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Income Taxes
3 Months Ended
Nov. 30, 2011
Income Taxes [Abstract]  
Income Taxes

Note 10. 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 our 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 was 23.1% and 20.6% for the three months ended November 30, 2011 and 2010, respectively. The effective tax rate for the three months ended November 30, 2011 is lower than the Federal statutory rate due to benefits from foreign tax credits, taxable earnings in foreign jurisdictions (with statutory tax rates lower than the U.S. statutory tax rate) and the utilization of net operating losses.

The gross liability for unrecognized tax benefits, excluding interest and penalties, increased from $26.2 million at August 31, 2011 to $27.2 million at November 30, 2011. Substantially all of these unrecognized tax benefits, if recognized, would reduce the effective income tax rate. In addition, as of November 30, 2011 and August 31, 2011, the Company had liabilities totaling $5.3 million and $5.1 million, respectively, for the payment of interest and penalties related to its unrecognized tax benefits.