Income Tax |
9 Months Ended |
|---|---|
May 31, 2026 | |
| Income Tax Disclosure [Abstract] | |
| Income Tax | NOTE 11. INCOME TAX The Company’s effective income tax rates for the three and nine months ended May 31, 2026 were 8.4% and 7.9%, respectively, compared to the 24.1% and 21.7% in the corresponding periods. 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. The Company's effective tax rate can vary from period to period depending on, among other factors, the mix and amount of global earnings, the impact of loss companies for which no tax benefit is available due to valuation allowances, income tax credits, and the impact of permanent tax adjustments. On January 10, 2025, the Company was awarded a Qualifying Advanced Energy Project Tax Credit in connection with the construction of the West Virginia micro mill under section 48C of the Internal Revenue Code. The amount awarded is a non-refundable transferable investment tax credit allocation equal to 30% of qualified expenditures for certified projects that meet prevailing wage and apprenticeship requirements. The Company elected to account for its non-refundable transferable investment tax credits under ASC 740 using the flow-through method. Under the flow-through method, the credit is recognized in the fiscal year that the qualifying assets are placed in service, which is currently expected to occur upon commissioning of the West Virginia micro mill during 2026. The Company intends to utilize the credit beginning with its 2026 tax return and has included the estimated impact in the financial statements beginning in 2026. During the three and nine months ended May 31, 2026, the Company recognized approximately $34.9 million and $88.7 million, respectively, in income tax benefit related to the credit. No impact was recognized in the corresponding periods. Income Tax Examination The Company is subject to examination of certain income tax returns by the Internal Revenue Service ("IRS"). On March 3, 2026, the IRS notified the Company that the fiscal 2024 federal income tax return had been selected for examination. The audit commenced in May. As of May 31, 2026, there were no known or estimable adjustments to the year's taxable income outside of positions previously reserved. As such, no additional reserves were recorded. The Company will continue to evaluate developments in the examination and adjust its reserves, if necessary, as additional information becomes available.
|