|
Income Taxes
|
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Feb. 28, 2015
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 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. Comparative effective income tax rates from continuing operations are as follows:
The income tax benefit on the second quarter fiscal 2015 impairment charge was only $1.7 million, the result of the majority of the $84.4 million impairment charge not being deductible for income tax purposes. Excluding the impairment charge, the effective income tax rate was 17.2% and 21.3% for the three and six months ended February 28, 2015, respectively. The income tax provision for the current and prior year periods reflects the benefits of tax minimization planning, taxable earnings derived in foreign jurisdictions with tax rates that are lower than the U.S. Federal statutory rate and foreign tax credits. Income tax expense for the six months ended February 28, 2015 reflects the benefit from the reinstatement of the U.S. Federal research and development tax credit and an increased benefit from the utilization of foreign tax credits, while the prior year included a $7.3 million discrete income tax benefit (net operating losses generated through the liquidation of a foreign entity).
The gross liability for unrecognized income tax benefits, excluding interest and penalties, increased to $33.2 million at February 28, 2015 from $32.3 million at August 31, 2014. Substantially all of these unrecognized tax benefits, if recognized, would reduce the effective income tax rate. In addition, at February 28, 2015 and August 31, 2014, the Company had liabilities totaling $2.3 million and $2.0 million, respectively, for the payment of interest and penalties related to unrecognized income tax benefits.
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||