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v3.23.2

Income Taxes (Tables) | 12 Months Ended
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May 31, 2023
Income Tax Disclosure [Abstract] |
Income before Income Taxes | Income before income taxes as shown in the Consolidated Statements of Income is summarized below for the periods indicated.
Year Ended May 31, |  | 2023 |  |  | 2022 |  |  | 2021 |
(In thousands) |  |  |  |  |  |  |  |  |
United States |  | $ | 557,401 |  |  | $ | 342,834 |  |  | $ | 462,468 |
Foreign |  |  | 91,981 |  |  |  | 263,965 |  |  |  | 205,970 |
Income Before Income Taxes |  | $ | 649,382 |  |  | $ | 606,799 |  |  | $ | 668,438 |
Provision (Benefit) for Income Tax | Provision (benefit) for income taxes consists of the following for the periods indicated:
Year Ended May 31, |  | 2023 |  |  | 2022 |  |  | 2021 |
(In thousands) |  |  |  |  |  |  |  |  |
Current: |  |  |  |  |  |  |  |  |
U.S. federal |  | $ | 91,749 |  |  | $ | 60,818 |  |  | $ | 60,666 |
State and local |  |  | 25,972 |  |  |  | 19,495 |  |  |  | 18,959 |
Foreign |  |  | 45,694 |  |  |  | 59,087 |  |  |  | 65,125 |
Total Current |  |  | 163,415 |  |  |  | 139,400 |  |  |  | 144,750 |
Deferred: |  |  |  |  |  |  |  |  |
U.S. federal |  |  | 16,969 |  |  |  | (24,025 | ) |  |  | 20,027 |
State and local |  |  | 4,359 |  |  |  | 2,489 |  |  |  | 3,878 |
Foreign |  |  | (15,092 | ) |  |  | (3,531 | ) |  |  | (3,717 | )
Total Deferred |  |  | 6,236 |  |  |  | (25,067 | ) |  |  | 20,188 |
Provision for Income Taxes |  | $ | 169,651 |  |  | $ | 114,333 |  |  | $ | 164,938 |
Significant Components of Deferred Income Tax Assets and Liabilities | The significant components of deferred income tax assets and liabilities as of May 31, 2023 and 2022 were as follows:
|  | 2023 |  |  | 2022 |
(In thousands) |  |  |  |  |  |
Deferred income tax assets related to: |  |  |  |  |  |
Inventories |  | $ | 18,811 |  |  | $ | 15,967 |
Accrued compensation and benefits |  |  | 18,331 |  |  |  | 22,224 |
Accrued other expenses |  |  | 21,037 |  |  |  | 21,782 |
Deferred income and other long-term liabilities |  |  | 30,239 |  |  |  | 25,389 |
Credit and net operating and capital loss carryforwards |  |  | 75,366 |  |  |  | 63,368 |
Net unrealized loss on securities |  |  | 3,373 |  |  |  | 9,386 |
Research and development |  |  | 17,360 |  |  |  | - |
Pension and other postretirement benefits |  |  | 11,813 |  |  |  | 15,699 |
Total Deferred Income Tax Assets |  |  | 196,330 |  |  |  | 173,815 |
Less: valuation allowances |  |  | (30,033 | ) |  |  | (30,509 | )
Net Deferred Income Tax Assets |  |  | 166,297 |  |  |  | 143,306 |
Deferred income tax (liabilities) related to: |  |  |  |  |  |
Depreciation |  |  | (123,421 | ) |  |  | (91,227 | )
Amortization of intangibles |  |  | (116,763 | ) |  |  | (112,349 | )
Unremitted foreign earnings |  |  | (990 | ) |  |  | (3,002 | )
Total Deferred Income Tax (Liabilities) |  |  | (241,174 | ) |  |  | (206,578 | )
Deferred Income Tax Assets (Liabilities), Net |  | $ | (74,877 | ) |  | $ | (63,272 | )
A
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, |  | 2023 |  |  | 2022 |  |  | 2021 |
(In thousands, except percentages) |  |  |  |  |  |  |  |  |
Income tax expense at the U.S. statutory federal income tax rate |  | $ | 136,370 |  |  | $ | 127,428 |  |  | $ | 140,372 |
Foreign rate differential and other foreign tax adjustments |  |  | 1,535 |  |  |  | 6,278 |  |  |  | 11,942 |
State and local income taxes, net |  |  | 22,017 |  |  |  | 20,393 |  |  |  | 18,625 |
Impact of GILTI provisions |  |  | 4,217 |  |  |  | 1,709 |  |  |  | 1,598 |
Nondeductible business expense |  |  | 1,257 |  |  |  | 532 |  |  |  | 616 |
Valuation allowance |  |  | 1,199 |  |  |  | (32,720 | ) |  |  | (4,389 | )
Deferred tax liability for unremitted foreign earnings |  |  | - |  |  |  | (10,686 | ) |  |  | 5,348 |
Changes in unrecognized tax benefits |  |  | (3,334 | ) |  |  | (1,682 | ) |  |  | (1,847 | )
Equity-based compensation |  |  | (3,482 | ) |  |  | (1,776 | ) |  |  | (8,651 | )
Nondeductible goodwill impairment |  |  | 7,264 |  |  |  | - |  |  |  | - |
Other |  |  | 2,608 |  |  |  | 4,857 |  |  |  | 1,324 |
Provision for Income Tax Expense |  | $ | 169,651 |  |  | $ | 114,333 |  |  | $ | 164,938 |
Effective Income Tax Rate |  |  | 26.1 | % |  |  | 18.8 | % |  |  | 24.7 | %
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) |  | 2023 |  |  | 2022 |  |  | 2021 |
Balance at June 1 |  | $ | 5.7 |  |  | $ | 7.5 |  |  | $ | 9.0 |
Additions for tax positions of prior years |  |  | 0.1 |  |  |  | - |  |  |  | - |
Reductions for tax positions of prior years |  |  | (2.8 | ) |  |  | (1.7 | ) |  |  | (1.8 | )
Foreign currency translation |  |  | (0.1 | ) |  |  | (0.1 | ) |  |  | 0.3 |
Balance at May 31 |  | $ | 2.9 |  |  | $ | 5.7 |  |  | $ | 7.5 |

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- Definition Tabular disclosure for 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 and other income tax contingencies. Includes, but is not limited to, interest and penalties, reconciliation of unrecognized tax benefits, unrecognized tax benefits that would affect the effective tax rate, tax years that remain subject to examination by tax jurisdictions, and information about positions for which it is reasonably possible that amounts unrecognized will significantly change within 12 months. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15A -URI https://asc.fasb.org/extlink&oid=121826272&loc=SL6600010-109319 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -Subparagraph (d) -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32718-109319 Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 19 -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32840-109319 + Details
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