Income Taxes (Tables)

12 Months Ended

Aug. 31, 2013

Income Tax Disclosure [Abstract]

Income Tax Expense from Continuing Operations

Income tax expense from continuing operations is summarized as follows (in thousands):

	Year ended August 31,
	2013			2012			2011
Currently payable:
Federal	$	24,809		$	22,078		$	(78	)
Foreign	13,335			10,396			20,903
State	902			1,534			586
	39,046			34,008			21,411
Deferred:
Federal	(13,514		)	(495		)	14,948
Foreign	(9,942		)	(4,598		)	(4,223		)
State	(218		)	439			(4,303		)
	(23,674		)	(4,654		)	6,422
	$	15,372		$	29,354		$	27,833

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,
	2013		2012		2011
Federal statutory rate	35.0	%	35.0	%	35.0	%
State income taxes, net of Federal effect	0.9		1.2		0.4
Net effect of foreign tax rates and credits	(8.8	)	(14.6	)	(14.0	)
NOL utilization and changes in valuation allowance	(3.1	)	0.1		(3.0	)
Tax contingency reserve	(5.6	)	(2.2	)	(1.6	)
Prior period correction (1)	(6.5	)	—		—
Other items	(2.5	)	(0.5	)	3.4
Effective income tax rate	9.4	%	19.0	%	20.2	%

(1) During the fourth quarter of fiscal 2013, the Company recorded a $10.6 million adjustment to properly state deferred income tax balances associated with its equity compensation programs. The correction is not material to current or previously issued financial statements.

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,
	2013			2012
Deferred income tax assets:
Operating loss and tax credit carryforwards	$	35,071		$	16,393
Compensation related liabilities	20,812			9,909
Postretirement benefits	7,731			10,679
Inventory reserves	7,049			8,045
Book reserves and other items	11,523			12,781
Total deferred income tax assets	82,186			57,807
Valuation allowance	(22,777		)	(8,153		)
Net deferred income tax assets	59,409			49,654
Deferred income tax liabilities:
Depreciation and amortization	(129,498		)	(156,751		)
Other items	(1,985		)	(2,098		)
Deferred income tax liabilities	(131,483		)	(158,849		)
Net deferred income tax liability	$	(72,074	)	$	(109,195	)

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):

	2013			2012			2011
Beginning balance	$	24,608		$	26,179		$	28,225
Increase for tax positions taken in a prior period	3,601			3,400			4,026
Decrease for tax positions taken in a prior period	(7,622		)	(4,579		)	(6,072		)
Decrease due to settlements	(2,581		)	(392		)	—
Ending balance	$	18,006		$	24,608		$	26,179

Earnings before Income Taxes, Including both Continuing and Discontinued Operations

Earnings before income taxes, for continuing operations, are summarized as follows (in thousands):

	Year Ended August 31,
	2013		2012		2011
Domestic	$	67,392	$	65,685	$	47,445
Foreign	95,557		88,945		90,576
	$	162,949	$	154,630	$	138,021