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INCOME TAX | 3 Months Ended
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Nov. 30, 2017
Income Tax Disclosure [Abstract] |
Income tax | NOTE 10. INCOME TAX The Company's effective income tax rate from continuing operations for the three months ended November 30, 2017 was 23.4%, compared with 29.8% for the three months ended November 30, 2016. The effective tax rate is determined by computing the estimated annual effective tax rate, adjusted for discrete items, if any, which are taken into account in the appropriate period. Several factors determine the Company's effective tax rate, including the mix and amount of global earnings, the impact of loss companies for which no tax benefit is available due to valuation allowances, audit related adjustments, and the impact of permanent tax adjustments. For the three months ended November 30, 2017, the tax rate was lower than the statutory income tax rate of 35%. Items that impacted the effective tax rate included:
i. | the proportion of the Company's 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%,
ii. | a permanent tax benefit recorded under ASU 2016-09 for stock awards that vested during the first quarter of fiscal 2018,
iii. | a non-taxable gain on assets related to the Company's non-qualified Benefits Restoration Plan, and
iv. | losses from operations in certain jurisdictions in which the Company maintains a valuation allowance, thus providing no benefit for such losses.
For the three months ended November 30, 2016, the tax rate was lower than the statutory income tax rate of 35%. Items that impacted the effective tax rate included:
i. | the proportion of the Company's 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%,
ii. | a permanent tax benefit under Section 199 of the Internal Revenue Code related to domestic production activity,
iii. | a non-taxable gain on assets related to the Company's non-qualified Benefits Restoration Plan, and
iv. | losses from operations in certain jurisdictions in which the Company maintains a valuation allowance, thus providing no benefit for such losses.
The Company’s tax expense related to discontinued operations was not material with respect to the three months ended November 30, 2017 and 2016. The Company made net payments of $4.3 million and $1.8 million for income taxes during the three months ended November 30, 2017 and 2016, respectively. As of November 30, 2017 and August 31, 2017, the reserve for unrecognized income tax benefits related to the accounting for uncertainty in income taxes was $9.3 million, exclusive of interest and penalties. The Company's policy classifies interest recognized on an underpayment of income taxes and any statutory penalties recognized on a tax position as income tax expense. For the three months ended November 30, 2017, the Company recorded immaterial amounts of accrued interest and penalties on unrecognized income tax benefits. During the twelve months ending November 30, 2018, it is reasonably possible that the statute of limitations pertaining to positions taken by the Company in prior year income tax returns may lapse or that income tax audits in various taxing jurisdictions could be finalized. As a result, the total amount of unrecognized income tax benefits may decrease by approximately $9.3 million, which would reduce the provision for income taxes by $9.3 million. The Company files income tax returns in the U.S. and multiple foreign jurisdictions with varying statutes of limitations. In the normal course of business, CMC and its subsidiaries are subject to examination by various taxing authorities. The following is a summary of tax years subject to examination: U.S. Federal — 2012 and forward, with the exception of the R&D credit matter discussed below U.S. States — 2009 and forward Foreign — 2011 and forward During the fiscal year ended August 31, 2016, the Company completed an IRS exam for the years 2009 through 2011 and received confirmation from the United States Congress Joint Committee on Taxation that all matters were settled with the exception of R&D credits, which are still under review. In addition, the Company is under examination by certain state revenue authorities for the years 2009 through 2015. Management believes the Company's recorded income tax liabilities as of November 30, 2017 sufficiently reflect the anticipated outcome of these examinations. On December 22, 2017, President Trump signed into law the Tax Cuts and Jobs Act (the "Act"), which will take effect on January 1, 2018. Some notable provisions of the Act include a reduction of the corporate income tax rate from 35% to 21%, 100% bonus depreciation for certain capital expenditures, and a change from a worldwide system with deferral to a territorial tax system, which includes a one-time toll charge on certain undistributed earnings of non-U.S. subsidiaries. The Company is currently evaluating the full impact of this new legislation on its consolidated financial statements.

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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://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32559-109319 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32718-109319 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32639-109319 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32537-109319 + Details
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