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Income Taxes
 6 Months Ended
Feb. 28, 2015
Income Tax Disclosure [Abstract]  
Income Taxes
Income Taxes

The effective tax rate for the Company’s operations for each of the three and six months ended February 28, 2015 was a benefit of 4.7%, compared to an expense of 27.2% and 8.0%, respectively, for the three and six months ended February 28, 2014.

A reconciliation of the difference between the federal statutory rate and the Company’s effective rate is as follows:
 
Three Months Ended February 28,
 
Six Months Ended February 28,
 
2015(1)
 
2014
 
2015(1)
 
2014(1)
Federal statutory rate
35.0
 %
 
35.0
 %
 
35.0
 %
 
35.0
 %
State taxes, net of credits
1.1

 
0.5

 
1.1

 
5.5

Foreign income taxed at different rates
(7.4
)
 
1.7

 
(7.5
)
 
(18.2
)
Section 199 deduction
—

 
(1.9
)
 
—

 
0.3

Non-deductible officers’ compensation
(0.1
)
 
0.7

 
(0.1
)
 
(0.3
)
Noncontrolling interests
0.5

 
(2.3
)
 
0.5

 
1.1

Research and development credits
0.1

 
(0.3
)
 
0.1

 
0.3

Valuation allowance on deferred tax assets
(20.6
)
 
(8.5
)
 
(20.5
)
 
(29.3
)
Non-deductible goodwill
(2.8
)
 
—

 
(2.7
)
 
—

Unrecognized tax benefits
(0.5
)
 
1.4

 
(0.5
)
 
(2.0
)
Other
(0.6
)
 
0.9

 
(0.7
)
 
(0.4
)
Effective tax rate
4.7
 %
 
27.2
 %
 
4.7
 %
 
(8.0
)%

_____________________________
(1)
For periods with reported pre-tax losses, the effect of reconciling items with positive signs is tax benefit in excess of the benefit calculated by applying the federal statutory rate to the pre-tax loss.

The effective tax rate for the second quarter and first six months of fiscal 2015 was impacted primarily by the recognition of valuation allowances of $42 million on current period benefits in multiple taxing jurisdictions and the impact of the lower financial performance of foreign operations, which are taxed at more favorable rates. The deferred tax assets for which a valuation allowance was recorded were related primarily to deductible temporary differences created in the second quarter by the impairment charges to goodwill and other assets.
The Company recorded a valuation allowance on substantially all of its deferred tax assets as of February 28, 2015. The valuation allowance was recognized as a result of negative evidence, including recent losses, outweighing the more subjective positive evidence, indicating that it is more likely than not that the associated tax benefit will not be realized. Realization of deferred tax assets is dependent upon the Company generating a consistent trend of profitability to objectively forecast sufficient taxable income in multiple tax jurisdictions in future years to obtain benefit from the reversal of net deductible temporary differences and from utilization of net operating losses.
The effective tax rate for the first six months of fiscal 2014 was impacted primarily by the recognition of a full valuation allowance on the current period benefit associated with foreign operations losses and the impact of the lower financial performance of foreign operations, which are tax at more favorable rates. The effective tax rate for the second quarter of fiscal 2014 benefited primarily from the partial realization of previously reserved tax benefits in the foreign jurisdiction as a result of taxable income generated during the period.
The Company files federal and state income tax returns in the U.S. and foreign tax returns in Puerto Rico and Canada. For U.S. federal income tax returns, fiscal years 2011 to 2014 remain subject to examination. At this time, the Company is not under examination in any of its taxing jurisdictions.