SCHN 2021 Form 10-K

84 / Schnitzer Steel Industries, Inc. Form 10-K 2021 Note 14 - Income Taxes Income (loss) from continuing operations before income taxes was as follows for the years ended August 31 (in thousands): 2021 2020 2019 United States $ 195,037 $ (5,649) $ 69,476 Foreign 12,952 3,710 6,764 Total $ 207,989 $ (1,939) $ 76,240 Income tax expense (benefit) from continuing operations consisted of the following for the years ended August 31 (in thousands): 2021 2020 2019 Current: Federal $ 27,244 $ (15,778) $ 2,690 State 3,811 329 315 Foreign (4) 519 52 Total current tax expense (benefit) 31,051 (14,930) 3,057 Deferred: Federal 6,939 12,292 12,930 State (547) 1,338 794 Foreign 492 1,466 889 Total deferred tax expense 6,884 15,096 14,613 Total income tax expense $ 37,935 $ 166 $ 17,670 A reconciliation of the difference between the federal statutory rate and the Company’s effective tax rate for the years ended August 31 is as follows: 2021 2020 2019 Federal statutory rate 21.0% 21.0% 21.0% State taxes, net of credits 1.4 (57.9) 1.2 Foreign income taxed at different rates (0.5) (11.6) (0.2) Valuation allowance on deferred tax assets (1.0) (24.5) (0.2) Federal rate change 0.4 71.9 — Non-deductible officers’ compensation 1.2 (46.9) 1.8 Other non-deductible expenses 0.4 (66.0) 1.0 Noncontrolling interests (0.5) 21.1 (0.5) Research and development credits (1.5) 99.3 (0.5) Tax return to provision adjustment — 89.2 0.5 Unrecognized tax benefits 0.9 (97.3) 0.7 Interest income (0.1) 9.0 (0.4) Excess tax benefit from stock-based compensation (0.2) 3.0 (1.2) Foreign derived intangible income (2.5) — — Other (0.8) (18.9) — Effective tax rate 18.2% (8.6)% 23.2%

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