INCOME TAX (Tables)

12 Months Ended

Aug. 31, 2014

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

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



	Year Ended August 31,
(in thousands)	2014		2013			2012
United States	$	108,882	$	147,204		$	116,400
Foreign	35,929		(14,268		)	48,387
Total	$	144,811	$	132,936		$	164,787

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

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



	Year Ended August 31,
(in thousands)	2014			2013		2012
Current:
United States	$	11,798		$	849	$	1,560
Foreign	2,965			1,970		419
State and local	4,157			1,815		3,411
Current taxes	$	18,920		$	4,634	$	5,390
Deferred:
United States	$	30,427		$	45,908	$	(65,710	)
Foreign	4,457			4,980		7,130
State and local	(2,536		)	3,767		(1,419		)
Deferred taxes (benefit)	$	32,348		$	54,655	$	(59,999	)
Total income taxes (benefit) on income	$	51,268		$	59,289	$	(54,609	)
Income taxes (benefit) on discontinued operations	8,544			1,310		(8,847		)
Income taxes (benefit) on continuing operations	$	42,724		$	57,979	$	(45,762	)

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 income tax rate from continuing operations is as follows:



	Year Ended August 31,
(in thousands)	2014			2013			2012
Income tax expense (benefit) at statutory rate of 35%	$	50,684		$	46,528		$	57,675
State and local taxes	88			3,460			4,596
Section 199 manufacturing deduction	(1,199		)	—			—
Foreign rate differential	(5,940		)	(3,295		)	(9,909		)
Change in valuation allowance	22,079			14,264			10,033
Deferred compensation	(4,164		)	(2,890		)	(1,094		)
Nontaxable foreign interest	(16,506		)	(5,445		)	—
Disposition of foreign subsidiaries	—			6,292			(102,104		)
Australian reorganization	—			(7,245		)	—
Research and experimentation tax credits	—			—			(11,500		)
Other	(2,318		)	6,310			6,541
Income tax expense (benefit) on continuing operations	$	42,724		$	57,979		$	(45,762	)
Effective income tax rates from continuing operations	29.5		%	43.6		%	(27.8		)%

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

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



	August 31,
(in thousands)	2014			2013
Deferred tax assets:
Deferred compensation and employee benefits	$	51,956		$	56,504
Net operating losses and credits	68,736			99,200
Reserves and other accrued expenses	45,246			34,375
Allowance for doubtful accounts	3,760			5,020
Intangibles	6,707			8,153
Other	8,766			12,879
Total deferred tax assets	185,171			216,131
Valuation allowance for deferred tax assets	(69,762		)	(48,837		)
Deferred tax assets, net	$	115,409		$	167,294
Deferred tax liabilities:
Fixed assets	$	99,016		$	113,547
Inventory	8,320			10,219
Other	4,066			5,354
Total deferred tax liabilities	$	111,402		$	129,120
Deferred tax assets, net of deferred tax liabilities	$	4,007		$	38,174

Reconciliation of the beginning and ending amounts of unrecognized tax benefits

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



	August 31,
(in thousands)	2014			2013			2012
Balance at September 1	$	28,551		$	27,384		$	10,762
Change in tax positions of current year	—			1,255			—
Change for tax positions of prior years	(1,202		)	—			18,006
Reductions due to settlements with taxing authorities	—			(88		)	(600		)
Reductions due to statute of limitations lapse	—			—			(784		)
Balance at August 31	$	27,349		$	28,551		$	27,384

- 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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