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Income Tax (Tables)

12 Months Ended

Aug. 31, 2013

Components of earnings (loss) from continuing operations before income taxes (benefit)

The components of earnings (loss) from continuing operations before income taxes (benefit) are as follows:



	Year Ended August 31,
(in thousands)	2013			2012		2011
United States	$	147,204		$	116,400	$	(33,769	)
Foreign	(14,268		)	48,387		59,900
Total	$	132,936		$	164,787	$	26,131

Income taxes (benefit) included in the consolidated statements of operations

The income taxes (benefit) included in the consolidated statements of operations is as follows:



	Year Ended August 31,
(in thousands)	2013		2012			2011
Current:
United States	$	849	$	1,560		$	23,452
Foreign	1,970		419			352
State and local	1,815		3,411			5,226
Current taxes (benefit)	$	4,634	$	5,390		$	29,030
Deferred:
United States	$	45,908	$	(65,710	)	$	(28,048	)
Foreign	4,980		7,130			9,742
State and local	3,767		(1,419		)	5,616
Deferred taxes (benefit)	$	54,655	$	(59,999	)	$	(12,690	)
Total taxes (benefit) on income	$	59,289	$	(54,609	)	$	16,340
Taxes (benefit) on discontinued operations	1,310		(8,847		)	1,748
Taxes (benefit) on continuing operations	$	57,979	$	(45,762	)	$	14,592

Reconciliation of the federal statutory rate to effective tax rate from continuing operations

A reconciliation of the federal statutory rate to the Company's effective tax rate from continuing operations is as follows:



	Year Ended August 31,
	2013			2012			2011
Tax expense (benefit) at statutory rate of 35%	$	46,528		$	57,675		$	9,146
State and local taxes	3,460			4,596			6,958
Section 199 manufacturing deduction	—			—			(1,105		)
Foreign rate differential	(3,295		)	(9,909		)	(9,617		)
Change in valuation allowance	14,264			10,033			—
Liability for non-US earnings	—			—			8,848
Disposition of CMCS	6,292			(102,104		)	—
Australian reorganization	(7,245		)	—			—
Research and experimentation tax credits	—			(11,500		)	—
Other	(2,025		)	5,447			362
Tax expense (benefit) on continuing operations	$	57,979		$	(45,762	)	$	14,592
Effective tax rates from continuing operations	43.6		%	(27.8		)%	55.8		%

Tax effects of significant temporary differences giving rise to deferred tax assets and liabilities

The tax effects of significant temporary differences giving rise to deferred tax assets and liabilities are as follows:



	August 31,
(in thousands)	2013			2012
Deferred tax assets:
Deferred compensation and employee benefits	$	56,504		$	52,113
Net operating losses and credits	99,200			110,553
Reserves and other accrued expenses	34,375			41,516
Allowance for doubtful accounts	5,020			5,816
Inventory	—			1,881
Intangibles	8,153			9,668
Other	12,879			15,062
Total deferred tax assets	216,131			236,609
Valuation allowance for deferred tax assets	(48,837		)	(25,779		)
Deferred tax assets, net	$	167,294		$	210,830
Deferred tax liabilities:
Fixed assets	$	113,547		$	111,777
Inventory	10,219			—
Other	5,354			5,012
Total deferred tax liabilities	$	129,120		$	116,789
Deferred tax assets, net of deferred tax liabilities	$	38,174		$	94,041

Reconciliation of the beginning and ending amounts of unrecognized tax benefits

A reconciliation of the beginning and ending amounts of unrecognized tax benefits is as follows:



(in thousands)	2013			2012			2011
Balance at September 1	$	27,384		$	10,762		$	20,367
Change in tax positions of current year	1,255			—			2,440
Change for tax positions of prior years	—			18,006			(12,045		)
Reductions due to settlements with taxing authorities	(88		)	(600		)	—
Reductions due to statute of limitations lapse	—			(784		)	—
Balance at August 31	$	28,551		$	27,384		$	10,762

- Definition

Tabular disclosure of tax positions taken in the tax returns filed or to be filed for which it is more likely than not that the tax position will not be sustained upon examination by taxing authorities (i.e., uncertain tax positions) and other types of income tax contingencies, including: (1) the policy on classification of interest and penalties; (2) a tabular reconciliation of the total amounts of unrecognized tax benefits at the beginning and end of the period; the total amount(s) of: (3) unrecognized tax benefits that, if recognized, would affect the effective tax rate, and (4) interest and penalties recognized in each of the income statement and balance sheet; (5) for positions for which it is reasonably possible that the total amounts unrecognized will significantly change within 12 months of the reporting date the: (i) nature of the uncertainty, (ii) nature of the event that could occur that would cause the change, and (iii) an estimate of the range of the reasonably possible change or a statement that an estimate of the range cannot be made; and (6) a description of tax years that remain subject to examination by major tax jurisdictions.

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