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Income Taxes
6 Months Ended
Feb. 29, 2012
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 23.0% and 23.1% for the three and six months ended February 29, 2012, respectively, and 21.8% and 21.1% for the comparable prior year periods. The effective tax rate for the three and six months ended February 29, 2012 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 $28.6 million at February 29, 2012. Substantially all of these unrecognized tax benefits, if recognized, would reduce the effective income tax rate. In addition, as of August 31, 2011 and February 29, 2012, the Company had liabilities totaling $5.1 million and $5.9 million, respectively, for estimated interest and penalties related to its unrecognized tax benefits.