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Income Taxes
3 Months Ended
Nov. 30, 2011
Income Taxes [Abstract]  
Income Taxes

Note 13. Income Taxes

The Company uses an estimated annual effective tax rate, which is based on expected annual income, statutory tax rates and tax planning opportunities available in the various jurisdictions in which the Company operates, to determine its quarterly provision for income taxes. Certain significant or unusual items are separately recognized in the quarter in which they occur and can be a source of variability in the effective tax rates from quarter to quarter.

The provision for income taxes was 31.6% and 31.5% of income before income taxes for the three months ended November 30, 2011 and 2010, respectively. The effective income tax rate was effectively unchanged from period to period; however, the November 30, 2010 tax rate was mostly driven by a one-time benefit from adjustments from the provision calculations to the tax return filings, while the November 30, 2011 tax rate was driven by a continuing shift in the allocation of the Company's net income from the U.S. to certain foreign jurisdictions, primarily the U.K., where income is generally taxed at lower rates.

The total amount of unrecognized tax benefits was $1.3 million as of November 30, 2011 and $1.4 million as of August 31, 2011, of which $0.9 million and $1.0 million, respectively, would impact the effective tax rate if recognized. The gross liability for income taxes related to unrecognized tax benefits is included in other long-term liabilities in the Company's condensed consolidated balance sheets.

The total balance of accrued interest and penalties related to uncertain tax positions was $0.4 million as of November 30, 2011 and August 31, 2011. The Company recognizes interest and penalties related to uncertain tax positions as a component of income tax expense and the accrued interest and penalties are included in deferred and other long-term liabilities in the Company's condensed consolidated balance sheets. There were no material interest or penalties included in income tax expense for each of the three months ended November 30, 2011 and 2010. The Company recognized no tax benefits during the three months ended November 30, 2011.

The Company is subject to taxation in the U.S. and in various state and foreign jurisdictions. Due to expired statutes, the Company's federal income tax returns for years prior to fiscal year 2008 are not subject to examination by the U.S. Internal Revenue Service. Generally, for the majority of state and foreign jurisdictions where the Company does business, periods prior to fiscal year 2007 are no longer subject to examination. The Company is currently under audit in a state jurisdiction for fiscal year 2009. The Company has estimated that up to $0.5 million of unrecognized tax benefits related to income tax positions may be affected by the resolution of tax examinations or expiring statutes of limitation within the next twelve months. Audit outcomes and the timing of settlements are subject to significant uncertainty.