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Income Taxes | 12 Months Ended
--- | ---
Sep. 30, 2012
Income Tax Disclosure [Abstract] |
Income Taxes | INCOME TAXES The following table shows the significant components of the income tax provision:
| Fiscal Year Ended September 30,
| 2012 |  | 2011 |  | 2010
| (in thousands)
Current |  |  |  |  |
Federal | $ | 60,420 |  |  | $ | 50,148 |  |  | $ | 54,931 |
State and foreign | 8,802 |  |  | 2,728 |  |  | 2,172 |
| 69,222 |  |  | 52,876 |  |  | 57,103 |
Deferred |  |  |  |  |
Federal | 3,337 |  |  | 13,408 |  |  | (2,811 | )
State and foreign | (1,536 | ) |  | 268 |  |  | (56 | )
| 1,801 |  |  | 13,676 |  |  | (2,867 | )
| $ | 71,023 |  |  | $ | 66,552 |  |  | $ | 54,236 |
The following table shows a reconciliation of income taxes calculated at the statutory rate and the provision for income taxes attributable to continuing operations:
| Fiscal Year Ended September 30,
| 2012 |  | 2011 |  | 2010
| (in thousands)
Income taxes at the federal statutory rate | $ | 77,560 |  |  | $ | 66,049 |  |  | $ | 53,035 |
Non-deductible expense related to incentive stock options | (633 | ) |  | — |  |  | 1 |
State income tax, net of federal benefit | 349 |  |  | 2,728 |  |  | 2,172 |
Change in valuation allowance | 2,242 |  |  | 1,425 |  |  | 1,273 |
Federal tax credits | (922 | ) |  | (167 | ) |  | (134 | )
Foreign tax credit | (4,342 | ) |  | (4,356 | ) |  | (2,849 | )
Effect of permanently reinvesting foreign earnings | (3,820 | ) |  | — |  |  | — |
Other | 589 |  |  | 873 |  |  | 738 |
Total provision | $ | 71,023 |  |  | $ | 66,552 |  |  | $ | 54,236 |
Effective tax rate | 32.1 | % |  | 35.3 | % |  | 35.8 | %
The Company's effective tax rates were approximately 32%, 35% and 36% for the fiscal years ended September 30, 2012, 2011 and 2010, respectively. The decrease in the fiscal 2012 effective tax rate is due primarily to certain undistributed foreign earnings for which no U.S. taxes are provided because such earnings are intended to be permanently reinvested outside the U.S. The following table shows significant components of our deferred tax assets and liabilities as of September 30:
| September 30,
| 2012 |  | 2011
| (in thousands)
Deferred tax assets: |  |  |
Book over tax depreciation | $ | — |  |  | $ | 1,001 |
Tax over book inventory | 3,904 |  |  | 3,457 |
Accrued liabilities | 14,334 |  |  | 12,220 |
Pawn service charges receivable | 3,937 |  |  | 3,775 |
Stock compensation | 974 |  |  | — |
State and foreign net operating loss carry-forwards | 3,845 |  |  | 1,425 |
Total deferred tax assets | 26,994 |  |  | 21,878 |
Deferred tax liabilities: |  |  |
Tax over book amortization | 10,833 |  |  | 6,605 |
Foreign income and dividends | 3,864 |  |  | 2,932 |
Tax over book depreciation | 1,912 |  |  | — |
Stock compensation | — |  |  | 194 |
Prepaid expenses | 1,082 |  |  | 928 |
Total deferred tax liabilities | 17,691 |  |  | 10,659 |
Net deferred tax asset | 9,303 |  |  | 11,219 |
Valuation allowance | (2,242 | ) |  | (1,425 | )
Net deferred tax asset | $ | 7,061 |  |  | $ | 9,794 |
Deferred taxes are not provided for temporary differences of approximately $16.8 million representing earnings of non-U.S. subsidiaries intended to be permanently reinvested outside the U.S. We estimate that, upon distribution of our share of these earnings, we would be subject to U.S. income taxes of approximately $0.8 million as of September 30, 2012. At September 30, 2012 and 2011, we provided deferred income taxes on all undistributed earnings from Albemarle & Bond, and received dividends of approximately $3.3 million and $3.2 million, respectively. At September 30, 2012 and 2011, we provided deferred income taxes on all undistributed earnings from Cash Converters, and recorded dividends of approximately $4.4 million and $4.1 million, respectively. Any taxes paid to foreign governments on these earnings may be used in whole or in part as credits against the U.S. tax on any dividends distributed from such earnings. Under FASB ASC 740-10-25 (“Accounting for Uncertainty in Income Taxes”), a tax position must be more-likely-than-not to be sustained upon examination, based on the technical merits of the position to be recognized in the financial statements. In making the determination of sustainability, we must presume the appropriate taxing authority with full knowledge of all relevant information will examine tax positions. FASB ASC 740-10-25 also prescribes how the benefit should be measured, including the consideration of any penalties and interest. It requires that the standard be applied to the balances of tax assets and liabilities as of the beginning of the period of adoption and that a corresponding adjustment be made to the opening balance of equity. We recognize interest and penalties related to unrecognized tax benefits as federal income tax expense on our statement of operations. We are subject to U.S., Mexico, and Canada income taxes as well as to income taxes levied by various state and local jurisdictions. With few exceptions, we are no longer subject to examinations by tax authorities for years before the tax year ended September 30, 2008. The Internal Revenue Service has completed its field audit of the Company's federal income tax return for the fiscal year ended September 30, 2010 and proposed certain adjustments. Management believes that adequate provisions have been made for any adjustments that may result from tax examinations.

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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 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32537-109319 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 109 -Paragraph 136, 172 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 109 -Paragraph 43, 44, 45, 46, 47, 48, 49 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 08 -Paragraph h -Article 4 Reference 5: 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 6: 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 7: 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 8: 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=6881521&loc=d3e23780-122690 + Details
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