Income taxes (Tables)

12 Months Ended

Jul. 31, 2014

Provision for Income Taxes and Effective Tax Rate

The following table presents the provision for income taxes and our effective tax rate for the fiscal years ended July 31, 2014 and 2013:

	Years Ended July 31,
(in millions)	2014			2013
(Benefit from) provision for income taxes	$	(5.4	)	$	13.0
Effective tax rate		-19	%		29	%

Reconciliation of Income Taxes at United States Rate to Effective Tax Rate

A reconciliation of income taxes at the U.S. statutory rate to the effective tax rate follows:

	Years Ended July 31,
	2014			2013			2012
U.S. Federal statutory tax rate		35	%		35	%		35	%
State income taxes, net of federal tax benefit		(3	)		(1	)		(1	)
Domestic production benefit		(2	)		(2	)		(2	)
General business credit (U.S. R&D)		(3	)		(4	)		(1	)
Valuation allowance		—			1			1
Change in classification of Canadian entity		(40	)		—			—
Effect of international operations		(9	)		(2	)		(3	)
(Decrease) increase in tax reserves		(2	)		1			(26	)
Other items, net		5			1			—
Effective tax rate		(19	%)		29	%		3	%

Components of the (Benefit from) Provision for Income Taxes

The components of the (benefit from) provision for income taxes are as follows:

	Years Ended July 31,
(in millions)	2014			2013			2012
Current income taxes provision (benefit):
U.S.:
Federal	$	(5.2	)	$	11.1		$	3.4
State		0.3			0.5			0.6
Non-U.S.		4.9			0.4			0.2
Current income tax provision	$	—		$	12.0		$	4.2
Deferred income taxes (benefit) provision:
U.S.:
Federal	$	(2.9	)	$	12.3		$	(3.4	)
State		(0.4	)		(0.1	)		—
Non-U.S.		(2.1	)		(11.2	)		0.3
Deferred income tax (benefit) provision		(5.4	)		1.0			(3.1	)
(Benefit from) provision for income taxes	$	(5.4	)	$	13.0		$	1.1

Income Before Income Taxes

Income before income taxes from domestic and foreign operations is as follows:

	Years Ended July 31,
(in millions)	2014		2013		2012
Domestic	$	0.9	$	24.9	$	30.2
Foreign		28.1		19.2		14.0
Income before income taxes	$	29.0	$	44.1	$	44.2

Components of Net Deferred Tax Assets

Net deferred taxes, detailed below, recognize the impact of temporary differences between the amounts of assets and liabilities recorded for financial statement purposes and such amounts measured in accordance with tax laws:

	As of July 31,
	2014			2013
(in millions)
Assets
Compensation	$	10.1		$	11.6
Accruals and reserves		4.9			5.1
Comprehensive income		1.4			—
Net operating losses and credit carryforwards		16.6			8.9
Other		3.4			3.3
Deferred tax assets	$	36.4		$	28.9
Valuation allowance		(6.6	)		(6.3	)
Total deferred tax assets	$	29.8		$	22.6
Liabilities
Depreciation related	$	(7.9	)	$	(5.8	)
Goodwill and intangibles		(7.8	)		(4.3	)
Comprehensive income		—			(0.2	)
Total deferred tax liabilities	$	(15.7	)	$	(10.3	)
Net deferred taxes	$	14.1		$	12.3

Summary of Changes in Unrecognized Income Tax Benefits

The following table summarizes the changes in our unrecognized income tax benefits for fiscal years 2014 and 2013:

	July 31,
(in millions)	2014			2013
Beginning balance	$	7.3		$	6.8
Increases based on tax positions related to current year		0.8			0.9
Increases for tax positions of prior years		0.4			0.2
Decreases for tax positions of prior years		(0.8	)		—
Decreases due to settlements with taxing authorities		(0.1	)		—
Decreases due to lapse of the applicable statute of limitations		(0.7	)		(0.6	)
Adjustment due to foreign exchange rate		—			—
Ending balance	$	6.9		$	7.3
Net interest as of end of fiscal year	$	0.6		$	0.7