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Income Taxes
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3 Months Ended |
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Nov. 30, 2013
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| Income Tax Disclosure [Abstract] | |
| Income Taxes |
Income Taxes
The Company's income tax expense is impacted by a number of factors, including the amount of taxable earnings derived in foreign jurisdictions with tax rates that are higher or lower than the U.S. Federal statutory rate, permanent items, state tax rates and the ability to utilize various tax credits and net operating loss carryforwards.
The Company adjusts the quarterly provision for income taxes based on the estimated annual effective income tax rate and facts and circumstances known at each interim reporting period. The effective income tax rate from continuing operations was 7.7% for the three months ended November 30, 2013, and 16.3% for the comparable prior year period. During the three months ended November 30, 2013 the Company liquidated a foreign entity which generated a $7.3 million discrete income tax benefit from the resulting net operating loss carryforwards. Similarly, the first quarter fiscal 2013 income tax provision included $5.5 million of discrete period income tax benefits, the result of changes to deferred income tax balances and the recognition of a net operating loss carryforward of $3.4 million.
The gross liability for unrecognized tax benefits, excluding interest and penalties, increased from $18.0 million at August 31, 2013 to $18.7 million at November 30, 2013. Substantially all of these unrecognized tax benefits, if recognized, would reduce the effective income tax rate. In addition, as of November 30, 2013 and August 31, 2013, the Company had liabilities totaling $3.1 million and $2.9 million, respectively, for the payment of interest and penalties related to its unrecognized income tax benefits.
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