Income Taxes

9 Months Ended

May 31, 2022

Income Tax Disclosure [Abstract]

Income Taxes

Note 4 – Income Taxes

The Company recorded income tax expense of $10.5 million and $3.4 million for the three months ended May 31, 2022 and 2021, respectively, and recorded income tax expense of $16.7 million and $5.8 million for the nine months ended May 31, 2022 and 2021, respectively.

It is the Company’s policy to report income tax expense for interim periods using an estimated annual effective income tax rate. The estimated annual effective income tax rate was 28.2 percent and 21.4 percent for the nine months ended May 31, 2022 and 2021, respectively. The increase in the estimated annual effective income tax rate from May 2021 to May 2022 relates primarily to the change in earnings mix among foreign operations.

The tax effects of significant or unusual items are not considered in the estimated annual effective income tax rate. The tax effects of such discrete events are recognized in the interim period in which the events occur. The Company recorded discrete items resulting in an income tax benefit of $1.4 million and $3.3 million for the nine months ended May 31, 2022 and 2021, respectively. The discrete items recorded in the nine months ended May 31, 2022 include a benefit of $0.7 million related to the vesting of share-based compensation awards, and the discrete items recorded in the nine months ended May 31, 2021 include a benefit of $1.7 million related to the release of a valuation allowance related to net operating loss carryforwards in a foreign jurisdiction.