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Income Taxes
6 Months Ended
Mar. 31, 2014
Income Tax Disclosure [Abstract]  
Income Taxes

14. Income Taxes

The Company recorded income tax provisions associated with income from continuing operations of $1.2 million and $0.9 million for the three months ended March 31, 2014 and 2013, respectively, representing effective tax rates of 33.0% and 21.2%, respectively. The Company recorded income tax provisions associated with income from continuing operations of $2.7 million and $2.8 million for the six months ended March 31, 2014 and 2013, respectively, representing effective tax rates of 30.5% and 26.7%, respectively. The difference between the U.S. federal statutory tax rate of 35.0% and the Company’s effective tax rate for the three and six months ended March 31, 2014 and 2013 reflects the impact of state income taxes, permanent tax items and discrete tax benefits. Discrete tax benefits aggregated less than $0.1 million and $0.2 million for the three and six months ended March 31, 2014, respectively, and $0.4 million and $0.6 million for the three and six months ended March 31, 2013, respectively. The discrete tax items in the fiscal 2013 periods include a one-time capital gain carryback benefit and retroactive federal R&D tax credits that aggregated $0.4 million. The three months ended March 31, 2014 reflects the impact of gains from certain debt securities in our available-for-sale investment portfolio and the three months ended March 31, 2013 reflects the impact of gains on the sale of OctoPlus N.V. (“OctoPlus”) and certain debt securities in our available-for-sale investment portfolio. The six months ended March 31, 2014 reflects the impact of a gain related to a Vessix contingent consideration payment and certain debt securities in our available-for-sale investment portfolio. The six months ended March 31, 2013 reflects the impact of gains on the sale of Vessix, OctoPlus and certain debt securities in our available-for-sale investment portfolio. Each of these gains has had a tax expense recognized which has been offset by the reversal of capital loss valuation allowances.

The Company did not have any discontinued operations activity in the three and six months ended March 31, 2014. The Company recorded an income tax expense from discontinued operations of $0.3 million for the three and six months ended March 31, 2013 with the effective tax rate applied to discontinued operations of 32.8%.

The total amount of unrecognized tax benefits including interest and penalties that, if recognized, would affect the effective tax rate as of March 31, 2014 and September 30, 2013, respectively, are $0.9 million and $1.0 million. Currently, the Company does not expect the liability for unrecognized tax benefits to change significantly in the next 12 months with the above balances classified on the condensed consolidated balance sheets in other long-term liabilities. Interest and penalties related to unrecognized tax benefits are recorded in income tax expense.

The Company files income tax returns, including returns for its subsidiaries, in the U.S. federal jurisdiction and in various state jurisdictions. Uncertain tax positions are related to tax years that remain subject to examination. In the first quarter of fiscal 2014 the Internal Revenue Service commenced an examination of the Company’s U.S. income tax return for fiscal 2012. U.S. income tax returns for years prior to fiscal 2010 are no longer subject to examination by federal tax authorities. For tax returns for state and local jurisdictions, the Company is no longer subject to examination for tax years generally before fiscal 2003.