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Income Taxes
9 Months Ended
May. 31, 2015
Income Taxes [Abstract]  
Income Taxes

Note 12.  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 30.2% and 30.4% of income before income taxes for the three months ended May 31, 2015 and 2014, respectively, and 30.1% and 30.6% of income before income taxes for the nine months ended May 31, 2015 and 2014, respectively. The decrease in the effective income tax rate for both the three and nine months ended May 31, 2015 as compared to the same periods of the prior fiscal year was driven by the portion of the Company’s total earnings from foreign operations, particularly in the United Kingdom, which are taxed at decreasing tax rates.

 

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 2012 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 2011 are no longer subject to examination. The Company has estimated that up to $0.4 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.