XML 73 R32.htm IDEA: XBRL DOCUMENT
v3.2.0.727

Income Taxes (Tables) | 12 Months Ended
--- | ---
May. 31, 2015
Income (Loss) before Income Taxes | Income (loss) before income taxes as shown in the Consolidated Statements of Income is summarized below for the periods indicated. Certain foreign operations are branches of RPM International Inc.’s subsidiaries and are therefore subject to income taxes in both the United States and the respective foreign jurisdictions. Accordingly, the provision (benefit) for income taxes by jurisdiction and the income (loss) before income taxes by jurisdiction may not be directly related.
Year Ended May 31, |  | 2015 |  |  | 2014 |  |  | 2013 |
(In thousands) |  |  |  |  |  |  |  |  |
United States |  | $ | 273,278 |  |  | $ | 209,626 |  |  | $ | 5,104 |
Foreign |  |  | 179,975 |  |  |  | 214,861 |  |  |  | 171,787 |
Income Before Income Taxes |  | $ | 453,253 |  |  | $ | 424,487 |  |  | $ | 176,891 |
Provision (Benefit) for Income Tax | Provision (benefit) for income taxes consists of the following for the periods indicated:
Year Ended May 31, |  | 2015 |  |  | 2014 |  |  | 2013 |
(In thousands) |  |  |  |  |  |  |  |  |
Current: |  |  |  |  |  |  |  |  |  |  |  |
U.S. Federal |  | $ | 77,374 |  |  | $ | 46,846 |  |  | $ | 56,590 |
State and local |  |  | 4,876 |  |  |  | 5,660 |  |  |  | 6,694 |
Foreign |  |  | 45,173 |  |  |  | 59,425 |  |  |  | 44,747 |
Total Current |  |  | 127,423 |  |  |  | 111,931 |  |  |  | 108,031 |
Deferred: |  |  |  |  |  |  |  |  |  |  |  |
U.S. Federal |  |  | 97,112 |  |  |  | 16,747 |  |  |  | (31,987 | )
State and local |  |  | 1,494 |  |  |  | 1,292 |  |  |  | (3,649 | )
Foreign |  |  | (1,104 | ) |  |  | (11,467 | ) |  |  | (5,355 | )
Total Deferred |  |  | 97,502 |  |  |  | 6,572 |  |  |  | (40,991 | )
Provision for Income Taxes |  | $ | 224,925 |  |  | $ | 118,503 |  |  | $ | 67,040 |
Significant Components of Deferred Income Tax Assets and Liabilities | The significant components of deferred income tax assets and liabilities as of May 31, 2015 and 2014 were as follows:
|  | 2015 |  |  | 2014 |
(In thousands) |  |  |  |  |  |
Deferred income tax assets related to: |  |  |  |  |  |  |  |
Inventories |  | $ | 8,530 |  |  | $ | 6,944 |
Allowance for losses |  |  | 8,575 |  |  |  | 6,410 |
Bankruptcy note liability |  |  | 117,263 |  |  |  |  |
Accrued compensation and benefits |  |  | 111,843 |  |  |  | 102,579 |
Accrued other expenses |  |  | 15,932 |  |  |  | 10,256 |
Other long-term liabilities |  |  | 21,911 |  |  |  | 22,146 |
Net operating loss and credit carryforwards |  |  | 87,595 |  |  |  | 71,534 |
Net unrealized loss on securities |  |  | 21,562 |  |  |  | 19,185 |
Total Deferred Income Tax Assets |  |  | 393,211 |  |  |  | 239,054 |
Less: valuation allowances |  |  | (68,043 | ) |  |  | (85,719 | )
Net Deferred Income Tax Assets |  |  | 325,168 |  |  |  | 153,335 |
Deferred income tax (liabilities) related to: |  |  |  |  |  |  |  |
Depreciation |  |  | (56,636 | ) |  |  | (47,639 | )
Pension and other postretirement benefits |  |  | (16,256 | ) |  |  | (7,867 | )
Amortization of intangibles |  |  | (198,872 | ) |  |  | (115,166 | )
Unremitted foreign earnings |  |  | (108,508 | ) |  |  | (2,500 | )
Total Deferred Income Tax (Liabilities) |  |  | (380,272 | ) |  |  | (173,172 | )
Deferred Income Tax Assets (Liabilities), Net |  | $ | (55,104 | ) |  | $ | (19,837 | )
Reconciliation of Income Tax Expense (Benefit) Computed by Applying U.S. Statutory Federal Income Tax Rate against Income (Loss) before Income Taxes to Provision (Benefit) for Income Taxes | The following table reconciles income tax expense (benefit) computed by applying the U.S. statutory federal income tax rate against income (loss) before income taxes to the provision (benefit) for income taxes:
Year Ended May 31, |  | 2015 |  |  | 2014 |  |  | 2013 |
(In thousands) |  |  |  |  |  |  |  |  |
Income tax expense (benefit) at the U.S. statutory federal income tax rate |  | $ | 158,638 |  |  | $ | 148,570 |  |  | $ | 61,912 |
Impact of foreign operations |  |  | (32,706 | ) |  |  | (27,374 | ) |  |  | (11,552 | )
State and local income taxes net of federal income tax benefit |  |  | 4,140 |  |  |  | 4,519 |  |  |  | 1,979 |
Tax benefits from the domestic manufacturing deduction |  |  | — |  |  |  | (4,878 | ) |  |  | (4,489 | )
Nondeductible fines and penalties |  |  | — |  |  |  | (2,002 | ) |  |  | 4,802 |
Nondeductible business expense |  |  | 1,782 |  |  |  | 1,508 |  |  |  | 1,269 |
Valuation allowance |  |  | (10,455 | ) |  |  | (2,998 | ) |  |  | 14,729 |
Unremitted foreign earnings |  |  | 106,227 |  |  |  | 2,500 |  |  |  |  |
Other |  |  | (2,701 | ) |  |  | (1,342 | ) |  |  | (1,610 | )
Provision for Income Tax Expense |  | $ | 224,925 |  |  | $ | 118,503 |  |  | $ | 67,040 |
Effective Income Tax Rate |  |  | 49.6 | % |  |  | 27.9 | % |  |  | 37.9 | %
Activity Related to Unrecognized Tax Benefits | Uncertain income tax positions are accounted for in accordance with ASC 740. The following table summarizes the activity related to unrecognized tax benefits:
(In millions) |  | 2015 |  |  | 2014 |  |  | 2013 |
Balance at June 1 |  | $ | 15.7 |  |  | $ | 8.4 |  |  | $ | 3.3 |
Additions based on tax positions related to current year |  |  | — |  |  |  | 0.1 |  |  |  | — |
Additions for tax positions of prior years |  |  | 0.9 |  |  |  | 8.9 |  |  |  | 6.0 |
Reductions for tax positions of prior years |  |  | (3.7 | ) |  |  | (1.7 | ) |  |  | (0.9 | )
Balance at May 31 |  | $ | 12.9 |  |  | $ | 15.7 |  |  | $ | 8.4 |

X
- Definition Tabular disclosure of the components of income tax expense attributable to continuing operations for each year presented including, but not limited to: current tax expense (benefit), deferred tax expense (benefit), investment tax credits, government grants, the benefits of operating loss carryforwards, tax expense that results from allocating certain tax benefits either directly to contributed capital or to reduce goodwill or other noncurrent intangible assets of an acquired entity, adjustments of a deferred tax liability or asset for enacted changes in tax laws or rates or a change in the tax status of the entity, and adjustments of the beginning-of-the-year balances of a valuation allowance because of a change in circumstances that causes a change in judgment about the realizability of the related deferred tax asset in future years. + References Reference 1: 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 + Details
Name: | us-gaap_ScheduleOfComponentsOfIncomeTaxExpenseBenefitTableTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Definition Tabular disclosure of the components of net deferred tax asset or liability recognized in an entity's statement of financial position, including the following: the total of all deferred tax liabilities, the total of all deferred tax assets, the total valuation allowance recognized for deferred tax assets. + References Reference 1: 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 + Details
Name: | us-gaap_ScheduleOfDeferredTaxAssetsAndLiabilitiesTableTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Definition Tabular disclosure of the reconciliation using percentage or dollar amounts of the reported amount of income tax expense attributable to continuing operations for the year to the amount of income tax expense that would result from applying domestic federal statutory tax rates to pretax income from continuing operations. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 12 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32687-109319 + Details
Name: | us-gaap_ScheduleOfEffectiveIncomeTaxRateReconciliationTableTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Definition Tabular disclosure of income before income tax between domestic and foreign jurisdictions. + References Reference 1: 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)(1)(i)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 + Details
Name: | us-gaap_ScheduleOfIncomeBeforeIncomeTaxDomesticAndForeignTableTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Definition Tabular disclosure of tax positions taken in the tax returns filed or to be filed for which it is more likely than not that the tax position will not be sustained upon examination by taxing authorities (i.e., uncertain tax positions) and other types of income tax contingencies, including: (1) the policy on classification of interest and penalties; (2) a tabular reconciliation of the total amounts of unrecognized tax benefits at the beginning and end of the period; the total amount(s) of: (3) unrecognized tax benefits that, if recognized, would affect the effective tax rate, and (4) interest and penalties recognized in each of the income statement and balance sheet; (5) for positions for which it is reasonably possible that the total amounts unrecognized will significantly change within 12 months of the reporting date the: (i) nature of the uncertainty, (ii) nature of the event that could occur that would cause the change, and (iii) an estimate of the range of the reasonably possible change or a statement that an estimate of the range cannot be made; and (6) a description of tax years that remain subject to examination by major tax jurisdictions. + 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 + Details
Name: | us-gaap_SummaryOfIncomeTaxContingenciesTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration