XML 34 R22.htm IDEA: XBRL DOCUMENT
v3.19.2

Income Taxes | 9 Months Ended
--- | ---
May 31, 2019
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes Tax Act 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”). 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 made reasonable estimates related to certain impacts of the Tax Act and, in accordance with SAB 118, recorded a net provisional income tax expense (benefit). In the second quarter of fiscal year 2019, the Company completed its accounting for the effects of the Tax Act under SAB 118 based on the analysis, interpretations and guidance available at that time. There may be future adjustments based on changes in interpretations, legislative updates or final regulations under the Tax Act, changes in accounting standards for income taxes, or changes in estimates the Company utilized to calculate the transitional impact. During the first quarter of fiscal year 2019, the Company elected to record the Global Intangible Low-Taxed Income effects as a period cost. The following table summarizes the tax expense (benefit) related to the Tax Act recognized during the SAB 118 measurement period (in millions):
| One-time transition tax, inclusive of unrecognized tax benefits (1) |  | Re-measurement of the Company's U.S. deferred tax attributes |  | Change in indefinite reinvestment assertion (2) |  | Other |  | Income tax expense (benefit)
Provisional income tax expense (benefit) - recognized in fiscal year 2018 | $ | 65.9 |  |  | $ | (10.5 | ) |  | $ | 85.0 |  |  | $ | 1.9 |  |  | $ | 142.3 |
Income tax expense (benefit) adjustment - recognized in fiscal year 2019 | $ | (14.9 | ) |  | $ | 1.6 |  |  | $ | — |  |  | $ | — |  |  | $ | (13.3 | )
Income tax expense (benefit) related to the Tax Act through November 30, 2018 | $ | 51.0 |  |  | $ | (8.9 | ) |  | $ | 85.0 |  |  | $ | 1.9 |  |  | $ | 129.0 |
(1) | 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. The adjustment during the first quarter of fiscal year 2019 was primarily related to further analysis of the Company’s utilization of foreign tax credits and applicable limitations. No other material adjustments were made to the net provisional income tax expense recognized in fiscal year 2018 related to the Tax Act under SAB 118.
(2) | The liability recorded for a change in the indefinite reinvestment assertion on certain earnings from the Company's foreign subsidiaries is 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.
Effective Income Tax Rate The U.S. federal statutory income tax rate and the Company's effective income tax rate are as follows:
| Three months ended |  | Nine months ended
| May 31, 2019 |  | May 31, 2018 |  | May 31, 2019 |  | May 31, 2018
U.S. federal statutory income tax rate | 21.0 | % |  | 25.7 | % |  | 21.0 | % |  | 25.7 | %
Effective income tax rate | 47.0 | % |  | 40.0 | % |  | 32.4 | % |  | 45.6 | %
The effective tax rate during the three months and nine months ended May 31, 2019, differed from the U.S. federal statutory rate primarily due to: (i) losses in tax jurisdictions with existing valuation allowances; and (ii) tax incentives granted to sites in Brazil, China, Malaysia, Singapore and Vietnam. In addition, the nine months ended May 31, 2019 included adjustments to amounts previously recorded for the Tax Act. The effective tax rate differed from the blended U.S. federal statutory rate during the nine months ended May 31, 2018 primarily due to the Tax Act, including the one-time mandatory deemed repatriation tax and the re-measurement of the Company’s U.S. deferred tax attributes of $30.9 million, partially offset by a reduction in unrecognized tax benefits of $16.1 million for the lapse of statute in a non-U.S. jurisdiction. Other primary drivers for the difference between the effective tax rate and the blended U.S. federal statutory rate during the three months and nine months ended May 31, 2018 are: (i) tax incentives granted to sites in Brazil, China, Malaysia, Singapore and Vietnam; and (ii) losses in tax jurisdictions with existing valuation allowances, including losses from stock-based compensation for the nine months ended May 31, 2018.

X
- References No definition available. + Details
Name: | us-gaap_IncomeTaxDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- 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
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration