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Income Taxes | 12 Months Ended
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Aug. 31, 2014
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes The provision for income taxes for the years ended August 31, 2014, 2013 and 2012 is as follows:
| 2014 |  | 2013 |  | 2012
| (Dollars in thousands)
Current |  |  |  |  |
Federal | $ | 38,653 |  |  | $ | (18,018 | ) |  | $ | 9,565 |
State | 31,203 |  |  | 11,805 |  |  | 7,851 |
Foreign | 2,837 |  |  | 3,162 |  |  | 4,812 |
| 72,693 |  |  | (3,051 | ) |  | 22,228 |
Deferred |  |  |  |  |
Federal | (23,444 | ) |  | 92,102 |  |  | 66,707 |
State | (1,893 | ) |  | 1,685 |  |  | 1,617 |
Foreign | 940 |  |  | (1,070 | ) |  | (9,700 | )
| (24,397 | ) |  | 92,717 |  |  | 58,624 |
Total | $ | 48,296 |  |  | $ | 89,666 |  |  | $ | 80,852 |
Deferred taxes are comprised of basis differences related to investments, accrued liabilities and certain federal and state tax credits. Effective September 1, 2013, NCRA files as part of our consolidated income tax returns and, as such, these items are assessed in conjunction with our deferred tax assets when determining recoverability. Domestic income before income taxes was $1.2 billion, $1.1 billion, and $1.4 billion for the years ended August 31, 2014, 2013 and 2012 respectively. Foreign activity made up the difference between the total income before income taxes and the domestic amounts. Deferred tax assets and liabilities as of August 31, 2014 and 2013 were as follows:
| 2014 |  | 2013
| (Dollars in thousands)
Deferred tax assets: |  |  |  |  |
Accrued expenses | $ | 76,255 |  |  | $ | 66,973 |
Postretirement health care and deferred compensation | 83,346 |  |  | 57,130 |
Tax credit carryforwards | 70,881 |  |  | 97,242 |
Loss carryforwards | 53,793 |  |  | 57,174 |
Other | 52,956 |  |  | 40,868 |
Deferred tax assets valuation | (111,509 | ) |  | (79,623 | )
Total deferred tax assets | 225,722 |  |  | 239,764 |
Deferred tax liabilities: |  |  |  |  |
Pension | 12,855 |  |  | 6,752 |
Investments | 88,425 |  |  | 91,453 |
Major maintenance | 26,020 |  |  | 31,960 |
Property, plant and equipment | 576,007 |  |  | 529,101 |
Total deferred tax liabilities | 703,307 |  |  | 659,266 |
Net deferred tax liabilities | $ | 477,585 |  |  | $ | 419,502 |
We have total gross loss carry forwards of $247.8 million, of which $152.1 million will expire over periods ranging from fiscal 2015 to fiscal 2036. The remainder will carry forward indefinitely. NCRA’s gross state tax credit carry forwards for income tax are approximately $63.4 million and $88.1 million as of August 31, 2014, and 2013, respectively. During the year ended August 31, 2014, the valuation allowance for NCRA decreased by $8.0 million due to a change in the amount of state tax credits that are estimated to be utilized. NCRA’s valuation allowance is necessary due to the limited amount of taxable income it generates on an annual basis. Based on estimates of future taxable profits and losses in certain foreign tax jurisdictions, we determined that a valuation allowance was required for specific foreign loss carry forwards as of August 31, 2014. If these estimates prove inaccurate, a change in the valuation allowance, up or down, could be required in the future. During 2014, valuation allowances related to foreign operations increased by $39.9 million due to net operating loss carryforwards and other timing differences. Our foreign tax credit of $5.6 million will expire on August 31, 2019 and our alternative minimum tax credit of $5.6 million will not expire. Our general business credits of $18.5 million, comprised primarily of low sulfur diesel credits, will begin to expire on August 31, 2026. As of August 31, 2014, deferred tax assets of $86.5 million and $2.6 million were included in other current assets and other assets, respectively. As of August 31, 2013, net deferred tax assets of $39.3 million were included in other current assets. The reconciliation of the statutory federal income tax rates to the effective tax rates for the years ended August 31, 2014, 2013 and 2012 is as follows:
| 2014 |  | 2013 |  | 2012
Statutory federal income tax rate | 35.0 | % |  | 35.0 | % |  | 35.0 | %
State and local income taxes, net of federal income tax benefit | 1.6 |  |  | 0.9 |  |  | 0.5 |
Patronage earnings | (20.5 | ) |  | (22.9 | ) |  | (24.2 | )
Domestic production activities deduction | (10.0 | ) |  | (8.5 | ) |  | (3.5 | )
Export activities at rates other than the U.S. statutory rate | 1.2 |  |  | 0.6 |  |  | 0.4 |
Valuation allowance | 1.7 |  |  | 2.3 |  |  | 0.6 |
Tax credits | (3.1 | ) |  | (0.5 | ) |  | (1.3 | )
Non-controlling interests | — |  |  | (0.1 | ) |  | (1.9 | )
Other | (1.6 | ) |  | 1.5 |  |  | 0.1 |
Effective tax rate | 4.3 | % |  | 8.3 | % |  | 5.7 | %
We file income tax returns in the U.S. federal jurisdiction, and various state and foreign jurisdictions. Our uncertain tax positions are affected by the tax years that are under audit or remain subject to examination by the relevant taxing authorities. In addition to the current year, fiscal 2006 through 2013 remain subject to examination, at least for certain issues. We account for our income tax provisions in accordance with Accounting Standards Codification (ASC) Topic 740, Income Taxes, which prescribes a minimum threshold that a tax provision is required to meet before being recognized in our consolidated financial statements. This interpretation requires us to recognize in our consolidated financial statements tax positions determined more likely than not to be sustained upon examination, based on the technical merits of the position. Reconciliation of the gross beginning and ending amounts of unrecognized tax benefits for the periods presented follows:
| 2014 |  | 2013 |  | 2012
| (Dollars in thousands)
Balance at beginning of period | $ | 67,271 |  |  | $ | 67,271 |  |  | $ | 67,271 |
Additions attributable to prior year tax positions | 35,718 |  |  | — |  |  | — |
Reductions attributable to prior year tax positions | (9,867 | ) |  | — |  |  | — |
Reductions attributable to statute expiration | (20,941 | ) |  | — |  |  | — |
Balance at end of period | $ | 72,181 |  |  | $ | 67,271 |  |  | $ | 67,271 |
During fiscal 2014, we increased our unrecognized tax benefits for excise tax credits related to the blending and sale of renewable fuels deducted for income taxes. If we were to prevail on all tax positions taken relating to uncertain tax positions, all of the unrecognized tax benefits would benefit the effective tax rate. We do not believe it is reasonably possible that the total amounts of unrecognized tax benefits will significantly increase or decrease during the next 12 months. We recognize interest and penalties related to unrecognized tax benefits in our provision for income taxes. No amount was recognized in our Consolidated Statements of Operations for interest related to unrecognized tax benefits for the year ended August 31, 2014. For the years ended August 31, 2013 and 2012, we recognized $0.2 million and $0.2 million, respectively, for interest related to unrecognized tax benefits. We recorded no interest payable related to unrecognized tax benefits on our Consolidated Balance Sheets as of August 31, 2014 and $0.6 million as of August 31, 2013.

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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 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319 Reference 2: 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 3: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 08 -Paragraph h -Article 4 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=6907707&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=6907707&loc=d3e32537-109319 Reference 6: 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=6907707&loc=d3e32559-109319 + Details
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