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Income Taxes
9 Months Ended
Jun. 30, 2014
Income Tax Disclosure [Abstract]  
Income Taxes

14. Income Taxes

The Company recorded income tax provisions associated with income from continuing operations of $1.7 million and $1.1 million for the three months ended June 30, 2014 and 2013, respectively, representing effective tax rates of 32.0% and 26.1%, respectively. The Company recorded income tax provisions associated with income from continuing operations of $4.4 million and $3.9 million for the nine months ended June 30, 2014 and 2013, respectively, representing effective tax rates of 31.1% and 26.5%, 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 nine months ended June 30, 2014 and 2013 reflects the impact of state income taxes, permanent tax items such as valuation allowance releases associated with gains from our strategic investments and our available-for-sale investment portfolio and discrete tax benefits. Discrete tax benefits aggregated less than $0.1 million and $0.3 million for the three and nine months ended June 30, 2014, respectively, and $0.2 million and $0.8 million for the three and nine months ended June 30, 2013, respectively. The discrete tax items in the fiscal 2013 nine-month period includes a one-time capital gain carryback benefit and retroactive federal R&D tax credits that aggregated $0.4 million. The nine months ended June 30, 2014 reflects the impact of gains related to two Vessix contingent consideration payments totaling $0.7 million and gains related to certain debt securities in our available-for-sale investment portfolio of $0.1 million. The nine months ended June 30, 2013 reflects the impact of gains on the sale of Vessix, OctoPlus N.V of $1.3 million and certain debt securities in our available-for-sale investment portfolio of $0.2 million. Each of these gains has had a tax expense recognized which has been offset by the reversal of capital loss valuation allowances.

The Company recorded an income tax benefit from discontinued operations of less than $0.1 million in each of the three and nine months ended June 30, 2014 which resulted in an effective tax rate associated with discontinued operations of 34.8% in each period. The Company recorded an income tax expense from discontinued operations of $0.2 million and $0.5 million for the three and nine months ended June 30, 2013, respectively, with a resulting effective tax rate for discontinued operations of 134.6% and 44.8% for the three and nine months ended June 30, 2013, respectively.

The total amount of unrecognized tax benefits including interest and penalties that, if recognized, would affect the effective tax rate as of June 30, 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 and the examination has not been completed as of June 30, 2014. 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.