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INCOME TAXES | 12 Months Ended
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Sep. 30, 2015
Income Tax Disclosure [Abstract] |
INCOME TAXES | INCOME TAXES Income taxes have been based on the following components of Income before taxes and discontinued operations:
| For the Years Ended September 30,
| 2015 |  | 2014 |  | 2013
Domestic | $ | 54,515 |  |  | $ | (14,682 | ) |  | $ | 16,083 |
Non-U.S. | (879 | ) |  | 8,966 |  |  | (1,750 | )
| $ | 53,636 |  |  | $ | (5,716 | ) |  | $ | 14,333 |
Provision (benefit) for income taxes on income from continuing operations was comprised of the following:
| For the Years Ended September 30,
| 2015 |  | 2014 |  | 2013
Current | $ | 17,215 |  |  | $ | (408 | ) |  | $ | 2,468 |
Deferred | 2,132 |  |  | (5,131 | ) |  | 5,075 |
Total | $ | 19,347 |  |  | $ | (5,539 | ) |  | $ | 7,543 |
U.S. Federal | $ | 16,937 |  |  | $ | (6,486 | ) |  | $ | 5,807 |
State and local | 3,215 |  |  | (291 | ) |  | 2,915 |
Non-U.S. | (805 | ) |  | 1,238 |  |  | (1,179 | )
Total provision | $ | 19,347 |  |  | $ | (5,539 | ) |  | $ | 7,543 |
Griffon’s Income tax provision (benefit) included benefits of ($517) in 2015, ($4,429) in 2014, and ($3,209) in 2013 reflecting the reversal of previously recorded tax liabilities primarily due to the resolution of various tax audits and the closing of certain statutes for prior years’ tax returns. Differences between the effective income tax rate applied to Income from continuing operations and U.S. Federal income statutory rate were as follows:
| For the Years Ended September 30,
| 2015 |  | 2014 |  | 2013
U.S. Federal income tax provision (benefit) rate | 35.0 | % |  | (35.0 | )% |  | 35.0 | %
State and local taxes, net of Federal benefit | 4.9 | % |  | 17.5 | % |  | 2.8 | %
Non-U.S. taxes | (4.0 | )% |  | (35.8 | )% |  | 5.3 | %
Change in tax contingency reserves | 0.3 | % |  | (36.0 | )% |  | (10.9 | )%
Repatriation of foreign earnings | 0.9 | % |  | 4.7 | % |  | (8.3 | )%
U.S. Valuation allowance | (1.1 | )% |  | 4.5 | % |  | 10.1 | %
Non-deductible/non-taxable items, net | (0.7 | )% |  | (3.4 | )% |  | 11.6 | %
Research credits | (0.5 | )% |  | (3.9 | )% |  | (7.4 | )%
Deferred tax impact of state rate change | — | % |  | (4.5 | )% |  | 15.0 | %
Other | 1.3 | % |  | (5.0 | )% |  | (0.6 | )%
Effective tax provision (benefit) rate | 36.1 | % |  | (96.9 | )% |  | 52.6 | %
The tax effect of temporary differences that give rise to future deferred tax assets and liabilities are as follows:
| At September 30,
| 2015 |  | 2014
Deferred tax assets: |  |  |  |  |
Bad debt reserves | $ | 2,083 |  |  | $ | 2,639 |
Inventory reserves | 7,482 |  |  | 7,578 |
Deferred compensation (equity compensation and defined benefit plans) | 38,169 |  |  | 35,683 |
Compensation benefits | 6,186 |  |  | 4,662 |
Insurance reserve | 3,079 |  |  | 3,336 |
Restructuring reserve | 122 |  |  | 911 |
Warranty reserve | 2,288 |  |  | 2,286 |
Net operating loss | 24,089 |  |  | 32,512 |
Tax credits | 6,704 |  |  | 6,378 |
Other reserves and accruals | 5,206 |  |  | 4,164 |
| 95,408 |  |  | 100,149 |
Valuation allowance | (10,462 | ) |  | (15,649 | )
Total deferred tax assets | 84,946 |  |  | 84,500 |
Deferred tax liabilities: |  |  |  |  |
Deferred income | (7,432 | ) |  | (11,091 | )
Goodwill and intangibles | (72,645 | ) |  | (72,086 | )
Property, plant and equipment | (35,382 | ) |  | (34,302 | )
Interest | (2,053 | ) |  | (3,582 | )
Other | (102 | ) |  | (927 | )
Total deferred tax liabilities | (117,614 | ) |  | (121,988 | )
Net deferred tax liabilities | $ | (32,668 | ) |  | $ | (37,488 | )
The decrease in the valuation allowance of $5,187 is primarily the result of operational improvements and other business strategies that increase profitability in a foreign jurisdiction. The components of the net deferred tax liability, by balance sheet account, were as follows:
| At September 30,
| 2015 |  | 2014
Prepaid and other current assets | $ | 14,827 |  |  | $ | 13,982 |
Other assets | 9,571 |  |  | 872 |
Current liabilities | (3,793 | ) |  | (2 | )
Other liabilities | (54,409 | ) |  | (53,798 | )
Assets of discontinued operations | 1,136 |  |  | 1,458 |
Net deferred liability | $ | (32,668 | ) |  | $ | (37,488 | )
At both September 30, 2015 and 2014, Griffon has not recorded deferred income taxes on the undistributed earnings of its non-U.S. subsidiaries because of management’s ability and intent to indefinitely reinvest such earnings outside the U.S. At September 30, 2015, Griffon’s share of the undistributed earnings of the non-U.S. subsidiaries amounted to approximately $64,534. It is not practicable to estimate the amount of deferred tax liability related to investments in these foreign subsidiaries. At September 30, 2015 and 2014, Griffon had loss carryforwards for non-U.S. tax purposes of $68,591 and $78,692, respectively. The non-U.S. loss carryforwards are available for carryforward indefinitely. At September 30, 2015 and 2014, Griffon had state and local loss carryforwards of $7,882 and $7,905, respectively, which expire in varying amounts through 2035. At September 30, 2015, Griffon had no federal loss carryforwards. At September 30, 2014, Griffon had federal loss carryforwards of $11,036 which were available for carryforward through 2034. At September 30, 2015 and 2014, Griffon had federal tax credit carryforwards of $6,223 and $6,087, respectively, which expire beginning in 2017. Griffon files U.S. Federal, state and local tax returns, as well as applicable returns in Germany, Canada, Brazil, Australia, Ireland and other non-U.S. jurisdictions. Griffon’s U.S. Federal income tax returns are no longer subject to income tax examination for years before 2011, the German income tax returns are no longer subject to income tax examination for years through 2010 and major U.S. state and other non-U.S. jurisdictions are no longer subject to income tax examinations for years before 2005. Various U.S. state and non-U.S. statutory tax audits are currently underway. The following is a roll forward of unrecognized tax benefits:
Balance at September 30, 2013 | $ | 10,520 |
Additions based on tax positions related to the current year | 848 |
Additions based on tax positions related to prior years | 531 |
Reductions based on tax positions related to prior years | (2,549 | )
Lapse of Statutes | (1,204 | )
Settlements | (240 | )
Balance at September 30, 2014 | 7,906 |
Additions based on tax positions related to the current year | 645 |
Reductions based on tax positions related to prior years | (252 | )
Lapse of Statutes | (448 | )
Balance at Balance at September 30, 2015 | $ | 7,851 |
If recognized, the amount of potential tax benefits that would impact Griffon’s effective tax rate is $4,579. Griffon recognizes potential accrued interest and penalties related to unrecognized tax benefits in income tax expense. At September 30, 2015 and 2014, the combined amount of accrued interest and penalties related to tax positions taken or to be taken on Griffon’s tax returns and recorded as part of the reserves for uncertain tax positions was $655 and $754, respectively. Griffon cannot reasonably estimate the extent to which existing liabilities for uncertain tax positions may increase or decrease within the next twelve months as a result of the progression of ongoing tax audits or other events. Griffon believes that it has adequately provided for all open tax years by tax jurisdiction.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32559-109319 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32639-109319 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32537-109319 + Details
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