Income taxes (Tables)

12 Months Ended

Jul. 31, 2016

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, 2016, 2015 and 2014:

	For the Year ended July 31,
(in millions except percentages)	2016			2015			2014
Provision for (benefit from) income taxes	$	8.2		$	7.6		$	(5.4	)
Effective tax rate		40	%		18	%		-19	%

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:

	For the Year ended July 31,
(in %)	2016			2015			2014
U.S. Federal statutory tax rate (%)		35			35			35
State income taxes, net of federal tax benefit		(2	)		(1	)		(3	)
Domestic production benefit		—			1			(2	)
General business credit (U.S. R&D)		(5	)		(2	)		(3	)
Valuation allowance		2			—			—
Change in classification of Canadian entity		—			—			(40	)
Effect of international operations		(3	)		(11	)		(9	)
Increase (decrease) in tax reserves		8			(6	)		(2	)
Non-deductible royalty		2			—			—
Other items, net		3			2			5
Effective tax rate (%)		40			18			(19	)

Components of Provision (Benefit from) for Income Taxes

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

	For the Year ended July 31,
(in millions)	2016			2015			2014
Current income taxes provision (benefit):
U.S.:
Federal	$	2.5		$	(2.8	)	$	(5.2	)
State		(0.2	)		—			0.3
Non-U.S.		6.4			6.0			4.9
Current income tax provision	$	8.7		$	3.2		$	—
Deferred income taxes (benefit) provision:
U.S.:
Federal	$	(2.9	)	$	1.9		$	(2.9	)
State		(0.1	)		0.2			(0.4	)
Non-U.S.		2.5			2.3			(2.1	)
Deferred income taxes (benefit) provision	$	(0.5	)	$	4.4		$	(5.4	)
Provision (benefit from) for income taxes	$	8.2		$	7.6		$	(5.4	)

Income Before Income Taxes

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

	For the Year ended July 31,
(in millions)	2016		2015		2014
Domestic	$	7.9	$	7.5	$	0.9
Foreign		12.4		33.5		28.1
Income before income taxes	$	20.3	$	41.0	$	29.0

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, 2016			As of July 31, 2015
(in millions)
Assets
Compensation	$	10.0		$	8.4
Accruals and reserves		5.5			5.7
Comprehensive income		2.0			1.4
Net operating losses and credit carryforwards		17.0			19.6
Other		0.9			0.6
Deferred tax assets	$	35.4		$	35.7
Valuation allowance		(11.4	)		(10.6	)
Total deferred tax assets	$	24.0		$	25.1
Liabilities
Depreciation related	$	(8.0	)	$	(8.7	)
Goodwill and intangibles		(5.3	)		(6.5	)
Total deferred tax liabilities	$	(13.3	)	$	(15.2	)
Net deferred tax assets	$	10.7		$	9.9

Summary of Changes in Unrecognized Income Tax Benefits

The following table summarizes the changes in our unrecognized income tax benefits for fiscal years 2016 and 2015:

	July 31,
(in millions)	2016			2015
Beginning balance	$	6.0		$	8.1
Increases based on tax positions related to current year		1.8			0.7
Increases for tax positions of prior years		0.2			0.1
Decreases for tax positions of prior years		—			(0.3	)
Decreases due to settlements with taxing authorities		—			—
Decreases due to lapse of applicable statute of limitations		(0.4	)		(2.6	)
Adjustments due to foreign exchange rate		—			—
Ending balance	$	7.6		$	6.0
Net interest as of end of fiscal year	$	0.4		$	0.3

Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes

“Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes.” The effects of the accounting change on the July 31, 2015 Consolidated Balance Sheets were as follows:

(in thousands)	July 31, 2015
	Revised		Previously Reported
Current deferred tax asset	$	—	$	7,987
Non-current deferred tax asset		9,904		5,308
Non-current deferred tax liability		—		(3,391	)
Net deferred tax assets	$	9,904	$	9,904