Income Taxes (Tables)

12 Months Ended

Sep. 30, 2015

Income Taxes

Schedule of income tax benefit (provision)

The income tax provision consisted of the following for the years ended September 30:

(in thousands)	2013			2014			2015
Current tax benefit (provision):
Federal	$	(1,292	)	$	65		$	8
State		(1,934	)		(1,973	)		(2,027	)
Total current tax provision		(3,226	)		(1,908	)		(2,019	)
Deferred tax benefit (provision):
Federal		(5,473	)		(10,956	)		(14,100	)
State		820			1,296			1,300
Change in valuation allowance		3,955			7,994			109,277
Total deferred tax benefit (provision)		(698	)		(1,666	)		96,477
Total income tax benefit (provision)	$	(3,924	)	$	(3,574	)	$	94,458

Schedule of benefit (provision) for income taxes computed using statutory federal income tax rate

(in thousands)	2013			2014			2015
Tax provision at U.S. statutory rate	$	(4,273	)	$	(7,016	)	$	(13,185	)
State income taxes, net of federal tax effect		(1,934	)		(1,973	)		(931	)
Valuation allowance		3,955			7,994			109,277
Non-deductible executive compensation		0			(1,242	)		(105	)
Unrecognized tax benefits		(1,245	)		101			706
Other		(427	)		(1,438	)		(1,304	)
Income tax benefit (provision)	$	(3,924	)	$	(3,574	)	$	94,458

Schedule of deferred income tax assets and liabilities

The components of Headwaters' deferred income tax assets and liabilities were as follows as of September 30:

(in thousands)	2014			2015
Deferred tax assets:
NOL and capital loss carryforwards	$	70,320		$	67,505
Tax credit carryforwards		24,784			24,954
Estimated liabilities		15,925			19,240
Stock-based compensation		6,958			5,903
Debt repurchase premium		12,711			5,154
Reserves and allowances		4,860			2,469
Deferred revenue		5,898			170
Other		1,644			3,006
Valuation allowances		(119,424	)		(10,146	)
Total deferred tax assets		23,676			118,255
Deferred tax liabilities:
Property, plant and equipment basis differences		(20,483	)		(15,797	)
Goodwill and intangible asset basis differences		(8,062	)		(9,606	)
Total deferred tax liabilities		(28,545	)		(25,403	)
Net deferred tax asset (liability)	$	(4,869	)	$	92,852

Schedule of reconciliation of change in the amount of gross unrecognized income tax benefits

(in thousands)	2013			2014			2015
Gross unrecognized income tax benefits at beginning of year	$	4,872		$	4,552		$	4,497
Changes based on tax positions related to the current year		0			0			25
Increases for tax positions related to prior years		1,214			0			1,055
Reductions for tax positions related to prior years		(1,439	)		0			0
Settlements		(16	)		0			0
Lapse of statute of limitations		(79	)		(55	)		(575	)
Gross unrecognized income tax benefits at end of year	$	4,552		$	4,497		$	5,002