Income Taxes (Tables)

12 Months Ended

Sep. 30, 2016

Our income (loss) before income taxes consisted of the following:



	Year ended September 30,
	2016			2015			2014
	(in thousands)
Domestic	$	(156,166	)	$	(110,867	)	$	17,038
Foreign	88,974			137,392			169,074
Total income before income taxes	$	(67,192	)	$	26,525		$	186,112

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



	Year ended September 30,
	2016			2015			2014
	(in thousands)
Current:
Federal	$	2,417		$	3,907		$	12,792
State	571			599			2,062
Foreign	28,467			23,823			31,010
	31,455			28,329			45,864
Deferred:
Federal	965			(20,809		)	(13,200		)
State	515			(566		)	(2,085		)
Foreign	(45,662		)	(27,986		)	(4,661		)
	(44,182		)	(49,361		)	(19,946		)
Total provision (benefit) for income taxes	$	(12,727	)	$	(21,032	)	$	25,918

The reconciliation between the statutory federal income tax rate and our effective income tax rate is shown below:



	Year ended September 30,
	2016		2015		2014
Statutory federal income tax rate	(35	)%	35	%	35	%
Change in valuation allowance	57	%	63	%	(11	)%
State income taxes, net of federal tax benefit	—	%	7	%	1	%
Federal and state research and development credits	(9	)%	(8	)%	—	%
Resolution of uncertain tax positions	—	%	(11	)%	—	%
Foreign rate differences	(41	)%	(213	)%	(19	)%
Foreign withholding tax	3	%	14	%	3	%
U.S. permanent items	4	%	34	%	4	%
Other, net	2	%	—	%	1	%
Effective income tax rate	(19	)%	(79	)%	14	%

The significant temporary differences that created deferred tax assets and liabilities are shown below:



	September 30,
	2016			2015
	(in thousands)
Deferred tax assets (1):
Net operating loss carryforwards	$	100,033		$	71,533
Foreign tax credits	18,041			15,962
Capitalized research and development expense	22,504			31,690
Pension benefits	14,348			11,009
Deferred revenue	65,145			71,399
Stock-based compensation	19,846			16,777
Other reserves not currently deductible	25,993			21,940
Amortization of intangible assets	54,069			62,227
Other tax credits	41,381			37,270
Depreciation	3,002			3,465
Capital loss carryforward	8,019			8,040
Deferred interest	7,622			3,557
Other	14,778			6,559
Gross deferred tax assets	394,781			361,428
Valuation allowance	(235,503		)	(198,168		)
Total deferred tax assets	159,278			163,260
Deferred tax liabilities (1):
Acquired intangible assets not deductible	(78,663		)	(124,401		)
Pension prepayments	(542		)	(395		)
Deferred revenue	(2,039		)	(3,110		)
Other	(2,092		)	(3,598		)
Total deferred tax liabilities	(83,336		)	(131,504		)
Net deferred tax assets	$	75,942		$	31,756

(1) See Note B. Recent Accounting Pronouncements-Deferred Taxes regarding a change in the balance sheet classification of our deferred taxes.

The changes to the valuation allowance were primarily due to:



	Year ended September 30,
	2016			2015			2014
	(in millions)
Valuation allowance beginning of year	$	198.2		$	177.5		$	156.5
Net release of valuation allowance (1)	(3.1		)	(18.7		)	(18.1		)
Net increase/decrease in deferred tax assets with a full valuation allowance	39.8			39.4			14.1
Establish valuation allowance for acquired businesses	—			—			21.5
Establish valuation allowance in foreign jurisdictions	0.6			—			3.5
Valuation allowance end of year	$	235.5		$	198.2		$	177.5


(1)	In 2016, this is attributable to the release in two foreign jurisdictions. In 2015, this is attributable to a reduction in deferred tax assets associated with our U.S. pension plan, both of which are described above and in 2014 the recognition of deferred tax liabilities recorded in connection with accounting for acquisitions.



	Year ended September 30,
Unrecognized tax benefits	2016		2015			2014
	(in millions)
Unrecognized tax benefit beginning of year	$	14.1	$	15.0		$	13.7
Tax positions related to current year:
Additions	1.0		1.3			2.2
Tax positions related to prior years:
Additions	0.4		0.8			0.3
Reductions	—		(3.0		)	(0.1		)
Settlements	—		—			(0.6		)
Statute expirations	—		—			(0.5		)
Unrecognized tax benefit end of year	$	15.5	$	14.1		$	15.0

As of September 30, 2016, we remained subject to examination in the following major tax jurisdictions for the tax years indicated: