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INCOME TAX (Tables) | 12 Months Ended
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Aug. 31, 2018
Income Tax Disclosure [Abstract] |
Components of earnings from continuing operations before income taxes (benefit) | The components of earnings from continuing operations before income taxes were as follows:
|  | Year Ended August 31,
(in thousands) |  | 2018 |  | 2017 |  | 2016
United States |  | $ | 86,731 |  |  | $ | 25,506 |  |  | $ | 55,829 |
Foreign |  | 78,653 |  |  | 39,945 |  |  | 20,148 |
Total |  | $ | 165,384 |  |  | $ | 65,451 |  |  | $ | 75,977 |
Income taxes (benefit) included in the consolidated statements of operations | The income taxes (benefit) included in the consolidated statements of earnings were as follows:
|  | Year Ended August 31,
(in thousands) |  | 2018 |  | 2017 |  | 2016
Current: |  |  |  |  |  |
United States |  | $ | 20,210 |  |  | $ | 11,345 |  |  | $ | 5,224 |
Foreign |  | 18,308 |  |  | 9,464 |  |  | 6,991 |
State and local |  | 2,263 |  |  | 2,654 |  |  | 4,130 |
Current taxes |  | $ | 40,781 |  |  | $ | 23,463 |  |  | $ | 16,345 |
Deferred: |  |  |  |  |  |
United States |  | $ | (11,501 | ) |  | $ | (13,548 | ) |  | $ | (4,423 | )
Foreign |  | (169 | ) |  | (917 | ) |  | 254 |
State and local |  | 1,002 |  |  | 281 |  |  | 303 |
Deferred taxes |  | $ | (10,668 | ) |  | $ | (14,184 | ) |  | $ | (3,866 | )
Total income taxes on income |  | $ | 30,113 |  |  | $ | 9,279 |  |  | $ | 12,479 |
Income taxes (benefit) on discontinued operations |  | (34 | ) |  | (5,997 | ) |  | (1,497 | )
Income taxes on continuing operations |  | $ | 30,147 |  |  | $ | 15,276 |  |  | $ | 13,976 |
Reconciliation of the federal statutory rate to effective tax rate from continuing operations | A reconciliation of the federal statutory rate to the Company's effective income tax rate from continuing operations, including material items impacting the effective income tax rate is as follows:
|  | Year Ended August 31,
(in thousands) |  | 2018 |  | 2017 |  | 2016
Federal statutory rate |  | 25.7 | % |  | 35.0 | % |  | 35.0 | %
Income tax expense at statutory rate |  | $ | 42,471 |  |  | $ | 22,908 |  |  | $ | 26,592 |
TCJA - Toll charge and related foreign tax credits |  | 29,466 |  |  | — |  |  | — |
TCJA - Remeasurement of deferred tax balances |  | (25,515 | ) |  | — |  |  | — |
Foreign tax impairment on valuation of subsidiaries (1) |  | 22,315 |  |  | (92,321 | ) |  | (60,204 | )
Gain on international restructure (1) |  | 18,926 |  |  | — |  |  | — |
Change in valuation allowance |  | (20,839 | ) |  | 113,135 |  |  | 75,822 |
Nontaxable foreign interest (1) |  | (17,414 | ) |  | (19,259 | ) |  | (16,063 | )
Worthless stock deduction (2) |  | (6,084 | ) |  | — |  |  | — |
Foreign rate differential (3) |  | (5,973 | ) |  | (7,518 | ) |  | (1,719 | )
Research and experimentation credits |  | (4,707 | ) |  | (1,034 | ) |  | (1,357 | )
Audit settlement (4) |  | (3,187 | ) |  | (659 | ) |  | (10,264 | )
State and local taxes |  | 2,317 |  |  | 1,490 |  |  | 2,185 |
Deferred compensation (5) |  | (2,036 | ) |  | (2,101 | ) |  | (1,375 | )
Section 199 manufacturing deduction |  | — |  |  | (1,407 | ) |  | (4,694 | )
Other |  | 407 |  |  | 2,042 |  |  | 5,053 |
Income tax expense on continuing operations |  | $ | 30,147 |  |  | $ | 15,276 |  |  | $ | 13,976 |
Effective income tax rate from continuing operations |  | 18.2 | % |  | 23.3 | % |  | 18.4 | %
_________________
(1) | Fully offset by a valuation allowance.
(2) | Permanent tax benefit related to a worthless stock deduction from the reorganization and exit of the Company's steel trading business headquartered in the United Kingdom.
(3) | The impact of global income from operations in jurisdictions with lower statutory tax rates than the U.S., including Poland, which has a statutory income tax rate of 19.0%.
(4) | Includes the release of certain unrecognized tax benefits for which the accruals were greater than the amount assessed.
(5) | Nontaxable gain on assets related to the Company’s nonqualified BRP.
Tax effects of significant temporary differences giving rise to deferred tax assets and liabilities | The income tax effects of significant temporary differences giving rise to deferred tax assets and liabilities were as follows:
|  | August 31,
(in thousands) |  | 2018 |  | 2017
Deferred tax assets: |  |  |  |
Net operating losses and credits |  | $ | 285,847 |  |  | $ | 273,549 |
Deferred compensation and employee benefits |  | 21,333 |  |  | 46,898 |
Reserves and other accrued expenses |  | 12,704 |  |  | 21,727 |
Allowance for doubtful accounts |  | 2,258 |  |  | 3,223 |
Inventory |  | 974 |  |  | — |
Intangibles |  | 906 |  |  | 3,924 |
Other |  | 469 |  |  | 2,314 |
Total deferred tax assets |  | 324,491 |  |  | 351,635 |
Valuation allowance for deferred tax assets |  | (268,554 | ) |  | (273,991 | )
Deferred tax assets, net |  | $ | 55,937 |  |  | $ | 77,644 |
Deferred tax liabilities: |  |  |  |
Fixed assets |  | $ | 83,879 |  |  | $ | 101,707 |
Inventory |  | — |  |  | 12,731 |
Other |  | 1,053 |  |  | 2,455 |
Total deferred tax liabilities |  | $ | 84,932 |  |  | $ | 116,893 |
Net deferred tax liabilities |  | $ | (28,995 | ) |  | $ | (39,249 | )
Reconciliation of the beginning and ending amounts of unrecognized tax benefits | reconciliation of the beginning and ending amounts of unrecognized income tax benefits is as follows:
|  | August 31,
(in thousands) |  | 2018 |  | 2017 |  | 2016
Balance at September 1 |  | $ | 9,283 |  |  | $ | 9,522 |  |  | $ | 27,349 |
Change for tax positions of prior years |  | 3,121 |  |  | — |  |  | — |
Reductions due to settlements with taxing authorities |  | (8,028 | ) |  | (239 | ) |  | (17,827 | )
Reductions due to lapse of statute of limitations |  | (1,255 | ) |  | — |  |  | — |
Balance at August 31 (1) |  | $ | 3,121 |  |  | $ | 9,283 |  |  | $ | 9,522 |

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- Definition Tabular disclosure of the components of income tax expense in the consolidated statements of operations for each year presented including, but not limited to: current tax expense (benefit), deferred tax expense (benefit), investment tax credits, government grants, the benefits of operating loss carryforwards, tax expense that results from allocating certain tax benefits either directly to contributed capital or to reduce goodwill or other noncurrent intangible assets of an acquired entity, adjustments of a deferred tax liability or asset for enacted changes in tax laws or rates or a change in the tax status of the entity, and adjustments of the beginning-of-the-year balances of a valuation allowance because of a change in circumstances that causes a change in judgment about the realizability of the related deferred tax asset in future years. + References No definition available. + Details
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- Definition Tabular disclosure of the reconciliation using percentage or dollar amounts of the reported amount of income tax expense attributable to continuing operations for the year to the amount of income tax expense that would result from applying domestic federal statutory tax rates to pretax income from continuing operations. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 12 -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32687-109319 + Details
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- Definition Tabular disclosure for tax positions taken in the tax returns filed or to be filed for which it is more likely than not that the tax position will not be sustained upon examination by taxing authorities and other income tax contingencies. Includes, but is not limited to, interest and penalties, reconciliation of unrecognized tax benefits, unrecognized tax benefits that would affect the effective tax rate, tax years that remain subject to examination by tax jurisdictions, and information about positions for which it is reasonably possible that amounts unrecognized will significantly change within 12 months. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15A -URI http://asc.fasb.org/extlink&oid=84230637&loc=SL6600010-109319 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -Subparagraph (d) -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32718-109319 Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 19 -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32840-109319 + Details
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