Income taxes

6 Months Ended

Apr. 30, 2011

Income taxes [Abstract]

Income taxes

16.	Income taxes. We record our interim provision for income taxes based on our estimated annual effective tax rate, as well as certain items discrete to the current period. The effective tax rates for the three and six-month periods ended April 30, 2011 were 29.8% and 29.7%, respectively.
	In December 2010, Congress passed and the President signed the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010, which provided retroactive reinstatement of a research credit. As a result, we recorded an additional tax benefit related to 2010 of $200 in the three months ended April 30, 2011, and $1,242 in the three months ended January 31, 2011. Additionally, in the three month period ended April 30, 2011 we recorded a $549 tax benefit related to prior years for deductions associated with our Employee Stock Ownership Plan.
	The balance of unrecognized tax benefits at April 30, 2011 was $4,216, compared to $4,078 at October 31, 2010. The amounts that, if recognized, would impact the effective tax rate were $4,157 and $4,019 at April 30, 2011 and October 31, 2010, respectively. At April 30, 2011 and October 31, 2010 we had accrued interest expense related to unrecognized tax benefits of $546 and $468, respectively.
	We are subject to United States Federal income tax as well as taxes in numerous state and foreign jurisdictions. We are currently under audit in the U.S. by the Internal Revenue Service (IRS) for the 2008 and 2009 tax years; tax years prior to 2007 are no longer subject to IRS audit. Generally, major state jurisdiction tax years remain open to examination for tax years after 2005; major foreign jurisdiction tax years remain open to examination for tax years after 2006. Within the next 12 months, it is reasonably possible that the U.S. audit could be completed and certain Federal, state, and foreign statute of limitations periods would expire, which could result in a decrease in our unrecognized tax benefits in a range of $0 to $1,800. The portion of the possible reduction that, if recognized, would impact the effective tax rate is $0 to $1,800.

The effective tax rates for the three and six-month periods ended April 30, 2010 were 42.5% and 35.5%, respectively. As a result of the enactment in March 2010 of the Patient Protection and Affordable Care Act and the subsequent enactment of the Health Care and Education Reconciliation Act of 2010, we recorded an additional tax charge of $5,255 in the three months ended April 30, 2010. The charge is due to a reduction in the value of our deferred tax asset as a result of a change to the tax treatment associated with Medicare Part D subsidies.

The effective tax rate for the six months ended April 30, 2010 was positively impacted by consolidation of certain operations and legal entities, resulting in a $3,500 tax benefit. This effect was partially offset by $438 of other adjustments related to our 2009 tax provision.