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Income Taxes | 3 Months Ended
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Nov. 30, 2018
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Act. The Tax Act reduced the corporate tax rate, limited or eliminated certain tax deductions, and changed the taxation of foreign earnings of U.S. multinational companies. The enacted changes include a mandatory income inclusion of the historically untaxed foreign earnings of a U.S. company’s foreign subsidiaries and will effectively tax such income at reduced tax rates (“transition tax”). During fiscal year 2018, the Company made reasonable estimates related to certain impacts of the Tax Act and, in accordance with SAB 118, recorded a net provisional income tax expense of $142.3 million for the fiscal year ended August 31, 2018. This net provisional expense was mainly comprised of $65.9 million related to the one-time transition tax inclusive of unrecognized tax benefits, $(10.5) million related to the re-measurement of the Company’s U.S. deferred tax attributes, and $85.0 million related to the foreign tax impact of a change in indefinite reinvestment assertion on certain earnings from the Company’s foreign subsidiaries. During the first quarter of 2019, the Company recorded an income tax benefit of $13.3 million, inclusive of unrecognized tax benefits, associated with the Tax Act. The income tax benefit was mainly related to the one-time transition tax to adjust the amount previously recorded during the fiscal year ended August 31, 2018. The adjustment to the one-time transition tax for the three months ended November 30, 2018 was primarily related to further analysis of the Company’s utilization of foreign tax credits and applicable limitations. The calculation of the one-time transition tax is based upon estimates of post-1986 earnings and profits, applicable foreign tax credits and relevant limitations, utilization of U.S. federal net operating losses and tax credits and the amount of foreign earnings held in cash and non-cash assets. As of November 30, 2018, the Company believes $129.0 million is a reasonable net estimate of income tax expense related to the Tax Act based on the analysis, interpretations and guidance available at this time. In addition to the adjustment recorded during the first quarter of fiscal year 2019, the Company has elected to record the Global Intangible Low-Taxed Income effects as a period cost. As a result of the one-time transition tax, the Company will have a substantial amount of previously taxed earnings that can be distributed to the U.S. without additional U.S. taxation. Additionally, the Tax Act provides for a 100% dividends received deduction for dividends received by U.S. corporations from 10-percent or more owned foreign corporations. During the fiscal year ended August 31, 2018, the Company recorded liabilities of $85.0 million from a change in the indefinite reinvestment assertion on certain earnings from its foreign subsidiaries, primarily associated with foreign withholding taxes that would be incurred upon such future remittances of cash. The Company intends to indefinitely reinvest the remaining earnings from the Company’s foreign subsidiaries for which a deferred tax liability has not already been recorded. The accumulated earnings are the most significant component of the basis differences which are indefinitely reinvested. The Company has substantially completed its accounting for the following Tax Act provisions: post-1986 earnings and profits calculations, utilization of U.S. federal net operating losses and tax credits, the amount of foreign earnings held in cash and non-cash assets, the re-measurement of the Company’s deferred tax balances, and the impact of the Tax Act to the existing valuation allowance assessments from both a federal and state tax perspective. As the Company finalizes the accounting for the utilization of foreign tax credits and applicable limitations, the Company will reflect any adjustments to the amounts previously recorded in the period such adjustments are identified. At this time, the Company does not anticipate a material change to the net estimate recorded as of November 30, 2018 related to the Tax Act. Changes could be driven in part by additional regulatory guidance that may be issued or changes in interpretations and assumptions related to existing guidance. The effective tax rate differed from the U.S. federal statutory rate of 21.0% during the three months ended November 30, 2018 primarily due to: (i) losses in tax jurisdictions with existing valuation allowances; (ii) tax incentives granted to sites in Brazil, China, Malaysia, Singapore and Vietnam; and (iii) adjustments to amounts previously recorded for the Tax Act. The effective tax rate differed from the U.S. federal statutory rate of 35.0% during the three months ended November 30, 2017 primarily due to: (i) income in tax jurisdictions with lower statutory tax rates than the U.S.; (ii) tax incentives granted to sites in Brazil, China, Malaysia, Singapore and Vietnam; and (iii) losses in tax jurisdictions with existing valuation allowances, including losses from stock based compensation.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
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