Income Taxes

3 Months Ended

Nov. 30, 2012

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The effective tax rate for the Company’s operations for the three months ended November 30, 2012 and 2011 was (198.8)% and 31.5%, respectively.

A reconciliation of the difference between the federal statutory rate and the Company’s effective rate is as follows:

	Three Months Ended November 30,
	2012		2011
Federal statutory rate	35.0	%	35.0	%
State taxes, net of credits	7.1		1.3
Foreign income taxed at different rates	(1.0	)	(1.6	)
Section 199 deduction	4.6		(1.7	)
Non-deductible officers’ compensation	(1.1	)	0.7
Noncontrolling interests	48.5		(2.0	)
Research and development credits	21.7		—
Valuation allowance on deferred tax assets	(312.1	)	—
Other	(1.5	)	(0.2	)
Effective tax rate	(198.8	)%	31.5	%

In the first quarter of fiscal 2013, the Company recorded an expense of $2 million to recognize a valuation allowance on deferred tax assets of a foreign subsidiary as a result of negative evidence, including recent losses at the subsidiary, outweighing the more subjective positive evidence, thus indicating that it is more likely than not that the associated tax benefit will not be realized in the future.

The Company files federal and state income tax returns in the U.S. and foreign tax returns in Puerto Rico and Canada. The federal statute of limitations has expired for fiscal 2009 and prior years. The Canadian and several state tax authorities are currently examining returns for fiscal years 2005 to 2009.