Income Tax Expense (Tables)

12 Months Ended

Sep. 30, 2014

Total income tax expense (benefit) for the years ended September 30, 2014, 2013 and 2012 was allocated to income tax expense as follows:

(Dollars in thousands)	2014		2013		2012
Income tax expense from Continuing Operations	$	19,594		18,335		17,408
Income tax (benefit) expense from Discontinued Operations		(6,034)		(5,215)		7,397
Total income tax expense	$	13,560		13,120		24,805

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)	2014		2013		2012
United States	$	56,196		43,159		46,883
Foreign		6,011		6,436		5,299
Total income before income taxes	$	62,207		49,595		52,182

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, 2014, 2013 and 2012 consist of:

(Dollars in thousands)	2014		2013		2012
Federal:
Current	$	18,756		10,723		11,144
Deferred		(2,442)		2,942		2,954
State and local:
Current		1,397		896		1,372
Deferred		(245)		642		309
Foreign:
Current		2,044		2,033		1,863
Deferred		84		1,099		(234)
Total	$	19,594		18,335		17,408

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, 2014, 2013 and 2012 differs from the expected tax expense for those years (computed by applying the U.S. Federal corporate statutory rate) as follows:

	2014			2013		2012
Federal corporate statutory rate		35.0	%	35.0	%	35.0	%
State and local, net of Federal benefits		2.0		2.7		3.3
Foreign		(1.7)		(1.9)		(0.7)
Research credit		(1.0)		(2.5)		(0.3)
Domestic production deduction		(2.9)		(2.5)		(2.4)
Change in uncertain tax positions		(2.9)		0.1		(3.6)
Purchase accounting adjustment		—		—		1.0
Executive compensation		1.3		1.8		0.6
Valuation allowance		1.3		4.0		0.2
Other, net		0.4		0.3		0.3
Effective income tax rate		31.5	%	37.0	%	33.4	%

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, 2014 and 2013 are presented below:

(Dollars in thousands)	2014		2013
Deferred tax assets:
Inventories, long-term contract accounting, contract cost reserves and other	$	7,710		6,825
Pension and other postretirement benefits		6,974		7,417
Net operating loss carryforward — domestic		658		848
Net operating loss carryforward — foreign		4,702		3,955
Capital loss carryforward		—		240
Other compensation-related costs and other cost accruals		13,996		19,325
State credit carryforward		1,276		1,099
Total deferred tax assets		35,316		39,709
Deferred tax liabilities:

Goodwill		(14,338)		(14,576)
Acquisition assets		(57,795)		(61,403)
Depreciation, software amortization		(16,380)		(36,396)
Net deferred tax liabilities before valuation allowance		(53,197)		(72,666)
Less valuation allowance		(4,297)		(3,780)
Net deferred tax liabilities	$	(57,494)		(76,446)

Reconciliation Of Unrecognized Tax Benefits

A reconciliation of the Company’s unrecognized tax benefits for the years ended September 30, 2014 and 2013 is presented in the table below:

(Dollars in millions)	2014		2013
Balance as of October 1,	$	2.2		1.8
Increases related to prior year tax positions		—		0.5
Decreases related to prior year tax positions		(0.7)		—
Increases related to current year tax positions		—		0.2
Decreases related to settlements with taxing authorities		—		(0.1)
Lapse of statute of limitations		(1.0)		(0.2)
Balance as of September 30,	$	0.5		2.2

- 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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