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INCOME TAX
 12 Months Ended
Aug. 31, 2025
Income Tax Disclosure [Abstract]  
INCOME TAX
NOTE 12. INCOME TAX

The components of earnings before income taxes were as follows:
 Year Ended August 31,
(in thousands)202520242023
United States$61,897 $631,592 $1,095,099 
Foreign45,648 4,079 26,868 
Total$107,545 $635,671 $1,121,967 

The income taxes included in the consolidated statements of earnings were as follows:
 Year Ended August 31,
(in thousands)202520242023
Current:   
United States$83,897 $143,462 $168,399 
Foreign8,371 163 6,089 
State and local20,669 18,035 32,916 
Current taxes112,937 161,660 207,404 
Deferred:   
United States(76,005)(8,075)46,008 
Foreign1,126 (7,684)(847)
State and local(15,175)4,279 9,642 
Deferred taxes(90,054)(11,480)54,803 
Total income taxes$22,883 $150,180 $262,207 

A reconciliation of the federal statutory rate to the Company's effective income tax rate, including material items impacting the effective income tax rate, is presented below:
Year Ended August 31,
(in thousands)202520242023
Income tax expense at statutory rate$22,584$133,491$235,613
State and local taxes(1)
4,34117,62933,621
Research and development credit(1)
(7,255)(1,151)(7,986)
Foreign rate differential
(1,344)513(1,365)
Interest expense related to uncertain tax positions
1,3142,1541,052
Non-deductible compensation
1,3001,6511,825
Nontaxable gain
(2,131)(1,786)(1,055)
TCJA - Toll charge and related foreign tax credits
(2,766)——
Other6,840(2,321)502
Income tax expense$22,883$150,180$262,207
Effective income tax rate21.3 %23.6 %23.4 %
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(1) 2025, 2024 and 2023 include impacts of uncertain tax positions.

The Company plans to repatriate the current and future earnings from the Europe Steel Group segment and certain immaterial foreign jurisdictions in the Emerging Businesses Group segment and has recorded an immaterial amount of tax expense related to such earnings. The Company considers the undistributed earnings of the Europe Steel Group segment prior to August 31, 2019 and all other undistributed earnings of the Emerging Businesses Group segment to be indefinitely reinvested and has not recorded deferred tax liabilities on such earnings.
The income tax effects of significant temporary differences giving rise to deferred tax assets and liabilities were as follows:
 August 31,
(in thousands)20252024
Deferred tax assets:  
Net operating losses and credits$273,140 $278,855 
Capitalized research and development53,651 57,597 
ROU operating lease liabilities41,352 41,838 
Deferred compensation and employee benefits33,905 32,377 
Reserves and other accrued expenses11,924 13,839 
Litigation-related reserve88,756 — 
Other7,300 19,122 
Total deferred tax assets510,028 443,628 
Valuation allowance for deferred tax assets(253,196)(256,826)
Deferred tax assets, net256,832 186,802 
Deferred tax liabilities:  
Property, plant and equipment(335,705)(353,439)
Intangible assets(32,444)(37,233)
ROU operating lease assets(40,922)(41,463)
Derivatives(11,889)(6,850)
Other(13,349)(13,093)
Total deferred tax liabilities(434,309)(452,078)
Net deferred tax liabilities$(177,477)$(265,276)

Net operating losses giving rise to deferred tax assets consist of $269.3 million of state net operating losses and $915.0 million of foreign net operating losses that expire in varying amounts beginning in 2026 (with certain amounts having indefinite carryforward periods). These assets will be reduced as income tax expense is recognized in future periods.

The Company maintains a valuation allowance to reduce certain deferred tax assets to amounts that are more likely than not to be realized. The Company's valuation allowances primarily relate to net operating loss and credit carryforwards in certain state and foreign jurisdictions for which utilization is uncertain.

A reconciliation of the beginning and ending amounts of unrecognized income tax benefits is presented below:
(in thousands)202520242023
Balance at September 1,$45,721 $44,165 $29,747 
Change for tax positions of current year— — 14,792 
Change for tax positions of prior years8,000 1,556 (374)
Reductions due to lapse of statute of limitations(9,486)— — 
Balance at August 31,(1)
$44,235 $45,721 $44,165 
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(1) The full balance of unrecognized income tax benefits in each year, if recognized, would have impacted the Company’s effective income tax rate at the end of each respective year.

At August 31, 2025 and 2024, the Company had accrued interest and penalties related to uncertain tax positions of $5.8 million and $4.1 million, respectively.

During 2026, the Company anticipates the statute of limitations relating to positions of the Company in prior year income tax returns may lapse. As a result, it is reasonably possible that the amount of unrecognized tax benefits may decrease by $12.6 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, the Company and its subsidiaries are subject to examination by various taxing authorities. A summary of fiscal years open to examination is presented below.

U.S. Federal — 2022 and forward
U.S. States — 2021 and forward
Foreign — 2020 and forward

One Big Beautiful Bill Act

On July 4, 2025, the One Big Beautiful Bill Act (the "OBBBA") was enacted into law, introducing significant amendments to U.S. tax legislation with varying effective dates. Key provisions that impact CMC include the expansion of bonus depreciation, accelerated expensing of research and development costs and revisions to international tax regimes. CMC has incorporated these amendments into its fiscal 2025 tax provision, as applicable, and there was no material impact to the Company's income tax expense or effective tax rate. The Company continues to evaluate the legislation.