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Income Taxes
 12 Months Ended
Aug. 31, 2025
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
We account for income taxes using the asset and liability approach as prescribed by ASC Topic 740, Income Taxes (“ASC 740”). This approach requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Using the enacted tax rates in effect for the year in which the differences are expected to reverse, deferred tax liabilities and assets are determined based on the differences between the financial reporting and the tax basis of an asset or liability.
The Organization for Economic Co-operation and Development (“OECD”) released the Global Anti-base Erosion (“GloBE”) Model Rules for Pillar Two on December 20, 2021, which defined a 15% global minimum tax. Since the model rules have been released, many countries have enacted or continue to consider changes in their tax laws and regulations based on the Pillar Two proposals, of which some are effective for us in fiscal 2025. We are continuing to evaluate the impact of these proposed and enacted legislative changes as new guidance becomes available. Pillar Two as currently enacted did not have a material impact on our financial statements as most jurisdictions in which we operate have an effective tax rate above the 15% threshold.
On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted into law, introducing significant changes to corporate income tax rates and deductions. For fiscal year 2025, OBBA did not have a material impact on our financial statements. We continue to evaluate the future impact of the OBBBA for those provisions that are effective after fiscal year 2025.
The provision for income taxes consists of the following components during the periods presented (in millions):
 Year Ended August 31,
 202520242023
Provision for current federal taxes$103.2 $113.6 $105.8 
Provision for current state taxes23.8 26.6 15.7 
Provision for current foreign taxes21.6 19.4 27.0 
Benefit from deferred taxes(45.0)(33.6)(47.8)
Total provision for income taxes$103.6 $126.0 $100.7 
The following table presents income before income taxes for our domestic and foreign operations for the periods presented (in millions):
 Year Ended August 31,
 202520242023
Domestic$414.8 $472.4 $367.5 
International85.4 76.2 79.2 
Income before income taxes$500.2 $548.6 $446.7 
The following table reconciles the provision at the federal statutory rate to the total provision for income taxes during the periods presented (in millions):
 Year Ended August 31,
 202520242023
Federal income tax computed at statutory rate$105.0 $115.2 $93.8 
State income tax, net of federal income tax benefit14.8 19.7 11.4 
Federal permanent differences(2.2)2.1 2.2 
Foreign permanent differences and rate differential4.2 2.3 4.4 
Research and development tax credits(13.7)(10.1)(8.3)
Unrecognized tax benefits(4.8)2.0 1.9 
Other, net0.3 (5.2)(4.7)
Total provision for income taxes$103.6 $126.0 $100.7 
Components of the net deferred income tax liabilities as of the dates presented include (in millions):
 August 31,
 20252024
Deferred income tax liabilities:  
Depreciation$(24.7)$(21.8)
Goodwill and intangibles(155.1)(150.2)
Operating lease right of use assets(24.0)(15.8)
Other liabilities(3.2)(1.8)
Total deferred income tax liabilities(207.0)(189.6)
Deferred income tax assets:  
Self-insurance1.8 2.1 
Pension7.1 6.7 
Deferred compensation25.1 24.5 
Net operating losses6.8 7.1 
Other accruals not yet deductible37.0 43.3 
Operating lease liabilities26.4 18.5 
Capitalized research and development98.1 70.1 
Other assets22.7 14.0 
Total deferred income tax assets225.0 186.3 
Valuation allowance(19.5)(20.4)
Net deferred income tax liabilities$(1.5)$(23.7)
As of August 31, 2025, the estimated undistributed earnings from foreign subsidiaries was $365.4 million. We have recorded a deferred income tax liability of $0.4 million for certain foreign withholding taxes and U.S. taxes related to foreign earnings for which we do not assert indefinite reinvestment. With respect to unremitted earnings and original investments in foreign subsidiaries where we are continuing to assert indefinite reinvestment, any future remittances could be subject to additional foreign withholding taxes, U.S. state taxes, and certain tax impacts relating to foreign currency exchange effects. It is not practicable to estimate the amount of any unrecognized tax effects on these reinvested earnings and original investments in foreign subsidiaries. We account for the tax on Global Intangible Low-Taxed Income (“GILTI”) as a period cost and, therefore, do not record deferred taxes related to GILTI on our foreign subsidiaries.
At August 31, 2025, we had federal tax credit carryforwards of approximately $11.2 million that begin to expire in 2029, and state tax credit carryforwards of approximately $0.5 million that begin to expire in 2027. Approximately $11.2 million in federal tax credit carryforwards are subject to a full valuation allowance as we do not expect to realize any future tax benefit. At August 31, 2025, we had federal net operating loss carryforwards of $9.1 million that begin to expire in 2029, state net operating loss carryforwards of $27.4 million that begin to expire in 2026, and foreign net operating loss carryforwards of $15.2 million that begin to expire in 2028.
The gross amount of unrecognized tax benefits as of August 31, 2025 and 2024 totaled $18.5 million and $21.1 million, respectively. The amount of unrecognized tax benefits that would affect the Company's effective income tax rate was $18.5 million and $21.1 million as of August 31, 2025 and 2024, respectively. We recognize potential interest and penalties related to unrecognized tax benefits as a component of income tax expense; such accrued interest and penalties are not material. With few exceptions, we are no longer subject to United States federal, state, and local income tax examinations for years ended before 2022 or for foreign income tax examinations before 2017. We anticipate that unrecognized tax benefits may decrease within the next 12 months by $5.6 million, of which $1.3 million is interest, due to the expiring of the statute of limitations.
The following table reconciles the change in the unrecognized income tax benefit (reported in Other long-term liabilities on the Consolidated Balance Sheets) during the periods presented (in millions):
Year Ended August 31,
202520242023
Unrecognized tax benefits balance at beginning of year$21.1 $20.1 $19.5 
Additions based on tax positions related to the current year5.8 4.2 4.3 
Additions for tax positions of prior years— — 1.4 
Reductions for tax positions of prior years(0.1)(0.1)(1.7)
Reductions due to settlements— — (0.5)
Reductions due to lapse of statute of limitations(8.3)(3.1)(2.9)
Unrecognized tax benefits balance at end of year$18.5 $21.1 $20.1 
Total accrued interest was $2.4 million, $4.6 million, and $3.3 million as of August 31, 2025, 2024, and 2023, respectively. Income tax penalties of $0.8 million were accrued during fiscal 2025. Interest, net of tax benefits, and penalties are included in Income tax expense within the Consolidated Statements of Comprehensive Income. We are routinely under audit from various tax jurisdictions. We do not currently anticipate material audit assessments.