INCOME TAX EXPENSE

9 Months Ended

Jun. 30, 2015

The third quarter 2015 effective income tax rate from continuing operations was 31.0% compared to 24.2% in the third quarter of 2014. The effective income tax rate in the first nine months of 2015 was 31.5% compared to 29.7% in the first nine months of 2014. The income tax expense in the first nine months of 2015 was favorably impacted by the extension of the research credit as a result of the Tax Increase Prevention Act of 2014 reducing the year-to-date effective tax rate by 2.1%. The income tax expense in the third quarter and first nine months of 2015 was favorably impacted by additional fiscal 2014 foreign tax credit benefit reducing the third quarter and year-to-date effective tax rate by 1.6% and 0.6%; $0.1 million decrease of foreign uncertain tax positions primarily as a result of the settlement of an audit reducing the third quarter and year-to-date effective tax rate by 0.7% and 0.3%; rerating of foreign intangible deferred tax liabilities reducing the third quarter and year-to-date effective tax rate by 0.9% and 0.3%; and a reduction in German valuation allowance reducing the third quarter and year-to-date effective tax rate by 0.9% and 0.3%. The income tax expense in the third quarter and first nine months of 2015 was unfavorably impacted by losses in foreign jurisdictions for which no tax benefit was recorded increasing the third quarter and year-to-date effective tax rate by 0.7% and 0.8%, respectively

The income tax expense in the third quarter and first nine months of 2014 was favorably impacted by a $1.0 million decrease of uncertain tax positions as a result of a lapse of the applicable statute of limitations reducing the third quarter and year-to-date effective tax rate by 6.8% and 2.5%; additional fiscal 2013 research credit benefit reducing the third quarter and year-to-date effective tax rate by 2.8% and 1.0%; and additional fiscal 2013 foreign tax credit benefit reducing the third quarter and year-to-date effective tax rate by 2.1% and 0.8%.

The Company estimates the fiscal 2015 effective tax rate from continuing operations will be approximately 33%. The Company does not anticipate a material change in the amount of unrecognized tax benefits in the next twelve months.