INCOME TAXES

The quarterly provision for income taxes is calculated using an estimated annual effective income tax rate, adjusted for discrete items that occur during the reporting period. The effective tax rate for each of the three and nine months ended July 31, 2014 was 40.5% and 41.6%, respectively, as compared to 40.5% and 35.8% for the three and nine months ended July 31, 2013, respectively. The effective tax rate for the nine months ended July 31, 2014 was higher than the rate for the nine months ended July 31, 2013 primarily due to (a) the expiration of the Work Opportunity Tax Credit (“WOTC”) as of December 31, 2013 and (b) the retroactive reinstatement of the WOTC for calendar year 2012, which occurred during the nine months ended July 31, 2013. At July 31, 2014, we had unrecognized tax benefits of $88.6 million, $81.9 million of which, if recognized in the future, would impact our effective tax rate.

We do business in all 50 states, significantly in California, Texas, and New York, as well as in various foreign jurisdictions. Our most significant income tax jurisdiction is the United States. The following table summarizes by entity the tax years that are either currently being examined or remain open for examination:



Entity	Open for examination
ABM state tax returns ⁽¹⁾	10/31/2009 – 10/31/2013
ABM federal tax returns	10/31/2010 – 10/31/2013
Linc entities taxable as corporations	12/31/2010
Air Serv ⁽²⁾	6/30/2010 – 10/31/2012
HHA	12/31/2010 – 10/31/2012

(1) We are currently being examined by the taxing authorities in the states of New Jersey and Michigan.

(2) Air Serv is currently being examined by the Internal Revenue Service for its tax year ended June 30, 2011.