Income Taxes |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Nov. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 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 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's global operations, acquisition activity and specific tax attributes provide opportunities for continuous global tax planning initiatives to maximize tax credits and deductions. Both the current and prior periods include the benefits of tax planning initiatives. Comparative pre-tax earnings, income tax expense (benefit) and effective income tax rates are as follows (amounts in thousands):
Both the current and prior year income tax rates were impacted by the proportion of earnings in foreign jurisdictions (with income tax rates lower than the US federal income tax rate) and the amount of tax benefits derived from tax planning initiatives. Our earnings before income taxes consisted of 80% of earnings from foreign jurisdictions in fiscal 2017, compared to 75% in fiscal 2016, which had the impact of reducing the current year effective income tax rate.
The income tax benefit for the three months ended November 30, 2016 is the result of current year tax planning initiatives (which yield an effective income tax rate significantly lower than the federal income tax rate) and a $2.9 million tax benefit related to the discrete director and officer transition costs described in Note 2, "Director & Officer Transition Charges." These items, when combined with reduced earnings before income taxes, result in an effective tax rate of (152.4)%. Comparatively, the income tax expense for the three months ended November 30, 2015 was the net result of prior year tax planning initiatives (which yielded an effective income tax rate lower than the federal income tax rate) and higher earnings overall, but less earnings from foreign jurisdictions than fiscal 2017.
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||