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Income Taxes | 12 Months Ended
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Sep. 30, 2012
Income Taxes [Abstract] |
Income Taxes |
8. | Income Taxes
The Company accounts for income taxes under the asset and liability method prescribed in accounting guidance. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. A valuation allowance is provided when it is more likely than not that some portion or all of a deferred tax asset will not be realized. The ultimate realization of deferred tax assets depends on the generation of future taxable income during the period in which related temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in this assessment. Deferred tax assets and liabilities are measured using the enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date of such change. Income taxes from continuing operations in the accompanying consolidated statements of operations for the fiscal years ended September 30 are as follows (in thousands):
|  | 2012 |  |  | 2011 |  |  | 2010 |
Current provision: |  |  |  |  |  |  |  |  |  |  |  |
Federal |  | $ | 6,615 |  |  | $ | 6,011 |  |  | $ | 6,708 |
State and foreign |  |  | 290 |  |  |  | 765 |  |  |  | 408 |
Total current provision |  |  | 6,905 |  |  |  | 6,776 |  |  |  | 7,116 |
Deferred (benefit) provision : |  |  |  |  |  |  |  |  |  |  |  |
Federal |  |  | (835 | ) |  |  | (652 | ) |  |  | (1,883 | )
State |  |  | 107 |  |  |  | (520 | ) |  |  | (254 | )
Total deferred (benefit) provision |  |  | (728 | ) |  |  | (1,172 | ) |  |  | (2,137 | )
Total provision |  | $ | 6,177 |  |  | $ | 5,604 |  |  | $ | 4,979 |
The reconciliation of the difference between amounts calculated at the statutory federal tax rate of 35% for the fiscal years ended September 30 and the Company’s effective tax rate from continuing operations is as follows (in thousands):
|  | 2012 |  |  | 2011 |  |  | 2010 |
Amount at statutory federal income tax rate |  | $ | 5,707 |  |  | $ | 5,785 |  |  | $ | 1,884 |
Change because of the following items: |  |  |  |  |  |  |  |  |  |  |  |
State taxes |  |  | 236 |  |  |  | 412 |  |  |  | 121 |
Stock-based compensation |  |  | 36 |  |  |  | (7 | ) |  |  | 255 |
Valuation allowance |  |  | 303 |  |  |  | 21 |  |  |  | 2,780 |
Other |  |  | (105 | ) |  |  | (607 | ) |  |  | (61 | )
Income tax provision |  | $ | 6,177 |  |  | $ | 5,604 |  |  | $ | 4,979 |
The Company recorded an income tax expense from discontinued operations of $1.1 million for fiscal 2012 and an income tax benefit from discontinued operations of $13.8 million and $4.5 million for fiscal 2011 and 2010, respectively. The Company recorded an income tax benefit of $0.6 million from the sale of discontinued operations for fiscal 2012. The components of deferred income taxes consisted of the following as of September 30 and result from differences in the recognition of transactions for income tax and financial reporting purposes (in thousands):
|  | 2012 |  |  | 2011 |
Depreciable assets |  | $ | 1,146 |  |  | $ | 827 |
Deferred revenue |  |  | 85 |  |  |  | 101 |
Accruals and reserves |  |  | 362 |  |  |  | 566 |
Stock-based compensation |  |  | 3,883 |  |  |  | 6,927 |
Impaired investments |  |  | 6,455 |  |  |  | 6,151 |
Unrealized (gains) losses on investments |  |  | (131 | ) |  |  | 96 |
Other |  |  | 755 |  |  |  | 718 |
Valuation allowance |  |  | (6,530 | ) |  |  | (6,227 | )
Total deferred tax assets |  |  | 6,025 |  |  |  | 9,159 |
Less current deferred tax assets |  |  | (219 | ) |  |  | (327 | )
Noncurrent deferred tax assets |  | $ | 5,806 |  |  | $ | 8,832 |
In fiscal 2012 and 2011, the Company recorded valuation allowances of $0.3 million and less than $0.1 million, respectively, related to deferred tax assets. The fiscal 2012 and 2011 valuation allowances relate to deferred tax assets associated with potential capital losses created by the impairment of certain of the Company’s investments. Unrecognized tax benefits are the differences between a tax position taken, or expected to be taken in a tax return, and the benefit recognized for accounting purposes pursuant to accounting guidance. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands):
|  | 2012 |  |  | 2011 |  |  | 2010 |
Beginning of fiscal year |  | $ | 1,564 |  |  | $ | 1,948 |  |  | $ | 2,042 |
Increases in tax positions for prior years |  |  | 5 |  |  |  | 3 |  |  |  | — |
Decreases in tax positions for prior years |  |  | (3 | ) |  |  | (85 | ) |  |  | (104 | )
Increases in tax positions for current year |  |  | 72 |  |  |  | 55 |  |  |  | 92 |
Settlements with taxing authorities |  |  | — |  |  |  | (53 | ) |  |  | — |
Lapse of the statute of limitations |  |  | (203 | ) |  |  | (304 | ) |  |  | (82 | )
End of fiscal year |  | $ | 1,435 |  |  | $ | 1,564 |  |  | $ | 1,948 |
The total amount of unrecognized tax benefits including interest and penalties that, if recognized, would affect the effective tax rate as of September 30, 2012, 2011 and 2010, respectively, are $1.4 million, $1.6 million and $1.9 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 consolidated balance sheets in other long-term liabilities. Interest and penalties related to unrecognized tax benefits are recorded in income tax expense. As of September 30, 2012, 2011 and 2010, a gross balance of $0.8 million, $0.7 million and $0.7 million, respectively, has been accrued related to the unrecognized tax benefits balance for interest and penalties. 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. The Internal Revenue Service (“IRS”) commenced an examination of the Company’s U.S. income tax return for fiscal 2010 in the first quarter of fiscal 2012. The IRS completed its examination in the third quarter of fiscal 2012 and a payment was made in the fourth quarter of fiscal 2012 associated with a timing adjustment. The IRS completed an examination of the Company’s U.S. income tax return for fiscal 2009 and a payment was made in the third quarter of fiscal 2011 associated with timing adjustments. U.S. income tax returns for years prior to fiscal 2009 are no longer subject to examination by federal tax authorities. Tax returns for state and local jurisdictions for fiscal years 2003 through 2011 remain subject to examination by state and local tax authorities.

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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 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 2: 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 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 08 -Paragraph h -Article 4 Reference 4: 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 5: 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 6: 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 7: 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 8: 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 + Details
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