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Income Taxes | 12 Months Ended
--- | ---
May 31, 2013
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes The components of deferred tax assets and liabilities are as follows:
|  | May 31,
In millions |  | 2013 |  | 2012
Deferred tax assets: |  |  |  |
Compensation and employee benefit liabilities |  | $ | 16.3 |  |  | $ | 15.8 |
Other current liabilities |  | 6.3 |  |  | 6.7 |
Tax credit carry forward |  | 35.3 |  |  | 31.7 |
Depreciation |  | 8.5 |  |  | 8.0 |
Stock-based compensation |  | 24.6 |  |  | 28.5 |
Other |  | 16.6 |  |  | 17.4 |
Gross deferred tax assets |  | 107.6 |  |  | 108.1 |
Deferred tax liabilities: |  |  |  |
Capitalized software |  | 45.8 |  |  | 39.3 |
Depreciation |  | 20.2 |  |  | 21.8 |
Intangible assets |  | 41.0 |  |  | 36.8 |
Revenue not subject to current taxes |  | 11.7 |  |  | 11.1 |
Unrealized gains on available-for-sale securities |  | 13.3 |  |  | 21.8 |
Other |  | 0.6 |  |  | 1.0 |
Gross deferred tax liabilities |  | 132.6 |  |  | 131.8 |
Net deferred tax liability |  | $ | (25.0 | ) |  | $ | (23.7 | )
The components of the provision for income taxes are as follows:
|  | Year ended May 31,
In millions |  | 2013 |  | 2012 |  | 2011
Current: |  |  |  |  |  |
Federal |  | $ | 274.2 |  |  | $ | 259.8 |  |  | $ | 234.0 |
State |  | 62.9 |  |  | 40.8 |  |  | 29.3 |
Total current |  | 337.1 |  |  | 300.6 |  |  | 263.3 |
Deferred: |  |  |  |  |  |
Federal |  | 5.5 |  |  | 9.3 |  |  | 12.0 |
State |  | (0.2 | ) |  | 2.4 |  |  | 1.6 |
Total deferred |  | 5.3 |  |  | 11.7 |  |  | 13.6 |
Provision for income taxes |  | $ | 342.4 |  |  | $ | 312.3 |  |  | $ | 276.9 |
A reconciliation of the U.S. federal statutory tax rate to the Company’s effective income tax rate is as follows:
|  | Year ended May 31,
|  | 2013 |  | 2012 |  | 2011
Federal statutory tax rate |  | 35.0 | % |  | 35.0 | % |  | 35.0 | %
Increase/(decrease) resulting from: |  |  |  |  |  |
State income taxes, net of federal tax benefit |  | 3.0 | % |  | 3.3 | % |  | 2.5 | %
Tax settlement |  | 1.5 | % |  | — | % |  | — | %
Tax-exempt municipal bond interest |  | (1.7 | )% |  | (1.8 | )% |  | (2.2 | )%
Other items |  | (0.2 | )% |  | (0.2 | )% |  | (0.3 | )%
Effective income tax rate |  | 37.6 | % |  | 36.3 | % |  | 35.0 | %
Uncertain income tax positions: The Company is subject to U.S. federal income tax, numerous local and state tax jurisdictions within the U.S., and income taxes in Germany. The Company maintains a reserve for uncertain tax positions. As of May 31, 2013 and May 31, 2012, the total reserve for uncertain tax positions was $19.8 million and $36.8 million, respectively. As of May 31, 2013 and May 31, 2012, $19.7 million and $35.9 million of the total reserve for uncertain tax positions was included in long-term liabilities on the Consolidated Balance Sheets. A reconciliation of the beginning and ending amounts of the Company’s gross unrecognized tax benefits, not including interest or other potential offsetting effects, is as follows:
|  | Year ended May 31,
In millions |  | 2013 |  | 2012 |  | 2011
Balance as of beginning of fiscal year |  | $ | 41.7 |  |  | $ | 41.2 |  |  | $ | 35.8 |
Additions for tax positions of the current year |  | 28.5 |  |  | 0.4 |  |  | 6.0 |
Additions for tax positions of prior years |  | 12.2 |  |  | 1.3 |  |  | 0.1 |
Reductions for tax positions of prior years |  | (0.5 | ) |  | (0.1 | ) |  | (0.1 | )
Settlements with tax authorities |  | (55.0 | ) |  | (0.7 | ) |  | — |
Expiration of the statute of limitations |  | (0.2 | ) |  | (0.4 | ) |  | (0.6 | )
Balance as of end of fiscal year |  | $ | 26.7 |  |  | $ | 41.7 |  |  | $ | 41.2 |
In May 2013, the Company executed a closing agreement that resolved tax matters related to the audits by New York State for the fiscal year ended May 31, 2004 ("fiscal 2004") through fiscal 2011. As a result, the reserve for uncertain tax positions was increased by $21.2 million in May 2013. The resolution and execution of the closing agreement in May 2013 on the open tax matters for fiscal 2004 through fiscal 2011 impacted the Company's effective income tax rate for fiscal 2013, as noted in the reconciliation of the U.S. federal statutory rate to the Company's effective income tax rate. The reserve as of May 31, 2013 substantially relates to uncertain tax positions for state income tax matters. The Company believes the reserve for uncertain tax positions, including interest and net of federal benefits, of $19.8 million as of May 31, 2013 adequately covers open tax years and uncertain tax positions up to and including fiscal 2013 for major taxing jurisdictions. As of May 31, 2013, $14.6 million of the $19.8 million unrecognized tax benefits, if recognized, would impact the Company’s effective income tax rate. As of May 31, 2012, $31.6 million of the $36.8 million unrecognized tax benefits, if recognized, would have impacted the Company’s effective income tax rate. The Company has concluded all U.S. federal income tax matters through the fiscal year ended May 31, 2010. Fiscal 2011 and fiscal 2012 are still subject to potential audit. With limited exception, state income tax audits by taxing authorities are closed through the fiscal year ended May 31, 2008, primarily due to expiration of the statute of limitations. The Company continues to follow its policy of recognizing interest and penalties accrued on tax positions as a component of income taxes on the Consolidated Statements of Income and Comprehensive Income. The amount of accrued interest and penalties associated with the Company’s tax positions is immaterial to the Consolidated Balance Sheets. The amount of interest and penalties recognized for fiscal years 2013, 2012, and 2011 was immaterial to the Company’s results of operations.

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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=6881521&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 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 109 -Paragraph 136, 172 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 109 -Paragraph 43, 44, 45, 46, 47, 48, 49 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. + Details
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