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| <NonNumbericText> <div style="font-size:10.0pt;font-family:Times New Roman;"> <p style="TEXT-ALIGN: justify; FONT-FAMILY: times;"><font size="2"><b>13. INCOME TAXES</b></font></p> <p style="TEXT-ALIGN: justify; FONT-FAMILY: times;"><font size="2"> Currently, we file a consolidated U.S. federal income tax return. The effective income tax rate from continuing operations varies from the federal statutory rate of 35 percent as follows (in thousands):</font></p> <div style="POSITION: relative; PADDING-BOTTOM: 0pt; PADDING-LEFT: 0pt; WIDTH: 70%; PADDING-RIGHT: 0pt; MARGIN-LEFT: 15%; PADDING-TOP: 0pt;"> <p style="TEXT-ALIGN: justify; FONT-FAMILY: times;"><font size="2"><!-- COMMAND=ADD_TABLEWIDTH,"100%" --></font></p> <!-- User-specified TAGGED TABLE --> <div align="center"> <table border="0" cellspacing="0" cellpadding="0" width="100%" style="text-align:left;"> <tr style="padding:0;"><!-- TABLE COLUMN WIDTHS SET --> <td style="FONT-FAMILY: times;" align="left"></td> <td style="FONT-FAMILY: times;" width="12"></td> <td style="FONT-FAMILY: times;" width="7" align="right"></td> <td style="FONT-FAMILY: times;" width="44"></td> <td style="FONT-FAMILY: times;" width="12"></td> <td style="FONT-FAMILY: times;" width="7" align="right"></td> <td style="FONT-FAMILY: times;" width="44"></td> <td style="FONT-FAMILY: times;" width="12"></td> <td style="FONT-FAMILY: times;" width="7" align="right"></td> <td style="FONT-FAMILY: times;" width="50"></td> <td style="FONT-FAMILY: times;" width="12"></td><!-- TABLE COLUMN WIDTHS END --></tr> <tr style="padding:0;" valign="bottom"> <th style="FONT-FAMILY: times;" align="left"><font size="2"> </font><br /></th> <th style="FONT-FAMILY: times;"><font size="1"> </font></th> <th style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times;" colspan="8" align="center"><font size="1"><b>Year Ended July 31,</b></font></th> <th style="FONT-FAMILY: times;"><font size="1"> </font></th></tr> <tr style="padding:0;" valign="bottom"> <th style="FONT-FAMILY: times;" align="left"><font size="1"> </font><br /></th> <th style="FONT-FAMILY: times;"><font size="1"> </font></th> <th style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times;" colspan="2" align="center"><font size="1"><b>2013</b></font></th> <th style="FONT-FAMILY: times;"><font size="1"> </font></th> <th style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times;" colspan="2" align="center"><font size="1"><b>2012</b></font></th> <th style="FONT-FAMILY: times;"><font size="1"> </font></th> <th style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times;" colspan="2" align="center"><font size="1"><b>2011</b></font></th> <th style="FONT-FAMILY: times;"><font size="1"> </font></th></tr> <tr style="padding:0;" valign="top" bgcolor="#CCEEFF"> <td style="FONT-FAMILY: times;" valign="bottom"> <p style="TEXT-INDENT: -10pt; FONT-FAMILY: times; MARGIN-LEFT: 10pt;"><font size="2">Federal income tax expense (benefit) at statutory rate</font></p></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">$</font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">4,177</font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">$</font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">(8,936</font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2">)</font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">$</font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">(38,750</font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2">)</font></td></tr> <tr style="padding:0;" valign="top" bgcolor="white"> <td style="FONT-FAMILY: times;" valign="bottom"> <p style="TEXT-INDENT: -10pt; FONT-FAMILY: times; MARGIN-LEFT: 10pt;"><font size="2">State income taxes, net of federal benefit</font></p></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">858</font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">(2,767</font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2">)</font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">(4,250</font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2">)</font></td></tr> <tr style="padding:0;" valign="top" bgcolor="#CCEEFF"> <td style="FONT-FAMILY: times;" valign="bottom"> <p style="TEXT-INDENT: -10pt; FONT-FAMILY: times; MARGIN-LEFT: 10pt;"><font size="2">Tax on repatriation of foreign earnings</font></p></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">3,954</font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">5,950</font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">14,099</font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td></tr> <tr style="padding:0;" valign="top" bgcolor="white"> <td style="FONT-FAMILY: times;" valign="bottom"> <p style="TEXT-INDENT: -10pt; FONT-FAMILY: times; MARGIN-LEFT: 10pt;"><font size="2">Foreign tax rate changes and differential(a)</font></p></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">577</font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">225</font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">(1,274</font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2">)</font></td></tr> <tr style="padding:0;" valign="top" bgcolor="#CCEEFF"> <td style="FONT-FAMILY: times;" valign="bottom"> <p style="TEXT-INDENT: -10pt; FONT-FAMILY: times; MARGIN-LEFT: 10pt;"><font size="2">Change in valuation allowance</font></p></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">(6,977</font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2">)</font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">2,285</font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">44,406</font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td></tr> <tr style="padding:0;" valign="top" bgcolor="white"> <td style="FONT-FAMILY: times;" valign="bottom"> <p style="TEXT-INDENT: -10pt; FONT-FAMILY: times; MARGIN-LEFT: 10pt;"><font size="2">Depreciation and amortization adjustment(b)</font></p></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">—</font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">—</font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">(8,512</font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2">)</font></td></tr> <tr style="padding:0;" valign="top" bgcolor="#CCEEFF"> <td style="FONT-FAMILY: times;" valign="bottom"> <p style="TEXT-INDENT: -10pt; FONT-FAMILY: times; MARGIN-LEFT: 10pt;"><font size="2">Other</font></p></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">(665</font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2">)</font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">4,608</font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">(4,162</font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2">)</font></td></tr> <tr style="padding:0; FONT-SIZE: 1.5pt;" valign="top"> <td style="FONT-FAMILY: times;" valign="bottom"> </td> <td style="FONT-FAMILY: times;" valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times;" valign="bottom" colspan="2" align="right"> </td> <td style="FONT-FAMILY: times;" valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times;" valign="bottom" colspan="2" align="right"> </td> <td style="FONT-FAMILY: times;" valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times;" valign="bottom" colspan="2" align="right"> </td> <td style="FONT-FAMILY: times;" valign="bottom"> </td></tr> <tr style="padding:0;" valign="top" bgcolor="white"> <td style="FONT-FAMILY: times;" valign="bottom"> <p style="TEXT-INDENT: -10pt; FONT-FAMILY: times; MARGIN-LEFT: 10pt;"><font size="2">Income tax expense</font></p></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">$</font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">1,924</font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">$</font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">1,365</font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">$</font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">1,557</font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td></tr> <tr style="padding:0; FONT-SIZE: 1.5pt;" valign="top"> <td style="FONT-FAMILY: times;" valign="bottom"> </td> <td style="FONT-FAMILY: times;" valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: times;" valign="bottom" colspan="2" align="right"> </td> <td style="FONT-FAMILY: times;" valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: times;" valign="bottom" colspan="2" align="right"> </td> <td style="FONT-FAMILY: times;" valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: times;" valign="bottom" colspan="2" align="right"> </td> <td style="FONT-FAMILY: times;" valign="bottom"> </td></tr> <tr style="padding:0;" valign="top" bgcolor="#CCEEFF"> <td style="FONT-FAMILY: times;" valign="bottom"> <p style="TEXT-INDENT: -10pt; FONT-FAMILY: times; MARGIN-LEFT: 10pt;"><font size="2">Effective income tax rate</font></p></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">16.1</font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2">%</font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">(5.3</font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2">)%</font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">(1.4</font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2">)%</font></td></tr> <tr style="padding:0; FONT-SIZE: 1.5pt;" valign="top"> <td style="FONT-FAMILY: times;" valign="bottom"> </td> <td style="FONT-FAMILY: times;" valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: times;" valign="bottom" colspan="2" align="right"> </td> <td style="FONT-FAMILY: times;" valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: times;" valign="bottom" colspan="2" align="right"> </td> <td style="FONT-FAMILY: times;" valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: times;" valign="bottom" colspan="2" align="right"> </td> <td style="FONT-FAMILY: times;" valign="bottom"> </td></tr></table></div> <!-- end of user-specified TAGGED TABLE --></div> <!-- COMMAND=ADD_LINERULETXT,NOSHADE COLOR="#000000" SIZE="1.0PT" WIDTH="26%" ALIGN="LEFT" --> <hr style="COLOR: #000000;" align="left" size="1" width="26%" noshade="noshade" /> <dl compact="compact"> <dt style="FONT-FAMILY: times; MARGIN-BOTTOM: -11pt;"><font size="2">(a)</font></dt> <dd style="TEXT-ALIGN: justify; FONT-FAMILY: times;"><font size="2">For the past three years, Canada has reduced both its federal statutory and provincial tax rates. In fiscal year 2012, Puerto Rico reduced its federal statutory tax rate. Foreign tax rate differential represents the difference between the statutory tax rate in the U.S. and the statutory tax rates in Canada and Puerto Rico.<br /> <br /></font></dd> <dt style="FONT-FAMILY: times; MARGIN-BOTTOM: -11pt;"><font size="2">(b)</font></dt> <dd style="TEXT-ALIGN: justify; FONT-FAMILY: times;"><font size="2">The $8.5 million adjustment in fiscal year 2011 was fully offset with a valuation allowance, resulting in no impact to the consolidated statement of operations.</font></dd></dl> <p style="TEXT-ALIGN: justify; FONT-FAMILY: times;"><font size="2"> The provision for income taxes from continuing operations consists of the following (in thousands):</font></p> <div style="POSITION: relative; PADDING-BOTTOM: 0pt; PADDING-LEFT: 0pt; WIDTH: 70%; PADDING-RIGHT: 0pt; MARGIN-LEFT: 15%; PADDING-TOP: 0pt;"> <p style="TEXT-ALIGN: justify; FONT-FAMILY: times;"><font size="2"><!-- COMMAND=ADD_TABLEWIDTH,"100%" --></font></p> <!-- User-specified TAGGED TABLE --> <div align="center"> <table border="0" cellspacing="0" cellpadding="0" width="100%" style="text-align:left;"> <tr style="padding:0;"><!-- TABLE COLUMN WIDTHS SET --> <td style="FONT-FAMILY: times;" align="left"></td> <td style="FONT-FAMILY: times;" width="12"></td> <td style="FONT-FAMILY: times;" width="7" align="right"></td> <td style="FONT-FAMILY: times;" width="39"></td> <td style="FONT-FAMILY: times;" width="12"></td> <td style="FONT-FAMILY: times;" width="7" align="right"></td> <td style="FONT-FAMILY: times;" width="44"></td> <td style="FONT-FAMILY: times;" width="12"></td> <td style="FONT-FAMILY: times;" width="7" align="right"></td> <td style="FONT-FAMILY: times;" width="44"></td> <td style="FONT-FAMILY: times;" width="12"></td><!-- TABLE COLUMN WIDTHS END --></tr> <tr style="padding:0;" valign="bottom"> <th style="FONT-FAMILY: times;" align="left"><font size="2"> </font><br /></th> <th style="FONT-FAMILY: times;"><font size="1"> </font></th> <th style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times;" colspan="8" align="center"><font size="1"><b>Year Ended July 31,</b></font></th> <th style="FONT-FAMILY: times;"><font size="1"> </font></th></tr> <tr style="padding:0;" valign="bottom"> <th style="FONT-FAMILY: times;" align="left"><font size="1"> </font><br /></th> <th style="FONT-FAMILY: times;"><font size="1"> </font></th> <th style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times;" colspan="2" align="center"><font size="1"><b>2013</b></font></th> <th style="FONT-FAMILY: times;"><font size="1"> </font></th> <th style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times;" colspan="2" align="center"><font size="1"><b>2012</b></font></th> <th style="FONT-FAMILY: times;"><font size="1"> </font></th> <th style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times;" colspan="2" align="center"><font size="1"><b>2011</b></font></th> <th style="FONT-FAMILY: times;"><font size="1"> </font></th></tr> <tr style="padding:0;" valign="top" bgcolor="#CCEEFF"> <td style="FONT-FAMILY: times;" valign="bottom"> <p style="TEXT-INDENT: -10pt; FONT-FAMILY: times; MARGIN-LEFT: 10pt;"><font size="2">Current income tax expense (benefit):</font></p></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td></tr> <tr style="padding:0;" valign="top" bgcolor="white"> <td style="FONT-FAMILY: times;" valign="bottom"> <p style="TEXT-INDENT: -10pt; FONT-FAMILY: times; MARGIN-LEFT: 10pt;"><font size="2">Federal</font></p></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">$</font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">232</font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">$</font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">349</font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">$</font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">(9,628</font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2">)</font></td></tr> <tr style="padding:0;" valign="top" bgcolor="#CCEEFF"> <td style="FONT-FAMILY: times;" valign="bottom"> <p style="TEXT-INDENT: -10pt; FONT-FAMILY: times; MARGIN-LEFT: 10pt;"><font size="2">Foreign</font></p></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">1,131</font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">664</font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">5,003</font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td></tr> <tr style="padding:0;" valign="top" bgcolor="white"> <td style="FONT-FAMILY: times;" valign="bottom"> <p style="TEXT-INDENT: -10pt; FONT-FAMILY: times; MARGIN-LEFT: 10pt;"><font size="2">State</font></p></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">(604</font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2">)</font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">(1,206</font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2">)</font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">910</font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td></tr> <tr style="padding:0; FONT-SIZE: 1.5pt;" valign="top"> <td style="FONT-FAMILY: times;" valign="bottom"> </td> <td style="FONT-FAMILY: times;" valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times;" valign="bottom" colspan="2" align="right"> </td> <td style="FONT-FAMILY: times;" valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times;" valign="bottom" colspan="2" align="right"> </td> <td style="FONT-FAMILY: times;" valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times;" valign="bottom" colspan="2" align="right"> </td> <td style="FONT-FAMILY: times;" valign="bottom"> </td></tr> <tr style="padding:0;" valign="top" bgcolor="#CCEEFF"> <td style="FONT-FAMILY: times;" valign="bottom"> <p style="TEXT-INDENT: -10pt; FONT-FAMILY: times; MARGIN-LEFT: 20pt;"><font size="2">Total current income tax expense (benefit)</font></p></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">759</font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">(193</font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2">)</font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">(3,715</font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2">)</font></td></tr> <tr style="padding:0; FONT-SIZE: 1.5pt;" valign="top"> <td style="FONT-FAMILY: times;" valign="bottom"> </td> <td style="FONT-FAMILY: times;" valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times;" valign="bottom" colspan="2" align="right"> </td> <td style="FONT-FAMILY: times;" valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times;" valign="bottom" colspan="2" align="right"> </td> <td style="FONT-FAMILY: times;" valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times;" valign="bottom" colspan="2" align="right"> </td> <td style="FONT-FAMILY: times;" valign="bottom"> </td></tr> <tr style="padding:0;" valign="top" bgcolor="white"> <td style="FONT-FAMILY: times;" valign="bottom"> <p style="TEXT-INDENT: -10pt; FONT-FAMILY: times; MARGIN-LEFT: 10pt;"><font size="2">Deferred income tax expense:</font></p></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td></tr> <tr style="padding:0;" valign="top" bgcolor="#CCEEFF"> <td style="FONT-FAMILY: times;" valign="bottom"> <p style="TEXT-INDENT: -10pt; FONT-FAMILY: times; MARGIN-LEFT: 10pt;"><font size="2">Federal</font></p></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">102</font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">(166</font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2">)</font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">5,114</font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td></tr> <tr style="padding:0;" valign="top" bgcolor="white"> <td style="FONT-FAMILY: times;" valign="bottom"> <p style="TEXT-INDENT: -10pt; FONT-FAMILY: times; MARGIN-LEFT: 10pt;"><font size="2">Foreign</font></p></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">986</font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">1,675</font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">159</font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td></tr> <tr style="padding:0;" valign="top" bgcolor="#CCEEFF"> <td style="FONT-FAMILY: times;" valign="bottom"> <p style="TEXT-INDENT: -10pt; FONT-FAMILY: times; MARGIN-LEFT: 10pt;"><font size="2">State</font></p></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">77</font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">49</font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">(1</font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2">)</font></td></tr> <tr style="padding:0; FONT-SIZE: 1.5pt;" valign="top"> <td style="FONT-FAMILY: times;" valign="bottom"> </td> <td style="FONT-FAMILY: times;" valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times;" valign="bottom" colspan="2" align="right"> </td> <td style="FONT-FAMILY: times;" valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times;" valign="bottom" colspan="2" align="right"> </td> <td style="FONT-FAMILY: times;" valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times;" valign="bottom" colspan="2" align="right"> </td> <td style="FONT-FAMILY: times;" valign="bottom"> </td></tr> <tr style="padding:0;" valign="top" bgcolor="white"> <td style="FONT-FAMILY: times;" valign="bottom"> <p style="TEXT-INDENT: -10pt; FONT-FAMILY: times; MARGIN-LEFT: 20pt;"><font size="2">Total deferred income tax expense</font></p></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">1,165</font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">1,558</font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">5,272</font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td></tr> <tr style="padding:0; FONT-SIZE: 1.5pt;" valign="top"> <td style="FONT-FAMILY: times;" valign="bottom"> </td> <td style="FONT-FAMILY: times;" valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times;" valign="bottom" colspan="2" align="right"> </td> <td style="FONT-FAMILY: times;" valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times;" valign="bottom" colspan="2" align="right"> </td> <td style="FONT-FAMILY: times;" valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times;" valign="bottom" colspan="2" align="right"> </td> <td style="FONT-FAMILY: times;" valign="bottom"> </td></tr> <tr style="padding:0;" valign="top" bgcolor="#CCEEFF"> <td style="FONT-FAMILY: times;" valign="bottom"> <p style="TEXT-INDENT: -10pt; FONT-FAMILY: times; MARGIN-LEFT: 10pt;"> </p></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">$</font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">1,924</font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">$</font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">1,365</font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">$</font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">1,557</font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td></tr> <tr style="padding:0; FONT-SIZE: 1.5pt;" valign="top"> <td style="FONT-FAMILY: times;" valign="bottom"> </td> <td style="FONT-FAMILY: times;" valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: times;" valign="bottom" colspan="2" align="right"> </td> <td style="FONT-FAMILY: times;" valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: times;" valign="bottom" colspan="2" align="right"> </td> <td style="FONT-FAMILY: times;" valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: times;" valign="bottom" colspan="2" align="right"> </td> <td style="FONT-FAMILY: times;" valign="bottom"> </td></tr></table></div> <!-- end of user-specified TAGGED TABLE --></div> <p style="TEXT-ALIGN: justify; FONT-FAMILY: times;"><font size="2"> Deferred tax assets and liabilities are determined based on the estimated future tax effects of the difference between the financial statement and tax basis of asset and liability balances using statutory tax rates. Tax effects of temporary differences that give rise to significant components of the deferred tax assets and deferred tax liabilities at July 31, 2013 and 2012, respectively, are as follows (in thousands):</font></p> <div style="POSITION: relative; PADDING-BOTTOM: 0pt; PADDING-LEFT: 0pt; WIDTH: 70%; PADDING-RIGHT: 0pt; MARGIN-LEFT: 15%; PADDING-TOP: 0pt;"> <p style="TEXT-ALIGN: justify; FONT-FAMILY: times;"><font size="2"><!-- COMMAND=ADD_TABLEWIDTH,"100%" --></font></p> <!-- User-specified TAGGED TABLE --> <div align="center"> <table border="0" cellspacing="0" cellpadding="0" width="100%" style="text-align:left;"> <tr style="padding:0;"><!-- TABLE COLUMN WIDTHS SET --> <td style="FONT-FAMILY: times;" align="left"></td> <td style="FONT-FAMILY: times;" width="12"></td> <td style="FONT-FAMILY: times;" width="7" align="right"></td> <td style="FONT-FAMILY: times;" width="56"></td> <td style="FONT-FAMILY: times;" width="12"></td> <td style="FONT-FAMILY: times;" width="7" align="right"></td> <td style="FONT-FAMILY: times;" width="56"></td> <td style="FONT-FAMILY: times;" width="12"></td><!-- TABLE COLUMN WIDTHS END --></tr> <tr style="padding:0;" valign="bottom"> <th style="FONT-FAMILY: times;" align="left"><font size="2"> </font><br /></th> <th style="FONT-FAMILY: times;"><font size="1"> </font></th> <th style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times;" colspan="5" align="center"><font size="1"><b>Year Ended July 31,</b></font></th> <th style="FONT-FAMILY: times;"><font size="1"> </font></th></tr> <tr style="padding:0;" valign="bottom"> <th style="FONT-FAMILY: times;" align="left"><font size="1"> </font><br /></th> <th style="FONT-FAMILY: times;"><font size="1"> </font></th> <th style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times;" colspan="2" align="center"><font size="1"><b>2013</b></font></th> <th style="FONT-FAMILY: times;"><font size="1"> </font></th> <th style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times;" colspan="2" align="center"><font size="1"><b>2012</b></font></th> <th style="FONT-FAMILY: times;"><font size="1"> </font></th></tr> <tr style="padding:0;" valign="top" bgcolor="#CCEEFF"> <td style="FONT-FAMILY: times;" valign="bottom"> <p style="TEXT-INDENT: -10pt; FONT-FAMILY: times; MARGIN-LEFT: 10pt;"><font size="2">Assets:</font></p></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td></tr> <tr style="padding:0;" valign="top" bgcolor="white"> <td style="FONT-FAMILY: times;" valign="bottom"> <p style="TEXT-INDENT: -10pt; FONT-FAMILY: times; MARGIN-LEFT: 20pt;"><font size="2">Accrued liabilities</font></p></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">$</font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">78,754</font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">$</font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">84,515</font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td></tr> <tr style="padding:0;" valign="top" bgcolor="#CCEEFF"> <td style="FONT-FAMILY: times;" valign="bottom"> <p style="TEXT-INDENT: -10pt; FONT-FAMILY: times; MARGIN-LEFT: 20pt;"><font size="2">Inventory reserves</font></p></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">7,220</font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">7,083</font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td></tr> <tr style="padding:0;" valign="top" bgcolor="white"> <td style="FONT-FAMILY: times;" valign="bottom"> <p style="TEXT-INDENT: -10pt; FONT-FAMILY: times; MARGIN-LEFT: 20pt;"><font size="2">Deferred income</font></p></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">14,033</font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">—</font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td></tr> <tr style="padding:0;" valign="top" bgcolor="#CCEEFF"> <td style="FONT-FAMILY: times;" valign="bottom"> <p style="TEXT-INDENT: -10pt; FONT-FAMILY: times; MARGIN-LEFT: 20pt;"><font size="2">Net operating loss carryforward</font></p></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">100,407</font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">120,277</font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td></tr> <tr style="padding:0;" valign="top" bgcolor="white"> <td style="FONT-FAMILY: times;" valign="bottom"> <p style="TEXT-INDENT: -10pt; FONT-FAMILY: times; MARGIN-LEFT: 20pt;"><font size="2">Stock-based compensation</font></p></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">7,067</font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">7,160</font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td></tr> <tr style="padding:0;" valign="top" bgcolor="#CCEEFF"> <td style="FONT-FAMILY: times;" valign="bottom"> <p style="TEXT-INDENT: -10pt; FONT-FAMILY: times; MARGIN-LEFT: 20pt;"><font size="2">Investments in subsidiaries</font></p></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">3,177</font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">1,752</font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td></tr> <tr style="padding:0;" valign="top" bgcolor="white"> <td style="FONT-FAMILY: times;" valign="bottom"> <p style="TEXT-INDENT: -10pt; FONT-FAMILY: times; MARGIN-LEFT: 20pt;"><font size="2">Foreign tax credits</font></p></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">13,978</font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">12,609</font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td></tr> <tr style="padding:0;" valign="top" bgcolor="#CCEEFF"> <td style="FONT-FAMILY: times;" valign="bottom"> <p style="TEXT-INDENT: -10pt; FONT-FAMILY: times; MARGIN-LEFT: 20pt;"><font size="2">Property and equipment</font></p></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">9,355</font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">9,326</font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td></tr> <tr style="padding:0;" valign="top" bgcolor="white"> <td style="FONT-FAMILY: times;" valign="bottom"> <p style="TEXT-INDENT: -10pt; FONT-FAMILY: times; MARGIN-LEFT: 20pt;"><font size="2">Other</font></p></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">2,854</font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">5,986</font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td></tr> <tr style="padding:0; FONT-SIZE: 1.5pt;" valign="top"> <td style="FONT-FAMILY: times;" valign="bottom"> </td> <td style="FONT-FAMILY: times;" valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times;" valign="bottom" colspan="2" align="right"> </td> <td style="FONT-FAMILY: times;" valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times;" valign="bottom" colspan="2" align="right"> </td> <td style="FONT-FAMILY: times;" valign="bottom"> </td></tr> <tr style="padding:0;" valign="top" bgcolor="#CCEEFF"> <td style="FONT-FAMILY: times;" valign="bottom"> <p style="TEXT-INDENT: -10pt; FONT-FAMILY: times; MARGIN-LEFT: 30pt;"><font size="2">Total deferred tax assets</font></p></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">236,845</font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">248,708</font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td></tr> <tr style="padding:0;" valign="top" bgcolor="white"> <td style="FONT-FAMILY: times;" valign="bottom"> <p style="TEXT-INDENT: -10pt; FONT-FAMILY: times; MARGIN-LEFT: 20pt;"><font size="2">Valuation allowances</font></p></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">(92,149</font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2">)</font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">(98,995</font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2">)</font></td></tr> <tr style="padding:0; FONT-SIZE: 1.5pt;" valign="top"> <td style="FONT-FAMILY: times;" valign="bottom"> </td> <td style="FONT-FAMILY: times;" valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times;" valign="bottom" colspan="2" align="right"> </td> <td style="FONT-FAMILY: times;" valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times;" valign="bottom" colspan="2" align="right"> </td> <td style="FONT-FAMILY: times;" valign="bottom"> </td></tr> <tr style="padding:0;" valign="top" bgcolor="#CCEEFF"> <td style="FONT-FAMILY: times;" valign="bottom"> <p style="TEXT-INDENT: -10pt; FONT-FAMILY: times; MARGIN-LEFT: 30pt;"><font size="2">Total deferred tax assets, net</font></p></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">$</font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">144,696</font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">$</font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">149,713</font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td></tr> <tr style="padding:0; FONT-SIZE: 1.5pt;" valign="top"> <td style="FONT-FAMILY: times;" valign="bottom"> </td> <td style="FONT-FAMILY: times;" valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times;" valign="bottom" colspan="2" align="right"> </td> <td style="FONT-FAMILY: times;" valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times;" valign="bottom" colspan="2" align="right"> </td> <td style="FONT-FAMILY: times;" valign="bottom"> </td></tr> <tr style="padding:0;" valign="top" bgcolor="white"> <td style="FONT-FAMILY: times;" valign="bottom"> <p style="TEXT-INDENT: -10pt; FONT-FAMILY: times; MARGIN-LEFT: 10pt;"><font size="2">Liabilities:</font></p></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td></tr> <tr style="padding:0;" valign="top" bgcolor="#CCEEFF"> <td style="FONT-FAMILY: times;" valign="bottom"> <p style="TEXT-INDENT: -10pt; FONT-FAMILY: times; MARGIN-LEFT: 20pt;"><font size="2">Merchandise inventories, principally due to LIFO reserve</font></p></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">$</font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">(129,273</font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2">)</font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">$</font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">(119,256</font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2">)</font></td></tr> <tr style="padding:0;" valign="top" bgcolor="white"> <td style="FONT-FAMILY: times;" valign="bottom"> <p style="TEXT-INDENT: -10pt; FONT-FAMILY: times; MARGIN-LEFT: 20pt;"><font size="2">Undistributed earnings</font></p></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">—</font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">(13,973</font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2">)</font></td></tr> <tr style="padding:0;" valign="top" bgcolor="#CCEEFF"> <td style="FONT-FAMILY: times;" valign="bottom"> <p style="TEXT-INDENT: -10pt; FONT-FAMILY: times; MARGIN-LEFT: 20pt;"><font size="2">Goodwill</font></p></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">(13,869</font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2">)</font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">(13,941</font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2">)</font></td></tr> <tr style="padding:0;" valign="top" bgcolor="white"> <td style="FONT-FAMILY: times;" valign="bottom"> <p style="TEXT-INDENT: -10pt; FONT-FAMILY: times; MARGIN-LEFT: 20pt;"><font size="2">Other</font></p></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">(3,963</font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2">)</font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">(3,853</font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2">)</font></td></tr> <tr style="padding:0; FONT-SIZE: 1.5pt;" valign="top"> <td style="FONT-FAMILY: times;" valign="bottom"> </td> <td style="FONT-FAMILY: times;" valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times;" valign="bottom" colspan="2" align="right"> </td> <td style="FONT-FAMILY: times;" valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times;" valign="bottom" colspan="2" align="right"> </td> <td style="FONT-FAMILY: times;" valign="bottom"> </td></tr> <tr style="padding:0;" valign="top" bgcolor="#CCEEFF"> <td style="FONT-FAMILY: times;" valign="bottom"> <p style="TEXT-INDENT: -10pt; FONT-FAMILY: times; MARGIN-LEFT: 30pt;"><font size="2">Total deferred tax liabilities</font></p></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">(147,105</font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2">)</font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">(151,023</font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2">)</font></td></tr> <tr style="padding:0; FONT-SIZE: 1.5pt;" valign="top"> <td style="FONT-FAMILY: times;" valign="bottom"> </td> <td style="FONT-FAMILY: times;" valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times;" valign="bottom" colspan="2" align="right"> </td> <td style="FONT-FAMILY: times;" valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times;" valign="bottom" colspan="2" align="right"> </td> <td style="FONT-FAMILY: times;" valign="bottom"> </td></tr> <tr style="padding:0;" valign="top" bgcolor="white"> <td style="FONT-FAMILY: times;" valign="bottom"> <p style="TEXT-INDENT: -10pt; FONT-FAMILY: times; MARGIN-LEFT: 10pt;"><font size="2">Deferred tax liabilities, net</font></p></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">$</font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">(2,409</font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2">)</font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">$</font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">(1,310</font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2">)</font></td></tr> <tr style="padding:0; FONT-SIZE: 1.5pt;" valign="top"> <td style="FONT-FAMILY: times;" valign="bottom"> </td> <td style="FONT-FAMILY: times;" valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: times;" valign="bottom" colspan="2" align="right"> </td> <td style="FONT-FAMILY: times;" valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: times;" valign="bottom" colspan="2" align="right"> </td> <td style="FONT-FAMILY: times;" valign="bottom"> </td></tr></table></div> <!-- end of user-specified TAGGED TABLE --></div> <p style="TEXT-ALIGN: justify; FONT-FAMILY: times;"><font size="2"> Deferred tax assets and liabilities in the accompanying consolidated balance sheets are as follows (in thousands):</font></p> <div style="POSITION: relative; PADDING-BOTTOM: 0pt; PADDING-LEFT: 0pt; WIDTH: 70%; PADDING-RIGHT: 0pt; MARGIN-LEFT: 15%; PADDING-TOP: 0pt;"> <p style="TEXT-ALIGN: justify; FONT-FAMILY: times;"><font size="2"><!-- COMMAND=ADD_TABLEWIDTH,"100%" --></font></p> <!-- User-specified TAGGED TABLE --> <div align="center"> <table border="0" cellspacing="0" cellpadding="0" width="100%" style="text-align:left;"> <tr style="padding:0;"><!-- TABLE COLUMN WIDTHS SET --> <td style="FONT-FAMILY: times;" align="left"></td> <td style="FONT-FAMILY: times;" width="12"></td> <td style="FONT-FAMILY: times;" width="7" align="right"></td> <td style="FONT-FAMILY: times;" width="56"></td> <td style="FONT-FAMILY: times;" width="12"></td> <td style="FONT-FAMILY: times;" width="7" align="right"></td> <td style="FONT-FAMILY: times;" width="50"></td> <td style="FONT-FAMILY: times;" width="12"></td><!-- TABLE COLUMN WIDTHS END --></tr> <tr style="padding:0;" valign="bottom"> <th style="FONT-FAMILY: times;" align="left"><font size="2"> </font><br /></th> <th style="FONT-FAMILY: times;"><font size="1"> </font></th> <th style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times;" colspan="5" align="center"><font size="1"><b>Year Ended July 31,</b></font></th> <th style="FONT-FAMILY: times;"><font size="1"> </font></th></tr> <tr style="padding:0;" valign="bottom"> <th style="FONT-FAMILY: times;" align="left"><font size="1"> </font><br /></th> <th style="FONT-FAMILY: times;"><font size="1"> </font></th> <th style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times;" colspan="2" align="center"><font size="1"><b>2013</b></font></th> <th style="FONT-FAMILY: times;"><font size="1"> </font></th> <th style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times;" colspan="2" align="center"><font size="1"><b>2012</b></font></th> <th style="FONT-FAMILY: times;"><font size="1"> </font></th></tr> <tr style="padding:0;" valign="top" bgcolor="#CCEEFF"> <td style="FONT-FAMILY: times;" valign="bottom"> <p style="TEXT-INDENT: -10pt; FONT-FAMILY: times; MARGIN-LEFT: 10pt;"><font size="2">Other current assets</font></p></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">$</font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">3,495</font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">$</font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">4,150</font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td></tr> <tr style="padding:0;" valign="top" bgcolor="white"> <td style="FONT-FAMILY: times;" valign="bottom"> <p style="TEXT-INDENT: -10pt; FONT-FAMILY: times; MARGIN-LEFT: 10pt;"><font size="2">Deferred tax asset</font></p></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">107,110</font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">96,929</font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td></tr> <tr style="padding:0;" valign="top" bgcolor="#CCEEFF"> <td style="FONT-FAMILY: times;" valign="bottom"> <p style="TEXT-INDENT: -10pt; FONT-FAMILY: times; MARGIN-LEFT: 10pt;"><font size="2">Deferred tax liability</font></p></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">(107,016</font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2">)</font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">(96,662</font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2">)</font></td></tr> <tr style="padding:0;" valign="top" bgcolor="white"> <td style="FONT-FAMILY: times;" valign="bottom"> <p style="TEXT-INDENT: -10pt; FONT-FAMILY: times; MARGIN-LEFT: 10pt;"><font size="2">Other liabilities</font></p></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">(5,998</font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2">)</font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">(5,727</font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2">)</font></td></tr> <tr style="padding:0; FONT-SIZE: 1.5pt;" valign="top"> <td style="FONT-FAMILY: times;" valign="bottom"> </td> <td style="FONT-FAMILY: times;" valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times;" valign="bottom" colspan="2" align="right"> </td> <td style="FONT-FAMILY: times;" valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times;" valign="bottom" colspan="2" align="right"> </td> <td style="FONT-FAMILY: times;" valign="bottom"> </td></tr> <tr style="padding:0;" valign="top" bgcolor="#CCEEFF"> <td style="FONT-FAMILY: times;" valign="bottom"> <p style="TEXT-INDENT: -10pt; FONT-FAMILY: times; MARGIN-LEFT: 20pt;"><font size="2">Deferred tax liabilities, net</font></p></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">$</font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">(2,409</font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2">)</font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">$</font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">(1,310</font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2">)</font></td></tr> <tr style="padding:0; FONT-SIZE: 1.5pt;" valign="top"> <td style="FONT-FAMILY: times;" valign="bottom"> </td> <td style="FONT-FAMILY: times;" valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: times;" valign="bottom" colspan="2" align="right"> </td> <td style="FONT-FAMILY: times;" valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: times;" valign="bottom" colspan="2" align="right"> </td> <td style="FONT-FAMILY: times;" valign="bottom"> </td></tr></table></div> <!-- end of user-specified TAGGED TABLE --></div> <p style="TEXT-ALIGN: justify; FONT-FAMILY: times;"><font size="2"> We are required to assess the available positive and negative evidence to estimate if sufficient future income will be generated to utilize deferred tax assets. A significant piece of negative evidence that we consider is cumulative losses (generally defined as losses before income taxes) incurred over the most recent three-year period. Such evidence limits our ability to consider other subjective evidence such as our projections for future growth. As of July 31, 2013 and 2012, cumulative losses were incurred over the applicable three-year period.</font></p> <p style="TEXT-ALIGN: justify; FONT-FAMILY: times;"><font size="2"> Our valuation allowances totaled $92.1 million and $99.0 million as of July 31, 2013 and 2012, respectively. The valuation allowances were established due to the uncertainty of our ability to utilize certain federal, state and foreign net operating loss carryforwards in the future. The amount of the deferred tax asset considered realizable could be adjusted if negative evidence, such as three-year cumulative losses, no longer exists and additional consideration is given to our growth projections.</font></p> <p style="TEXT-ALIGN: justify; FONT-FAMILY: times;"><font size="2"> Deferred tax assets associated with foreign tax credits totaled $14.0 million and $12.6 million as of July 31, 2013 and 2012, respectively. The net operating loss carryforwards, including foreign tax credits, expire from fiscal year 2014 to fiscal year 2033. These carryforwards may be subject to limitations under Section 382 of the Internal Revenue Code if significant ownership changes occur in the future.</font></p> <p style="TEXT-ALIGN: justify; FONT-FAMILY: times;"><font size="2"> In fiscal year 2011, we recorded income tax benefits totaling $4.6 million related to tax refunds associated with net operating loss carrybacks pursuant to the Worker, Homeownership and Business Assistance Act of 2009 (the "Business Assistance Act"). The Business Assistance Act was enacted in November 2009 and includes provisions that extend the time period in which net operating loss carrybacks can be utilized from two to five years, with certain limitations.</font></p> <p style="TEXT-ALIGN: justify; FONT-FAMILY: times;"><font size="2"> Income tax refunds, net of taxes paid, during fiscal years 2013, 2012 and 2011 totaled $2.2 million, $0.8 million and $1.0 million, respectively.</font></p> <ul> <li style="list-style: none;"> <p style="TEXT-ALIGN: justify; FONT-FAMILY: times;"><font size="2"><b><i>Uncertain Tax Positions</i></b></font></p></li></ul> <p style="TEXT-ALIGN: justify; FONT-FAMILY: times;"><font size="2"> We operate in a number of tax jurisdictions and are subject to examination of our income tax returns by tax authorities in those jurisdictions who may challenge any item on these returns. Because the tax matters challenged by tax authorities are typically complex, the ultimate outcome of these challenges is uncertain. In accordance with ASC 740,</font> <font size="2"><i>Income Taxes</i></font><font size="2">, we recognize the benefits of uncertain tax positions in our financial statements only after determining that it is more likely than not that the uncertain tax positions will be sustained.</font></p> <p style="TEXT-ALIGN: justify; FONT-FAMILY: times;"><font size="2"> The total amount of unrecognized tax benefits as of July 31, 2013 was $3.5 million, of which $2.5 million would favorably impact the effective tax rate if resolved in our favor. Over the next twelve months, management does not anticipate that the amount of unrecognized tax benefits will be materially reduced due to our tax position being sustained upon audit or as a result of the expiration of the statute of limitations for specific jurisdictions.</font></p> <p style="TEXT-ALIGN: justify; FONT-FAMILY: times;"><font size="2"> A reconciliation of the fiscal year 2013 beginning and ending balance of unrecognized tax benefits is as follows (in thousands):</font></p> <div style="POSITION: relative; PADDING-BOTTOM: 0pt; PADDING-LEFT: 0pt; WIDTH: 70%; PADDING-RIGHT: 0pt; MARGIN-LEFT: 15%; PADDING-TOP: 0pt;"> <p style="TEXT-ALIGN: justify; FONT-FAMILY: times;"><font size="2"><!-- COMMAND=ADD_TABLEWIDTH,"100%" --></font></p> <!-- User-specified TAGGED TABLE --> <div align="center"> <table border="0" cellspacing="0" cellpadding="0" width="100%" style="text-align:left;"> <tr style="padding:0;"><!-- TABLE COLUMN WIDTHS SET --> <td style="FONT-FAMILY: times;" align="left"></td> <td style="FONT-FAMILY: times;" width="12"></td> <td style="FONT-FAMILY: times;" width="7" align="right"></td> <td style="FONT-FAMILY: times;" width="64"></td> <td style="FONT-FAMILY: times;" width="12"></td><!-- TABLE COLUMN WIDTHS END --></tr> <tr style="padding:0;" valign="bottom"> <th style="FONT-FAMILY: times;" align="left"><font size="2"> </font><br /></th> <th style="FONT-FAMILY: times;"><font size="1"> </font></th> <th style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times;" colspan="2" align="center"><font size="1"><b>Unrecognized<br /> Tax Benefits</b></font></th> <th style="FONT-FAMILY: times;"><font size="1"> </font></th></tr> <tr style="padding:0;" valign="top" bgcolor="#CCEEFF"> <td style="FONT-FAMILY: times;" valign="bottom"> <p style="TEXT-INDENT: -10pt; FONT-FAMILY: times; MARGIN-LEFT: 10pt;"><font size="2">Balance at July 31, 2012</font></p></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">$</font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">3,631</font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td></tr> <tr style="padding:0;" valign="top" bgcolor="white"> <td style="FONT-FAMILY: times;" valign="bottom"> <p style="TEXT-INDENT: -10pt; FONT-FAMILY: times; MARGIN-LEFT: 10pt;"><font size="2">Additions based on tax positions related to prior years</font></p></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">555</font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td></tr> <tr style="padding:0;" valign="top" bgcolor="#CCEEFF"> <td style="FONT-FAMILY: times;" valign="bottom"> <p style="TEXT-INDENT: -10pt; FONT-FAMILY: times; MARGIN-LEFT: 10pt;"><font size="2">Settlements with tax authorities</font></p></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">(341</font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2">)</font></td></tr> <tr style="padding:0;" valign="top" bgcolor="white"> <td style="FONT-FAMILY: times;" valign="bottom"> <p style="TEXT-INDENT: -10pt; FONT-FAMILY: times; MARGIN-LEFT: 10pt;"><font size="2">Expiration of statute of limitations</font></p></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">(331</font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2">)</font></td></tr> <tr style="padding:0; FONT-SIZE: 1.5pt;" valign="top"> <td style="FONT-FAMILY: times;" valign="bottom"> </td> <td style="FONT-FAMILY: times;" valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times;" valign="bottom" colspan="2" align="right"> </td> <td style="FONT-FAMILY: times;" valign="bottom"> </td></tr> <tr style="padding:0;" valign="top" bgcolor="#CCEEFF"> <td style="FONT-FAMILY: times;" valign="bottom"> <p style="TEXT-INDENT: -10pt; FONT-FAMILY: times; MARGIN-LEFT: 10pt;"><font size="2">Balance at July 31, 2013</font></p></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">$</font></td> <td style="FONT-FAMILY: times;" valign="bottom" align="right"><font size="2">3,514</font></td> <td style="FONT-FAMILY: times;" valign="bottom"><font size="2"> </font></td></tr> <tr style="padding:0; FONT-SIZE: 1.5pt;" valign="top"> <td style="FONT-FAMILY: times;" valign="bottom"> </td> <td style="FONT-FAMILY: times;" valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 2.25pt double; 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We had $1.5 million, $1.9 million and $2.6 million of interest and penalties accrued at July 31, 2013, 2012 and 2011, respectively. There was no material interest expense in fiscal years 2013, 2012 and 2011.</font></p> </div> </NonNumbericText> |
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