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Income Taxes
3 Months Ended
Feb. 28, 2013
Income Tax Disclosure [Abstract]  
Income Taxes
Income Taxes
The Company recorded income tax expense of $0.6 million and $3.5 million for the first quarters of 2013 and 2012, respectively.
The Company’s first quarter 2013 effective tax rate of 75.0% was higher than its domestic federal statutory rate primarily due to losses in foreign jurisdictions in which no tax benefit can be recognized, as well as the relatively low pre-tax income in the first quarter of 2013.
At both February 28, 2013 and November 30, 2012, the total unrecognized tax benefits excluding interest and penalties were $4.3 million. The total amount of penalties and interest recognized in the statement of financial position were $1.1 million as of both February 28, 2013 and November 30, 2012.
Interest and penalties related to unrecognized tax benefits are recorded as a component of income tax expense. During the three months ended February 28, 2013, the Company recognized no interest and penalty expense.
During the next twelve months, due to the expiration of open statutes of limitations, the Company’s unrecognized tax benefits, excluding interest and penalties, are expected to decrease by $3.3 million. Of the $3.3 million unrecognized tax benefit that is reasonably expected to decrease during the next twelve months, $1.3 million would, if recognized, impact the Company’s effective rate. It is also possible that additional unrecognized tax benefits could arise during the next twelve months that would change such estimate.






Note N – Income Taxes (Continued)
As of February 28, 2013, the Company had approximately $116.8 million of domestic federal net operating loss carryforwards (NOLCs), $90.0 million of state and local NOLCs, $0.6 million foreign tax credit carryforwards and $0.2 million of AMT credit carryforwards. The majority of the federal, state and local NOLCs expire in the tax years 2022 through 2032 while the foreign tax credit carryforwards expire between tax years 2013 and 2021. The Company has approximately $19.6 million of domestic capital loss carryforwards, which are expected to expire by the tax year 2017. The Company has provided a valuation allowance against the capital loss carryforwards as the Company does not expect to utilize the carryforwards before the expiration period.
With limited exceptions, the Company is no longer open to audit by the Internal Revenue Service and various states and foreign taxing jurisdictions for years prior to 2007.