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INCOME TAXES | 12 Months Ended
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Sep. 30, 2014
INCOME TAXES [Abstract] |
INCOME TAXES |
13. | INCOME TAXES:
The provision for income taxes consisted of the following:
|  | 2014 |  |  | 2013 |  |  | 2012 |
Current: |  |  |  |  |  |  |  |  |
Federal |  | $ | 7,371 |  |  | $ | 15,703 |  |  | $ | 14,060 |
State |  |  | 3,612 |  |  |  | 3,423 |  |  |  | 2,483 |
Foreign |  |  | 10,427 |  |  |  | 4,804 |  |  |  | 6,437 |
|  |  | 21,410 |  |  |  | 23,930 |  |  |  | 22,980 |
Deferred |  |  | 1,395 |  |  |  | 2,244 |  |  |  | 5,375 |
Total |  | $ | 22,805 |  |  | $ | 26,174 |  |  | $ | 28,355 |
The reconciliation of the federal statutory tax rate to the consolidated effective tax rate was as follows:
|  | 2014 |  |  | 2013 |  |  | 2012 |
Federal statutory tax rate |  |  | 35.0 | % |  |  | 35.0 | % |  |  | 35.0 | %
Effect of state income taxes, net of federal deduction |  |  | 3.8 |  |  |  | 2.7 |  |  |  | 2.1 |
Foreign taxes less than federal statutory rate |  |  | (2.1 | ) |  |  | (3.1 | ) |  |  | (0.6 | )
Other |  |  | (2.2 | ) |  |  | (2.0 | ) |  |  | (2.3 | )
Effective tax rate |  |  | 34.5 | % |  |  | 32.6 | % |  |  | 34.2 | %
The Company's foreign subsidiaries had income before income taxes for the years ended September 30, 2014, 2013 and 2012 of approximately $23,835, $23,662 and $24,654, respectively. At September 30, 2014, undistributed earnings of foreign subsidiaries for which deferred U.S. income taxes have not been provided approximated $259,354. The Company has not determined the deferred tax liability associated with these undistributed earnings, as such determination is not practicable. The components of deferred tax assets and liabilities at September 30, 2014 and 2013 are as follows:
|  | 2014 |  |  | 2013 |
Deferred tax assets: |  |  |  |  |  |
Pension and postretirement benefits |  | $ | 34,309 |  |  | $ | 26,780 |
Accruals and reserves not currently deductible |  |  | 28,090 |  |  |  | 20,939 |
Income tax credit carryforward |  |  | 9,839 |  |  |  | - |
Operating and capital loss carryforwards |  |  | 25,419 |  |  |  | 3,733 |
Stock options |  |  | 8,366 |  |  |  | 10,691 |
Other |  |  | 21,089 |  |  |  | 8,034 |
Total deferred tax assets |  |  | 127,112 |  |  |  | 70,177 |
Valuation allowances |  |  | (24,540 | ) |  |  | (2,234 | )
Net deferred tax assets |  |  | 102,572 |  |  |  | 67,943 |
Deferred tax liabilities: |  |  |  |  |  |  |  |
Depreciation |  |  | (7,651 | ) |  |  | (3,693 | )
Goodwill and intangible assets |  |  | (183,685 | ) |  |  | (67,012 | )
Other |  |  | (18,590 | ) |  |  | (1,630 | )
|  |  | (209,926 | ) |  |  | (72,335 | )
Net deferred tax liability |  | $ | (107,354 | ) |  | $ | (4,392 | )
At September 30, 2014, the Company had U.S. state net operating loss carryforwards of $70,130, foreign net operating loss carryforwards of $66,688, foreign capital loss carryforwards of $25,862, and various U.S. and non-U.S. income tax credit carryforwards of $5,260 and $4,579, respectively, which will be available to offset future income tax liabilities. If not used, state net operating losses will begin to expire in 2017. Foreign net operating losses have no expiration period. Certain of these carryforwards are subject to limitations on use due to tax rules affecting acquired tax attributes, loss sharing between group members, and business continuation. Therefore, the Company has established tax-effected valuation allowances against these tax benefits in the amount of $24,540 at September 30, 2014. U.S. tax attributes acquired in the Schawk transaction totaled $6,346. At September 30, 2014, the Company had total foreign tax credit carryforwards of $3,120, offset by a valuation allowance of $689. The Company has the ability to claim a deduction for these credits prior to expiration, and the net carrying value of the credits of $2,431 assumes that a deduction will be claimed instead of a tax credit. If unutilized, these U.S. foreign tax credits will begin to expire in 2016. Changes in the total amount of gross unrecognized tax benefits (excluding penalties and interest) are as follows:
|  | 2014 |  |  | 2013 |  |  | 2012 |
Balance, beginning of year |  | $ | 4,516 |  |  | $ | 4,501 |  |  | $ | 4,721 |
Increase from acquisition |  |  | 385 |  |  |  | - |  |  |  | - |
Increases for tax positions of prior years |  |  | 369 |  |  |  | - |  |  |  | 742 |
Decreases for tax positions of prior years |  |  | (863 | ) |  |  | (124 | ) |  |  | (74 | )
Increases based on tax positions related to the current year |  |  | 623 |  |  |  | 708 |  |  |  | 137 |
Decreases due to settlements with taxing authorities |  |  | (12 | ) |  |  | (250 | ) |  |  | (602 | )
Decreases due to lapse of statute of limitation |  |  | (707 | ) |  |  | (319 | ) |  |  | (423 | )
Balance, end of year |  | $ | 4,311 |  |  | $ | 4,516 |  |  | $ | 4,501 |
The Company had unrecognized tax benefits of $4,311 and $4,516 at September 30, 2014 and 2013, respectively, all of which, if recorded, would impact the annual effective tax rate. It is reasonably possible that the amount of unrecognized tax benefits could change by approximately $801 in the next 12 months primarily due to expiration of statutes related to specific tax positions. The Company classifies interest and penalties on tax uncertainties as a component of the provision for income taxes. Total penalties and interest accrued were $2,135 and $2,401 at September 30, 2014 and 2013, respectively. These accruals may potentially be applicable in the event of an unfavorable outcome of uncertain tax positions. The Company is currently under examination in several tax jurisdictions and remains subject to examination until the statute of limitation expires for those tax jurisdictions. As of September 30, 2014, the tax years that remain subject to examination by major jurisdiction generally are:
United States - Federal | 2011 and forward
United States - State | 2010 and forward
Canada | 2009 and forward
Europe | 2008 and forward
United Kingdom | 2012 and forward
Australia | 2010 and forward
Asia | 2008 and forward

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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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