Income Taxes (Tables)
|
12 Months Ended |
Aug. 31, 2016 |
|---|
| Income Tax Disclosure [Abstract] |
|
| Income Tax Expense from Continuing Operations |
Income tax expense (benefit) from continuing operations is summarized as follows (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended August 31, |
|
2016 |
|
2015 |
|
2014 |
Current: |
|
|
|
|
|
Federal |
$ |
2,205 |
|
|
$ |
(126 |
) |
|
$ |
23,211 |
|
Foreign |
11,838 |
|
|
21,200 |
|
|
9,059 |
|
State |
912 |
|
|
(1,616 |
) |
|
(657 |
) |
|
14,955 |
|
|
19,458 |
|
|
31,613 |
|
Deferred: |
|
|
|
|
|
Federal |
(12,470 |
) |
|
(4,416 |
) |
|
4,224 |
|
Foreign |
(23,797 |
) |
|
(9,199 |
) |
|
(4,130 |
) |
State |
(3,858 |
) |
|
(324 |
) |
|
866 |
|
|
(40,125 |
) |
|
(13,939 |
) |
|
960 |
|
Income tax expense (benefit) |
$ |
(25,170 |
) |
|
$ |
5,519 |
|
|
$ |
32,573 |
|
|
| Reconciliation of Income Taxes at Federal Statutory Rate to Effective Tax Rate |
A reconciliation of income taxes at the federal statutory rate to the effective tax rate is summarized in the following table:
|
|
|
|
|
|
|
|
|
|
|
Year Ended August 31, |
|
2016 |
|
2015 |
|
2014 |
Federal statutory rate |
35.0 |
% |
|
35.0 |
% |
|
35.0 |
% |
State income taxes, net of Federal effect |
1.2 |
|
|
(0.2 |
) |
|
0.8 |
|
Net effects of foreign tax rate differential and credits (1)
|
1.6 |
|
|
(58.4 |
) |
|
(10.5 |
) |
Domestic manufacturing deduction |
0.3 |
|
|
(5.1 |
) |
|
(1.0 |
) |
Foreign branch currency losses |
4.9 |
|
|
— |
|
|
— |
|
Goodwill impairment (2)
|
(27.0 |
) |
|
78.6 |
|
|
— |
|
Valuation allowance additions and releases (3)
|
(0.7 |
) |
|
15.5 |
|
|
(8.0 |
) |
Changes in liability for unrecognized tax benefits (4)
|
(0.9 |
) |
|
(42.1 |
) |
|
3.2 |
|
Change in income tax accounting method, net |
— |
|
|
— |
|
|
(5.6 |
) |
Business divestitures |
3.9 |
|
|
— |
|
|
3.0 |
|
Other items |
1.0 |
|
|
(1.6 |
) |
|
1.8 |
|
Effective income tax rate |
19.3 |
% |
|
21.7 |
% |
|
18.7 |
% |
(1) During fiscal 2015, the Company generated $10.0 million of foreign tax credits, the result of a non-recurring non-permanent loan from a foreign subsidiary (which were utilized to reduce fiscal 2015 tax obligations) and had a higher proportion of non-U.S. earnings.
(2) Fiscal 2016 and fiscal 2015 net earnings include a $186.5 million and $84.4 million, respectively, impairment of goodwill and intangible assets, of which $68.0 million and $6.3 million, respectively, are deductible for income tax purposes.
(3) Additional valuation allowances of $5.7 million were established in fiscal 2015 due to uncertainty regarding utilization of foreign operating loss carryforwards, which were partially offset by the reversal of $2.3 million of previously established reserves.
(4) The liability for unrecognized tax benefits decreased $9.5 million in fiscal 2015 primarily due to settlements and lapsing of tax audit statutes.
|
| Temporary Differences and Carryforwards of Deferred Tax Assets and Liabilities |
Temporary differences and carryforwards that gave rise to deferred tax assets and liabilities include the following items (in thousands):
|
|
|
|
|
|
|
|
|
|
August 31, |
|
2016 |
|
2015 |
Deferred income tax assets: |
|
|
|
Operating loss and tax credit carryforwards |
$ |
36,761 |
|
|
$ |
19,419 |
|
Compensation related liabilities |
25,086 |
|
|
27,047 |
|
Postretirement benefits |
8,727 |
|
|
6,778 |
|
Inventory |
3,044 |
|
|
3,253 |
|
Book reserves and other items |
8,317 |
|
|
11,976 |
|
Total deferred income tax assets |
81,935 |
|
|
68,473 |
|
Valuation allowance |
(8,147 |
) |
|
(8,053 |
) |
Net deferred income tax assets |
73,788 |
|
|
60,420 |
|
Deferred income tax liabilities: |
|
|
|
Depreciation and amortization |
(83,020 |
) |
|
(110,763 |
) |
Other items |
(5,493 |
) |
|
(4,539 |
) |
Deferred income tax liabilities |
(88,513 |
) |
|
(115,302 |
) |
Net deferred income tax liability |
$ |
(14,725 |
) |
|
$ |
(54,882 |
) |
|
| Changes in Gross Liability for Unrecognized Tax benefits, Excluding Interest and Penalties |
Changes in the Company’s gross liability for unrecognized tax benefits, excluding interest and penalties, are as follows (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2016 |
|
2015 |
|
2014 |
Beginning balance |
$ |
29,924 |
|
|
$ |
39,509 |
|
|
$ |
18,006 |
|
Increases based on tax positions related to the current year |
1,050 |
|
|
2,183 |
|
|
28,053 |
|
Increase for tax positions taken in a prior period |
475 |
|
|
8,935 |
|
|
— |
|
Decrease for tax positions taken in a prior period |
— |
|
|
(633 |
) |
|
— |
|
Decrease due to lapse of statute of limitations |
(1,027 |
) |
|
(4,464 |
) |
|
(7,030 |
) |
Decrease due to settlements |
— |
|
|
(14,180 |
) |
|
— |
|
Changes in foreign currency exchange rates |
(1,248 |
) |
|
(1,426 |
) |
|
480 |
|
Ending balance |
$ |
29,174 |
|
|
$ |
29,924 |
|
|
$ |
39,509 |
|
|
| Earnings before Income Taxes, Including both Continuing and Discontinued Operations |
Earnings (loss) before income taxes from continuing operations, are summarized as follows (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended August 31, |
|
2016 |
|
2015 |
|
2014 |
Domestic |
$ |
(19,182 |
) |
|
$ |
14,593 |
|
|
$ |
84,854 |
|
Foreign |
(111,162 |
) |
|
10,798 |
|
|
89,172 |
|
|
$ |
(130,344 |
) |
|
$ |
25,391 |
|
|
$ |
174,026 |
|
|