(Dollars in thousands)	2013		2012		2011
Income tax expense from Continuing Operations	$	18,335		17,408		16,922
Income tax (benefit) expense from Discontinued Operations		(5,215)		7,397		7,535
Total income tax expense	$	13,120		24,805		24,457

Components Of Income From Continuing Operations Before Income Taxes

The components of income from continuing operations before income taxes consisted of the following for the years ended September 30:

(Dollars in thousands)	2013		2012		2011
United States	$	43,159		46,883		49,702
Foreign		6,436		5,299		4,303
Total income before income taxes	$	49,595		52,182		54,005

Principal Components Of Income Tax Expense (Benefit) From Continuing Operations

The principal components of income tax expense (benefit) from continuing operations for the years ended September 30, 2013, 2012 and 2011 consist of:

(Dollars in thousands)	2013		2012		2011
Federal
Current	$	10,723		11,144		9,667
Deferred		2,942		2,954		4,672
State and local:
Current		896		1,372		1,801
Deferred		642		309		464
Foreign:
Current		2,033		1,863		3,049
Deferred		1,099		(234)		(2,731)
Total	$	18,335		17,408		16,922

Schedule Of Actual Income Tax Expense (Benefit) From Continuing Operations

The actual income tax expense (benefit) from continuing operations for the years ended September 30, 2013, 2012 and 2011 differs from the expected tax expense for those years (computed by applying the U.S. Federal corporate statutory rate) as follows:

	2013			2012			2011
Federal corporate statutory rate		35.0	%		35.0	%		35.0	%
State and local, net of Federal benefits		2.7			3.3			3.7
Foreign		(1.9)			(0.7)			(2.3)
Research credit		(2.5)			(0.3)			(1.3)
Domestic production deduction		(2.5)			(2.4)			(2.2)
Change in uncertain tax positions		0.1			(3.6)			(0.5)
Purchase accounting adjustment		—			1.0			—
Executive compensation		1.8			0.6			0.5
Valuation allowance		4.0			0.2			(1.7)
Other, net		0.3			0.3			0.1
Effective income tax rate		37.0	%		33.4	%		31.3	%

Tax Effects Of Temporary Differences That Give Rise To Significant Portions Of The Deferred Tax Assets And Liabilities

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities at September 30, 2013, and 2012 are presented below.

(Dollars in thousands)	2013		2012
Deferred tax assets:
Inventories, long-term contract accounting, contract cost reserves and other	$	6,825		7,819
Pension and other postretirement benefits		7,417		13,437
Net operating loss carryforward?—?domestic		848		562
Net operating loss carryforward?—?foreign		3,955		3,841
Capital loss carryforward		240		240
Other compensation-related costs and other cost accruals		19,325		17,589
State credit carryforward		1,099		997
Total deferred tax assets		39,709		44,485
Deferred tax liabilities:
Goodwill		(14,576)		(12,783)
Acquisition assets		(61,403)		(63,323)
Depreciation , software amortization		(36,396)		(33,799)
Net deferred tax liabilities before valuation allowance		(72,666)		(65,420)
Less valuation allowance		(3,780)		(942)
Net deferred tax liabilities	$	(76,446)		(66,362)

Reconciliation Of Unrecognized Tax Benefits

A reconciliation of the Company’s unrecognized tax benefits for the years ended September 30, 2013, and 2012 is presented in the table below:

(Dollars in millions)	2013		2012
Balance as of October 1,	$	1.8		3.6
Increases related to prior year tax positions		0.5		—
Decreases related to prior year tax positions		—		(0.3)
Increases related to current year tax positions		0.2		0.1
Decreases related to settlements with taxing authorities		(0.1)		—
Lapse of statute of limitations		(0.2)		(1.6)
Balance as of September 30,	$	2.2		1.8

- Definition

Tabular disclosure of tax positions taken in the tax returns filed or to be filed for which it is more likely than not that the tax position will not be sustained upon examination by taxing authorities (i.e., uncertain tax positions) and other types of income tax contingencies, including: (1) the policy on classification of interest and penalties; (2) a tabular reconciliation of the total amounts of unrecognized tax benefits at the beginning and end of the period; the total amount(s) of: (3) unrecognized tax benefits that, if recognized, would affect the effective tax rate, and (4) interest and penalties recognized in each of the income statement and balance sheet; (5) for positions for which it is reasonably possible that the total amounts unrecognized will significantly change within 12 months of the reporting date the: (i) nature of the uncertainty, (ii) nature of the event that could occur that would cause the change, and (iii) an estimate of the range of the reasonably possible change or a statement that an estimate of the range cannot be made; and (6) a description of tax years that remain subject to examination by major tax jurisdictions.

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