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INCOME TAXES (Tables)

12 Months Ended

Sep. 30, 2011

Total income taxes are allocated as follows:

	Year ended September 30,
	2011		2010			2009
	(in thousands)
Recorded in:
Income including noncontrolling interests	$	182,894	$	133,625		$	96,024
Equity, for compensation expense for tax purposes in excess of (less than) amounts recognized for financial reporting purposes		374		(2,280	)		(3,210	)
Equity, for available for sale securities		1,497		17,020			(2,963	)
Total	$	184,765	$	148,365		$	89,851

Provision (Benefit) for Income Taxes

Our provision (benefit) for income taxes consists of the following:

	Year ended September 30,
	2011			2010			2009
	(in thousands)
Current:
Federal	$	148,266		$	140,482		$	125,557
State and local		29,387			15,592			13,264
Foreign		11,249			3,380			1,875
		188,902			159,454			140,696
Deferred:
Federal		(6,279	)		(23,190	)		(39,266	)
State and local		(3,887	)		(2,778	)		(4,538	)
Foreign		4,158			139			(868	)
		(6,008	)		(25,829	)		(44,672	)
Total provision for income taxes	$	182,894		$	133,625		$	96,024

Reconciliation Between Income Tax Expense and the Amount Computed by Applying the Statutory Federal Income Tax Rate

Our income tax expense differs from the amount computed by applying the statutory federal income tax rate of 35% due to the following:

	Year ended September 30,
	2011		2010			2009
	(in thousands)

Provision calculated at statutory rates	$	161,436	$	126,667		$	87,071
State income taxes, net of federal benefit		16,575		8,329			5,672
Other, net		4,883		(1,371	)		3,281
Total provision for income tax	$	182,894	$	133,625		$	96,024

U.S. and Foreign Components of Income Before Income Taxes

U.S. and foreign components of income excluding noncontrolling interests and before provision for income taxes are as follows:

	Year ended September 30,
	2011		2010		2009
	(in thousands)

U.S.	$	421,662	$	356,067	$	256,659
Foreign		39,585		5,841		(7,885	)
Income excluding noncontrolling interest and before provision for income taxes	$	461,247	$	361,908	$	248,774

Deferred Tax Asset (Liability) Items

The cumulative effects of temporary differences that give rise to significant portions of the deferred tax asset (liability) items are as follows:

	September 30,
	2011			2010
	(in thousands)
Deferred tax assets:
Deferred compensation	$	79,192		$	70,445
Allowances for loan losses and reserves for unfunded commitments		63,061			62,562
Interest on nonaccrual loans		366			228
Unrealized loss		26,381			30,460
Accrued expenses		16,018			15,100
Capitalized expenditures		344			3,747
Net operating loss and credit carryforwards		4,126			3,075
Other		23,919			16,087
Total gross deferred tax assets		213,407			201,704
Less: valuation allowance		(2,536	)		(3,075	)
Total deferred tax assets		210,871			198,629
Deferred tax liabilities:
Aircraft lease		(5,716	)		(6,793	)
Undistributed earnings of foreign subsidiaries		(16,517	)		(16,143	)
Other		(16,727	)		(10,485	)
Total deferred tax liabilities		(38,960	)		(33,421	)
Net deferred tax assets	$	171,911		$	165,208

Changes in Liability for Unrecognized Tax Benefits

The aggregate changes in the liability for unrecognized tax benefits including interest and penalties are as follows:

	Year ended September 30,
	2011			2010			2009
	(in thousands)

Liability for unrecognized tax benefits at beginning of fiscal year	$	4,308		$	4,565		$	4,862
Increases for tax positions related to the current year		1,199			1,108			779
Increases for tax positions related to prior years		551			353			219
Decreases for tax positions related to prior years		(44	)		(70	)		(114	)
Decreases due to lapsed statute of limitations		(1,284	)		(1,433	)		(1,037	)
Decreases related to settlements		-			(215	)		(144	)
Liability for unrecognized tax benefits at end of fiscal year	$	4,730		$	4,308		$	4,565

- Definition

Tabular disclosure of tax positions taken in the tax returns filed or to be filed for which it is more likely than not that the tax position will not be sustained upon examination by taxing authorities (i.e., uncertain tax positions) and other types of income tax contingencies, including: (1) the policy on classification of interest and penalties; (2) a tabular reconciliation of the total amounts of unrecognized tax benefits at the beginning and end of the period; the total amount(s) of: (3) unrecognized tax benefits that, if recognized, would affect the effective tax rate, and (4) interest and penalties recognized in each of the income statement and balance sheet; (5) for positions for which it is reasonably possible that the total amounts unrecognized will significantly change within 12 months of the reporting date the: (i) nature of the uncertainty, (ii) nature of the event that could occur that would cause the change, and (iii) an estimate of the range of the reasonably possible change or a statement that an estimate of the range cannot be made; and (6) a description of tax years that remain subject to examination by major tax jurisdictions.

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