Income Taxes (Tables)

12 Months Ended

Jul. 31, 2014

Components of Loss from Continuing Operations before Provision for Income Taxes

The components of loss from continuing operations before provision for income taxes are as follows:

	Years Ended July 31,
	2014			2013			2012
	(in thousands)
Income (loss) from continuing operations before income taxes:
U.S.	$	(21,437	)	$	(41,257	)	$	(26,794	)
Foreign		9,891			7,321			3,466
Total loss from continuing operations before income taxes	$	(11,546	)	$	(33,936	)	$	(23,328	)

Components of Income Tax Expense

The components of income tax expense have been recorded in the Company’s consolidated financial statements as follows:

	Years Ended July 31,
	2014		2013		2012
	(in thousands)
Income tax expense from continuing operations	$	4,682	$	3,779	$	3,035
Total income tax expense	$	4,682	$	3,779	$	3,035

Components of Income Tax Expense from Continuing Operations

The components of income tax expense from continuing operations consist of the following:

	July 31,
	2014			2013			2012
	(in thousands)
Current provision:
Federal	$	—		$	—		$	—
State		—			—			—
Foreign		4,916			4,307			2,632
		4,916			4,307			2,632
Deferred provision:
Federal		—			—			—
State		—			—			—
Foreign		(234	)		(528	)		403
		(234	)		(528	)		403
Total tax provision	$	4,682		$	3,779		$	3,035

Components of Deferred Tax Assets and Liabilities

The components of deferred tax assets and liabilities are as follows:

	July 31, 2014									July 31, 2013
	Current			Non-current			Total			Current			Non-current			Total
	(In thousands)									(In thousands)
Deferred tax assets:
Accruals and reserves		9,634			4,981			14,615			9,304			6,409			15,713
Tax basis in excess of financial basis for intangible and fixed assets		—			17,251			17,251			—			15,413			15,413
Tax basis in excess of financial basis of investments in affiliates		—			9,699			9,699			—			8,002			8,002
Net operating loss and capital loss carry forwards		—			747,038			747,038			—			749,501			749,501
Total gross deferred tax assets		9,634			778,969			788,603			9,304			779,325			788,629
Less: valuation allowance		(8,364	)		(749,961	)		(758,325	)		(8,159	)		(758,199	)		(766,358	)
Net deferred tax assets		1,270			29,008			30,278			1,145			21,126			22,271
Deferred tax liabilities:
Accruals and reserves		(31	)		—			(31	)		(39	)		—			(39	)
Financial basis in excess of tax basis for intangible and fixed assets		—			(1,210	)		(1,210	)		—			(1,343	)		(1,343	)
Convertible Debt		—			(11,302	)		(11,302	)		—			—			—
Undistributed accumulated earnings of foreign subsidiaries		—			(14,680	)		(14,680	)		—			(18,010	)		(18,010	)
Total gross deferred tax liabilities		(31	)		(27,192	)		(27,223	)		(39	)		(19,353	)		(19,392	)
Net deferred tax asset (liability)		1,239			1,816			3,055			1,106			1,773			2,879

Subsequently Reported Tax Benefits Relating to Valuation Allowance for Deferred Tax Assets

Subsequently reported tax benefits relating to the valuation allowance for deferred tax assets as of July 31, 2014 will be allocated as follows (in thousands):

Income tax benefit recognized in the consolidated statement of operations	$	(742,864	)
Additional paid in capital		(15,461	)
	$	(758,325	)

Reconciliation of Income Tax Expense Attributable to Income from Continuing Operations

Income tax expense attributable to income from continuing operations differs from the expense computed by applying the U.S. federal income tax rate of 35% to income (loss) from continuing operations before income taxes as a result of the following:

	Years Ended July 31,
	2014			2013			2012
				(In thousands)
Computed “expected” income tax expense (benefit)	$	(3,907	)	$	(12,443	)	$	(12,447	)
Increase (decrease) in income tax expense resulting from:
Losses not benefited		3,282			13,413			11,112
Foreign dividends		5,737			2,956			3,298
Foreign tax rate differential		(750	)		(316	)		1,133
Capitalized costs		(54	)		100			179
Nondeductible expenses		(49	)		254			355
Foreign withholding taxes		423			218			542
Reversal of uncertain tax position reserves		—			(403	)		(1,137	)
Actual income tax expense	$	4,682		$	3,779		$	3,035

Reconciliation of Beginning and Ending Balances of Total Amounts of Gross Unrecognized Tax Benefits

A reconciliation of the beginning and ending balances of the total amounts of gross unrecognized tax benefits is as follows:

	Years Ended July 31,
	2014		2013			2012
			(In thousands)
Balance as of beginning of year	$	1,015	$	1,230		$	2,273
Additions for current year tax positions		13		79			73
Additions for prior year tax positions		—		—			564
Currency translation		—		33			—
Reductions for lapses in statute of limitations		—		(212	)		(1,680	)
Reductions of prior year tax positions		—		(115	)		—
Balance as of end of year	$	1,028	$	1,015		$	1,230