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INCOME TAXES (Tables) | 12 Months Ended
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May 31, 2025
Income Tax Disclosure [Abstract] |
Schedule of Income before Income Tax, Domestic and Foreign | Income before income taxes is as follows:
| YEAR ENDED MAY 31,
(Dollars in millions) | 2025 | 2024 | 2023
Income before income taxes: |  |  |
United States | $ | 3,220 |  | $ | 5,588 |  | $ | 4,663 |
Foreign | 665 |  | 1,112 |  | 1,538 |
TOTAL INCOME BEFORE INCOME TAXES | $ | 3,885 |  | $ | 6,700 |  | $ | 6,201 |
Schedule of Components of Income Tax Expense | The provision for income taxes is as follows:
| YEAR ENDED MAY 31,
(Dollars in millions) | 2025 | 2024 | 2023
Current: |  |  |
United States |  |  |
Federal | $ | 358 |  | $ | 782 |  | $ | 430 |
State | 121 |  | 201 |  | 184 |
Foreign | 475 |  | 514 |  | 634 |
Total Current | 954 |  | 1,497 |  | 1,248 |
Deferred: |  |  |
United States |  |  |
Federal | (135) |  | (422) |  | (162) |
State | (12) |  | (61) |  | (25) |
Foreign | (141) |  | (14) |  | 70 |
Total Deferred | (288) |  | (497) |  | (117) |
TOTAL INCOME TAX EXPENSE | $ | 666 |  | $ | 1,000 |  | $ | 1,131 |
Schedule of Effective Income Tax Rate Reconciliation | A reconciliation from the U.S. statutory federal income tax rate to the effective income tax rate is as follows:
| YEAR ENDED MAY 31,
| 2025 | 2024 | 2023
Federal income tax rate | 21.0 | % | 21.0 | % | 21.0 | %
State taxes, net of federal benefit | 2.0 | % | 1.4 | % | 1.5 | %
Foreign earnings | 1.1 | % | -2.5 | % | 1.7 | %
U.S. tax regulations - foreign currency losses | -3.4 | % | 0.0 | % | 0.0 | %
Foreign-derived intangible income benefit | -5.3 | % | -4.8 | % | -6.1 | %
Stock-based compensation | 1.5 | % | -0.5 | % | -1.1 | %
Income tax audits and contingency reserves | 2.7 | % | 1.8 | % | 1.0 | %
U.S. research and development tax credit | -2.1 | % | -2.1 | % | -1.2 | %
Other, net | -0.4 | % | 0.6 | % | 1.4 | %
EFFECTIVE INCOME TAX RATE | 17.1 | % | 14.9 | % | 18.2 | %
Schedule of Deferred Income Tax Assets and Liabilities | Deferred income tax assets and liabilities comprise the following as of:
| MAY 31,
(Dollars in millions) | 2025 | 2024
Deferred tax assets: |  |
Inventories | $ | 98 |  | $ | 69 |
Sales return reserves | 205 |  | 125 |
Deferred compensation | 387 |  | 347 |
Stock-based compensation | 285 |  | 290 |
Reserves and accrued liabilities | 143 |  | 113 |
Operating lease liabilities | 458 |  | 474 |
Intangibles | 217 |  | 236 |
Capitalized research and development expenditures | 923 |  | 878 |
Net operating loss carry-forwards | 75 |  | 21 |
Subpart F deferred tax | 315 |  | 409 |
Other | 212 |  | 214 |
Total deferred tax assets | 3,318 |  | 3,176 |
Valuation allowance | (51) |  | (29) |
Total deferred tax assets after valuation allowance | 3,267 |  | 3,147 |
Deferred tax liabilities: |  |
Foreign withholding tax on undistributed earnings of foreign subsidiaries | (119) |  | (131) |
Property, plant and equipment | (225) |  | (290) |
Right-of-use assets | (377) |  | (397) |
Other | (4) |  | (9) |
Total deferred tax liabilities | (725) |  | (827) |
NET DEFERRED TAX ASSET (1) | $ | 2,542 |  | $ | 2,320 |
(1)Of the total $2,542 million net deferred tax asset for the period ended May 31, 2025, $2,668 million was included within Deferred income taxes and other assets and $(126) million was included within Deferred income taxes and other liabilities on the Consolidated Balance Sheets. Of the total $2,320 million net deferred tax asset for the period ended May 31, 2024, $2,465 million was included within Deferred income taxes and other assets and $(145) million was included within Deferred income taxes and other liabilities on the Consolidated Balance Sheets.
Schedule of Unrecognized Tax Benefits Roll Forward | The following is a reconciliation of the changes in the gross balance of unrecognized tax benefits as of:
| MAY 31,
(Dollars in millions) | 2025 | 2024 | 2023
Unrecognized tax benefits, beginning of the period | $ | 990 |  | $ | 936 |  | $ | 848 |
Gross increases related to prior period tax positions | 11 |  | 35 |  | 95 |
Gross decreases related to prior period tax positions | (10) |  | (13) |  | (17) |
Gross increases related to current period tax positions | 81 |  | 77 |  | 50 |
Settlements | (5) |  | (22) |  | (18) |
Lapse of statute of limitations | (45) |  | (24) |  | (7) |
Changes due to currency translation | 4 |  | 1 |  | (15) |
UNRECOGNIZED TAX BENEFITS, END OF THE PERIOD | $ | 1,026 |  | $ | 990 |  | $ | 936 |

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