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Income Taxes | 12 Months Ended
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Jun. 30, 2016
Income Tax Disclosure [Abstract] |
Income Taxes |
10. | INCOME TAXES
Income tax expense consists of the following:
|  | Year ended June 30, |
|  | 2016 |  |  | 2015 |  |  | 2014 |
Current: |  |  |  |  |  |  |  |  |  |  |  |
Federal |  | $ | 22.2 |  |  | $ | 53.7 |  |  | $ | 97.4 |
State |  |  | 3.5 |  |  |  | 4.7 |  |  |  | 3.5 |
Total Current |  |  | 25.7 |  |  |  | 58.4 |  |  |  | 100.9 |
Deferred: |  |  |  |  |  |  |  |  |  |  |  |
Federal |  |  | 15.4 |  |  |  | (2.1 | ) |  |  | (0.7 | )
State |  |  | (3.2 | ) |  |  | 8.7 |  |  |  | 0.8 |
Foreign |  |  | 3.5 |  |  |  | (2.3 | ) |  |  | (2.9 | )
Change in valuation allowance |  |  | 2.2 |  |  |  | (8.0 | ) |  |  | 3.5 |
Total Deferred |  |  | 17.9 |  |  |  | (3.7 | ) |  |  | 0.7 |
Total income tax expense |  | $ | 43.6 |  |  | $ | 54.7 |  |  | $ | 101.6 |
Income (loss) before income taxes consists of the following:
|  | Year ended June 30, |
|  | 2016 |  |  | 2015 |  |  | 2014 |
United States |  | $ | 169.5 |  |  | $ | 147.0 |  |  | $ | 292.0 |
Foreign |  |  | (0.6 | ) |  |  | (12.1 | ) |  |  | (14.2 | )
Total |  | $ | 168.9 |  |  | $ | 134.9 |  |  | $ | 277.8 |
The differences between income taxes at the statutory federal income tax rate and income taxes reported in the consolidated statements of operations were as follows:
|  | Year ended June 30, |
|  | 2016 |  |  | 2015 |  |  | 2014 |
Federal income tax expense at the statutory rate |  |  | 35.0 | % |  |  | 35.0 | % |  |  | 35.0 | %
State income taxes, net of federal benefit |  |  | 2.0 |  |  |  | 1.7 |  |  |  | 1.6 |
Research and development credits, net of the federal tax on state credits |  |  | (1.3 | ) |  |  | (2.5 | ) |  |  | (0.2 | )
Uncertain tax positions, net of federal benefit |  |  | 0.6 |  |  |  | 1.2 |  |  |  | (0.1 | )
Uncertain tax benefits statute expired, net of federal benefit |  |  | (4.4 | ) |  |  | 0.0 |  |  |  | 0.0 |
Incentive stock option and employee stock purchase plan expense |  |  | (0.3 | ) |  |  | 0.2 |  |  |  | (0.3 | )
Adjustment to deferred tax liability attributable to acquired intangible assets |  |  | 0.0 |  |  |  | 1.6 |  |  |  | 0.0 |
Foreign rate differential |  |  | 0.0 |  |  |  | 1.6 |  |  |  | 0.8 |
Change in valuation allowance |  |  | 1.2 |  |  |  | 2.6 |  |  |  | 1.2 |
Basis difference, disposition of foreign subsidiary |  |  | 0.0 |  |  |  | 0.0 |  |  |  | (1.9 | )
California basis step-up election, net of related valuation allowance impact |  |  | 0.0 |  |  |  | (1.2 | ) |  |  | 0.0 |
Early adoption of ASU 2016-09 |  |  | (7.5 | ) |  |  | 0.0 |  |  |  | 0.0 |
Other, net |  |  | 0.5 |  |  |  | 0.4 |  |  |  | 0.5 |
|  |  | 25.8 | % |  |  | 40.6 | % |  |  | 36.6 |
The Company’s effective tax rate for the year ended June 30, 2016 was lower than the years ended June 30, 2015 and 2013. This decrease was primarily due the early adoption of ASU 2016-09 regarding stock compensation and a decrease in the Company’s liability for unrecognized tax benefits mainly due to a lapse of statute of limitations. Pursuant to the guidelines of the recently issued ASU 2015-17 (“the Update”), all deferred tax assets and liabilities are to be classified as non-current. The effective date of the Update for public companies is for annual periods beginning after December 15, 2016 and later dates for all other entities. Early adoption is permitted. To comply with the guidance, the Company elected to adopt this Update for the quarter ended December 31, 2015 and the annual period ending June 30, 2016. The guidance indicates that the Update may be applied either prospectively or retrospectively. The Company chose to apply the Update prospectively. Accordingly, no prior periods were adjusted. Upon adoption during the quarter ended December 31, 2015, approximately $13.5 of net current deferred tax assets were reclassified to non-current and netted against non-current deferred tax liabilities. At June 30, 2016, approximately $12.7 of what were formerly recorded as current deferred tax assets were reclassified to non-current and netted against non-current deferred tax liabilities. The FASB issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting, on March 30, 2016, in an effort to simplify the accounting for income taxes surrounding excess tax benefits. The Company elected early adoption in the fourth quarter of the current fiscal year. The guidance indicates that the provision is to be adopted prospectively and that any adjustment for the period ending June 30, 2016 must be reflected as of the beginning of the fiscal year. These adjustments have been reflected as required in both the effective tax rate table above, and the deferred tax asset and liabilities table below. The Company has made an entity-wide accounting policy election to continue to estimate the number of awards that are expected to vest and adjusting the estimate when it is likely to change. The significant components of the Company’s deferred tax assets and liabilities were comprised of the following at June 30, 2016 and 2015:
|  | Year ended June 30, |
|  | 2016 |  |  | 2015 |
Deferred tax assets: |  |  |  |  |  |  |  |
Net operating loss carryforwards |  | $ | 54.4 |  |  | $ | 61.1 |
Property, plant and equipment |  |  | 1.8 |  |  |  | 2.9 |
Accrued vacation |  |  | 2.0 |  |  |  | 1.7 |
Allowance for doubtful accounts |  |  | 2.4 |  |  |  | 2.7 |
Stock compensation expense |  |  | 27.0 |  |  |  | 36.8 |
Research and development credits |  |  | 9.4 |  |  |  | 8.9 |
Uncertain state tax positions |  |  | 1.1 |  |  |  | 1.1 |
Other, net |  |  | 0.7 |  |  |  | 0.9 |
Total gross deferred tax assets |  |  | 98.8 |  |  |  | 116.1 |
Less valuation allowance |  |  | (35.6 | ) |  |  | (33.4 | )
Total deferred tax assets |  |  | 63.2 |  |  |  | 82.7 |
Deferred tax liabilities: |  |  |  |  |  |  |  |
Intangible assets |  |  | 81.1 |  |  |  | 69.4 |
Total deferred tax liabilities |  |  | 81.1 |  |  |  | 69.4 |
Net deferred tax assets (liability) |  |  | (17.9 | ) |  |  | 13.3 |
Current net deferred tax asset |  |  | 0.0 |  |  |  | 13.5 |
Long term net deferred tax asset (liability) |  |  | (17.9 | ) |  |  | (0.2 | )
Net deferred tax asset (liability) |  | $ | (17.9 | ) |  | $ | 13.3 |
Due to sustained positive operating performance and the availability of expected future taxable income, the Company concluded that it is more likely than not that the benefits of the majority of its deferred income tax assets will be realized. However, for certain deferred tax assets, a valuation allowance has been established. For the years ended June 30, 2016 and 2015, the Company’s valuation allowance increased by $2.2 and decreased by $8.0, respectively. The net increase of the valuation allowance in the year ended June 30, 2016 consisted of an increase of $3.8 related to the early adoption of ASU 2016-09 with regard to state excess tax benefits, an increase of $1.9 related to additional state research credit carry-forwards, for which the company concluded it was more likely than not that the benefits of the losses and credits will not be realized. In addition, there was an offsetting decrease in the valuation allowance on foreign net operating losses in the amount of $3.5 which related to a corresponding decrease in the foreign net operating losses. The net decrease of the valuation allowance in the year ended June 30, 2015 consisted of a decrease of $11.5 related to the use of California net operating losses and credits made available through a post-acquisition California stand-alone state tax election and an offsetting increase in the amount of $3.5 which was related to foreign net operating losses and state tax research credits, for which the company concluded it was more likely than not that the benefits of the losses and credits will not be realized. The Company acquired Sividon Diagnostics GmbH on May 31, 2016 (see Note 2). As part of the purchase accounting for this acquisition a net deferred tax liability of approximately $13.2 was recorded, consisting primarily of intangible assets for which the book basis exceeds the tax basis. For the years ended June 30, 2016 and 2015, the Company realized $12.7 and $3.4, respectively, of excess tax benefits from stock-based compensation as a reduction of taxes payable. Company previously had adopted the with-and-without tax allocation approach for excess tax benefits, which results in the windfall tax benefits being utilized last after considering all other tax attributes available to the Company. Prior to the adoption of ASU 2016-09, excess tax benefits from stock based compensation were credited directly to additional paid-in-capital. The With the early adoption of ASU 2016-09, all excess tax benefits and tax deficiencies are recognized as income tax expense or benefit in the income statement. At June 30, 2016, the Company had the following net operating loss and research credit carryforwards, with their respective expiration periods. Certain carryforwards are subject to the limitations of Section 382 and 383 of the Internal Revenue Code as indicated.
Carryforwards |  | Amount |  |  | Subject to sections 382, 383 |  | Expires beginning in year |  | Through
Federal net operating loss |  | $ | 112.3 |  |  | Yes |  | 2027 |  | 2033
Utah net operating loss |  |  | 209.5 |  |  | No |  | 2016 |  | 2024
Oklahoma net operating loss |  |  | 14.1 |  |  | Yes |  | 2023 |  | 2033
Foreign net operating losses (various jurisdictions) |  |  | 30.1 |  |  | No |  | Various |  | Various
Federal research credit |  |  | 3.2 |  |  | Yes |  | 2025 |  | 2032
Utah research credit |  |  | 9.5 |  |  | No |  | 2021 |  | 2029
Due to a post-acquisition California stand-alone state election related to the acquisition of Crescendo Bioscience, Inc., all of Crescendo’s California net operating loss carryforwards and California research credit carryforwards were utilized or lost at the acquisition, resulting in no remaining carryforwards. All of the Utah net operating loss carryforwards are ‘excess tax benefits’ as defined by ASC guidance and, if realized in future years, will be recognized as a credit to tax benefit, pursuant to the guidance of ASU 2016-09 which was adopted during this fiscal year. The Company’s deferred tax asset for the Utah net operating loss ‘excess tax benefits’ is approximately $6.8 and is offset by a full valuation allowance at June 30, 2016. Consistent with the indefinite reversal criteria of ASC 740-30-25-17, the Company intends to invest undistributed earnings of its foreign subsidiaries indefinitely. Due to the cumulative losses that have been incurred to date in its foreign operations, the amount of unrecorded deferred liability resulting from the indefinite reversal criteria at June 30, 2016 is $0. In July 2006, the FASB issued ASC Topic 740 Subtopic 10 Section 05, which clarifies the accounting for uncertainty in tax positions. Accounting guidance requires that the impact of a tax position be recognized in the financial statements if that position is more likely than not of being sustained on audit, based on the technical merits of the position. The Company adopted the guidance on July 1, 2007 and recorded $0 cumulative effect. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
|  | Year ended June 30, |
|  | 2016 |  |  | 2015 |  |  | 2014 |
Unrecognized tax benefits at the beginning of year |  | $ | 26.3 |  |  | $ | 24.2 |  |  | $ | 10.9 |
Gross increases—current year tax positions |  |  | 0.6 |  |  |  | 1.1 |  |  |  | 1.8 |
Gross increases—prior year tax positions |  |  | 5.4 |  |  |  | 1.0 |  |  |  | 0.3 |
Gross increases—acquisitions |  |  | — |  |  |  | — |  |  |  | 14.2 |
Gross decreases—prior year tax positions |  |  | (8.1 | ) |  |  | — |  |  |  | (3.0 | )
Unrecognized tax benefits at end of year |  | $ | 24.2 |  |  | $ | 26.3 |  |  | $ | 24.2 |
Interest and penalties in year-end balance |  | $ | 0.5 |  |  | $ | 0.6 |  |  | $ | 0.3 |
Interest and penalties related to uncertain tax positions are included as a component of income tax expense. The Company files U.S., foreign and state income tax returns in jurisdictions with various statutes of limitations. The years ended June 30, 2013 through June 30, 2016 remain subject to examination at June 30, 2016. The Company’s income tax returns for the following jurisdictions are currently under examination: New Jersey State income tax returns for the years ended June 30, 2007 through 2013; New York State income tax return for the years ended June 30, 2014 through 2015; and U.S. income tax return for the year June 30, 2014. Annual tax provisions include amounts considered necessary to pay assessments that may result from examination of prior year tax returns; however, the amount ultimately paid upon resolution of issues may differ materially from the amount accrued. The Company’s foreign income tax returns and all other state tax returns are not currently under examination.

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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=65882285&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=65882285&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=65882285&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=65882285&loc=d3e32537-109319 + Details
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