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INCOME TAXES
3 Months Ended
Oct. 31, 2013
Income Tax Disclosure [Abstract]  
INCOME TAXES
INCOME TAXES
The Company’s effective tax rates on continuing operations for the three months ended October 31, 2013 and October 31, 2012 were 22.6% and 14.9%, respectively. For the three months ended October 31, 2013, the effective tax rate varied from the U.S. federal statutory rate primarily due to the benefits of foreign operations. For the three months ended October 31, 2012, the effective tax rate varied from the U.S. federal statutory rate primarily due to the benefits of foreign operations and a net tax benefit of $7,757 primarily from the resolution of a U.S. tax audit partly offset by the establishment of deferred tax liabilities for the repatriation of foreign earnings.
During the three months ended October 31, 2012, the Company reached a final agreement with the Internal Revenue Service (“IRS”) resolving the outstanding tax positions for fiscal years ended 2006 through 2008. As a result, the Company reversed $10,193 of previously recorded liabilities related to tax and penalties, as well as $6,704 related to interest ($4,268 net of income tax cost) that were accrued but not assessed as part of the IRS agreement.
At October 31, 2013 and July 31, 2013, the Company had gross unrecognized income tax benefits of $206,479 and $203,376, respectively. During the three months ended October 31, 2013, the amount of gross unrecognized tax benefits increased by $3,103, primarily due to tax positions taken during the current period and the impact of foreign currency translation. As of October 31, 2013, the amount of net unrecognized income tax benefits that, if recognized, would impact the effective tax rate was $157,531.
At October 31, 2013 and July 31, 2013, the Company had liabilities of $19,235 and $18,622, respectively, for potential payment of interest and penalties.
Due to the potential resolution of tax examinations and the expiration of various statutes of limitation, the Company believes that it is reasonably possible that the gross amount of unrecognized tax benefits may decrease within the next twelve months by a range of zero to $65,069.