18. Income Taxes

The Company’s components of income from continuing operations before income taxes and the corresponding provision for income taxes is as follows (in thousands):

The provision for income taxes differs from that which would have resulted from the use of the federal statutory income tax rate as follows (in thousands):

The significant items comprising the Company’s deferred tax assets and liabilities as of September 30, 2011 and 2010 are as follows (in thousands):

Due to deferred tax assets and liabilities in different tax jurisdictions, the net long-term assets and liabilities are reflected on the accompanying consolidated balance sheet as follows (in thousands):

We do not provide for U.S. income taxes on the undistributed earnings of our foreign subsidiaries, as we consider these to be indefinitely reinvested in the operations of such subsidiaries. If some of these earnings were distributed, some countries may impose withholding taxes; in addition, as foreign taxes have been previously paid on these earnings, we would expect to be entitled to a U.S. foreign tax credit that would reduce the U.S. taxes owed on such distributions. As at September 30, 2011, the approximate amount of cumulative earnings from foreign subsidiaries is $85.0 million. The amount of taxes that may be applicable on earnings planned to be reinvested indefinitely outside the United States is not readily determinable given the various tax planning alternatives the Company could employ should it decide to repatriate these earnings.

As of September 30, 2011, the Company had $4.0 million of net operating loss carryforwards related to a Canadian subsidiary. A full valuation allowance of $1.0 million has been established against the related deferred tax asset. These net operating loss carryforwards begin to expire at the end of fiscal 2027 through fiscal 2029.

Cash paid for income taxes during the years ended September 30, 2011, 2010, and 2009 was $45.2 million, $33.3 million and $24.1 million, respectively.

The Company accounts for uncertain tax positions by recognizing the financial statement effects of a tax position only when, based upon the technical merits, it is “more-likely-than-not” that the position will be sustained upon examination. The Company’s net unrecognized tax benefits totaled $1.2 million, $1.5 million and $1.9 million at September 30, 2011, 2010 and 2009, respectively. The total amount of unrecognized tax benefits that, if recognized, would affect the annual effective income tax rate is $1.2 million at September 30, 2011.

The Company has elected to report interest and penalties as a component of income tax expense. In the fiscal years ending September 30, 2011, 2010 and 2009, the Company recognized interest expense relating to unrecognized tax benefits of less than $0.1 million in each year. The net liability balance at September 30, 2011, 2010 and 2009 includes approximately $0.3 million of interest and penalties.

It is reasonably possible that the total amount of unrecognized tax benefits could decrease by as much as $0.1 million within the next twelve months as a result of settlement of expiration of statute of limitations, which could have an impact on the effective tax rate. The anticipated reversals are related to state tax items, none of which individually are significant.

The Company recognizes and presents uncertain tax positions on a gross basis (i.e., without regard to likely offsets for deferred tax assets, deductions and/or credits that would result from payment of uncertain tax amounts). The reconciliation of the beginning and ending amount of gross unrecognized tax benefits is as follows (in thousands):

The Company files income tax returns in the United States Federal jurisdiction and in various state and foreign jurisdictions. The Company is no longer subject to U.S. Federal income tax examinations for years before 2008 and is no longer subject to state and local, or foreign income tax examinations by tax authorities for years before 2006. In international jurisdictions, similar rules apply to filed income tax returns, although the tax examination limitations and requirements may vary. The Company is no longer subject to audit by tax authorities for overseas jurisdictions for years prior to 2004.