4. Income Taxes

The following table presents the Company’s provision for income taxes and effective income tax rate for the periods below:


	Three months ended						Nine months ended
	May 31,						May 31,
	2013			2012			2013			2012
Provision for income taxes	$	8,184		$	8,667		$	12,389		$	13,125
Effective income tax rate		35.6	%		37.6	%		33.6	%		37.8	%

The decrease in the Company’s effective income tax rate during the third quarter of fiscal year 2013 was primarily attributable to tax benefits related to disqualifying dispositions on stock options and a favorable annual return to provision adjustment. The decline in the effective income tax rate during the first nine months of fiscal year 2013 was attributable to the expiration of a state statute of limitations related to an uncertain tax position and legislation that reinstated and extended the Work Opportunity Tax Credit (“WOTC”) in the second quarter of fiscal year 2013, as well as an adjustment in fiscal year 2012 to deferred tax accounts.

As of May 31, 2013, the Company had $2.0 million of unrecognized tax benefits, including $0.4 million of interest and penalties. During the first nine months of fiscal year 2013, the liability for unrecognized tax benefits decreased by $3.5 million. The majority of the change was due to the favorable resolution of a federal tax audit, a statute of limitations expiration of a state tax position, a tax method change and a new uncertain position related to a federal credit. Of this change, only $0.1 million impacted the Company’s tax rate. The Company recognizes estimated interest and penalties as a component of its income tax expense, net of federal benefit. If recognized, the entire amount of unrecognized tax benefits would favorably impact the effective tax rate.

The Company or one of its subsidiaries is subject to U.S. federal income tax and income tax in multiple U.S. state jurisdictions. The Company is currently undergoing examinations or appeals by various state and federal authorities. The Company anticipates that the finalization of these examinations or appeals, combined with the expiration of applicable statutes of limitations and the additional accrual of interest related to unrecognized benefits on various return positions taken in years still open for examination, could result in a change to the liability for unrecognized tax benefits during the next 12 months ranging from a decrease of $1.4 million to an increase of $2.5 million depending on the timing and terms of the examination resolutions.