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Taxes | 12 Months Ended
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May 31, 2022
Income Tax And Non Income Tax Disclosure [Abstract] |
Taxes | TAXES The components of Earnings (loss) before income taxes for the fiscal years ended May 31 were:
| 2022 |  | 2021 |  | 2020
United States | $ | 76.9 |  |  | $ | (45.8) |  |  | $ | (92.5) |
Non-United States |  | 12.8 |  |  |  | 27.6 |  |  |  | 2.8 |
Total | $ | 89.7 |  |  | $ | (18.2) |  |  | $ | (89.7) |
The provision (benefit) for income taxes for the fiscal years ended May 31 consisted of the following components:
| 2022 |  | 2021 |  | 2020
Current |  |  |  |  |  |  |  |
Federal | $ | (2.1) |  |  | $ | 2.3 |  |  | $ | (72.2) |
State and local |  | 0.6 |  |  |  | (0.3) |  |  |  | (1.2) |
Non-United States |  | 3.0 |  |  |  | 6.0 |  |  |  | 2.1 |
Total Current | $ | 1.5 |  |  | $ | 8.0 |  |  | $ | (71.3) |
Deferred |  |  |  |  |  |  |  |
Federal | $ | 6.1 |  |  | $ | (10.9) |  |  | $ | 27.3 |
State and local |  | 2.4 |  |  |  | (1.3) |  |  |  | (0.9) |
Non-United States |  | (1.3) |  |  |  | (3.1) |  |  |  | (1.1) |
Total Deferred | $ | 7.2 |  |  | $ | (15.3) |  |  | $ | 25.3 |
Total Current and Deferred | $ | 8.7 |  |  | $ | (7.3) |  |  | $ | (46.0) |
Effective Tax Rate Reconciliation A reconciliation of the significant differences between the effective income tax rate and the federal statutory rate on Earnings (loss) before income taxes for the fiscal years ended May 31 was as follows:
| 2022 |  | 2021 |  | 2020
Computed federal statutory provision |  | 21.0 | % |  |  | 21.0 | % |  |  | 21.0 | %
State income tax provision, net of federal income tax benefit |  | 3.1 |  |  |  | (10.4) |  |  |  | 2.0 |
Difference in effective tax rates on earnings of foreign subsidiaries |  | (0.2) |  |  |  | 7.0 |  |  |  | 1.8 |
Rate differential on net operating loss carrybacks |  | — |  |  |  | 19.3 |  |  |  | 34.2 |
GILTI inclusion |  | — |  |  |  | (2.7) |  |  |  | (2.4) |
Various tax credits |  | (1.9) |  |  |  | 6.5 |  |  |  | 0.8 |
Valuation allowances |  | 0.2 |  |  |  | 25.7 |  |  |  | (1.1) |
Uncertain positions |  | (8.1) |  |  |  | (14.6) |  |  |  | (2.3) |
Equity and other compensation |  | 1.2 |  |  |  | (8.7) |  |  |  | (0.6) |
Return to provision adjustments |  | (4.4) |  |  |  | — |  |  |  | (0.7) |
Other, net |  | (1.2) |  |  |  | (3.0) |  |  |  | (1.4) |
Effective tax rates |  | 9.7 | % |  |  | 40.1 | % |  |  | 51.3 | %
Total provision (benefit) for income taxes | $ | 8.7 |  |  | $ | (7.3) |  |  | $ | (46.0) |
During the fiscal year ended May 31, 2022, the IRS substantially completed their examination of the income tax returns for the fiscal years 2015 through 2020. As a result of the examination, reserves for uncertain positions were released. As of May 31, 2022, return to provision adjustments include the impact of tax accounting method changes filed with the fiscal 2021 tax return. Unremitted Earnings The Company assesses foreign investment levels periodically to determine if all or a portion of the Company’s investments in foreign subsidiaries are indefinitely invested. The Company is permanently reinvested in certain foreign subsidiaries representing a portion of the Company's investments in foreign subsidiaries. Any required adjustment to the income tax provision would be reflected in the period that the Company changes this assessment. As of May 31, 2022, there have been no adjustments to the income tax provision related to unremitted earnings. Deferred Taxes The significant components for deferred income taxes for the fiscal years ended May 31 were as follows:
| 2022 |  | 2021
Deferred tax assets: |  |  |  |  |
Tax uniform capitalization | $ | 9.8 |  |  | $ | 8.6 |
Prepublication expenses |  | 0.6 |  |  |  | 0.6 |
Inventory reserves |  | 21.3 |  |  |  | 19.3 |
Allowance for credit losses |  | 4.0 |  |  |  | 2.8 |
Deferred revenue |  | 2.5 |  |  |  | 13.5 |
Stock Based Compensation |  | 8.0 |  |  |  | 9.1 |
Other reserves |  | 8.4 |  |  |  | 10.8 |
Postretirement, post employment and pension obligations |  | 2.3 |  |  |  | 3.1 |
Tax carryforwards |  | 35.2 |  |  |  | 39.7 |
Lease liabilities |  | 22.8 |  |  |  | 23.7 |
Other |  | 15.7 |  |  |  | 14.1 |
Gross deferred tax assets | $ | 130.6 |  |  | $ | 145.3 |
Valuation allowance |  | (23.1) |  |  |  | (23.1) |
Total deferred tax assets | $ | 107.5 |  |  | $ | 122.2 |
Deferred tax liabilities: |  |  |  |  |
Depreciation and amortization |  | (66.4) |  |  |  | (74.3) |
Lease Right of Use Assets |  | (20.7) |  |  |  | (20.2) |
Other |  | (2.5) |  |  |  | (2.3) |
Total deferred tax liability | $ | (89.6) |  |  | $ | (96.8) |
Total net deferred tax assets | $ | 17.9 |  |  | $ | 25.4 |
As of May 31, 2022, the total net deferred tax assets include federal deferred tax liabilities of $3.6 which are included in Other noncurrent liabilities on the Company's Consolidated Balance Sheet and deferred tax assets of $21.5. As of May 31, 2021, there were no deferred tax liabilities. The Company regularly assesses the realizability of deferred tax assets considering all available evidence including, to the extent applicable, the nature, frequency and severity of prior cumulative losses, forecasts of future taxable income, tax filing status, duration of statutory carryforward periods, tax planning strategies and historical experience. For the fiscal year ended May 31, 2022, there was no significant change to the valuation allowance as a result of a release of a prior fiscal year foreign net operating loss, offset by an accrual related to foreign tax credits. For the fiscal year ended May 31, 2021, the valuation allowance decreased by $8.2, primarily the result of the release of valuation allowances for prior fiscal year state net operating losses and the expiration of a foreign net operating loss. The Company has tax effected state and foreign net operating loss carryforwards of $8.6 and $25.3, respectively, for the fiscal year ended May 31, 2022. In addition, the Company has certain tax carryforwards related to tax credits of $1.3 for the fiscal year ended May 31, 2021. Certain state net operating loss carryforwards, if not utilized, expire at various times, primarily between fiscal year 2023 and fiscal year 2042. Certain foreign net operating loss carryforwards, if not utilized, also expire at various times. Approximately half of the foreign net operating loss carryforwards expire between fiscal year 2023 and fiscal year 2042 and the remaining carryforwards do not have an expiration date. Unrecognized tax benefits The benefits of uncertain tax positions are recorded in the financial statements only after determining a more likely-than-not probability that the uncertain tax positions will withstand challenge, if any, from taxing authorities, in which case such benefits are included in long-term income taxes payable and reduced by the associated federal deduction for state taxes and non-U.S. tax credits. The interest and penalties related to these uncertain tax positions are recorded as part of the Company’s income tax expense and constitute part of Other noncurrent liabilities on the Company’s Consolidated Balance Sheets. The total amount of unrecognized tax benefits at May 31, 2022, 2021, and 2020 were $3.1, excluding $0.3 accrued for interest and penalties, $12.3, excluding $2.6 accrued for interest and penalties, and $10.2, excluding $2.2 accrued for interest and penalties, respectively. Of the total amount of unrecognized tax benefits at May 31, 2022, 2021, and 2020, $3.1, $12.3 and $10.2, respectively, would impact the Company’s effective tax rate. During the years presented, the Company recognized interest and penalties related to unrecognized tax benefits in the provision for taxes in the Consolidated Financial Statements. The Company recognized a benefit of $2.3, an expense of $0.5, and an expense of $0.8 for the years ended May 31, 2022, 2021, and 2020, respectively. The table below presents a reconciliation of the unrecognized tax benefits for the fiscal years indicated:
Gross unrecognized benefits at May 31, 2019 | $ | 9.0 |
Decreases related to prior year tax positions |  | (0.2) |
Increase related to prior year tax positions |  | 1.8 |
Increases related to current year tax positions |  | 0.1 |
Settlements during the period |  | (0.2) |
Lapse of statute of limitation |  | (0.3) |
Gross unrecognized benefits at May 31, 2020 | $ | 10.2 |
Decreases related to prior year tax positions |  | (0.2) |
Increase related to prior year tax positions |  | 2.6 |
Increases related to current year tax positions |  | 0.2 |
Settlements during the period |  | (0.2) |
Lapse of statute of limitation |  | (0.3) |
Gross unrecognized benefits at May 31, 2021 | $ | 12.3 |
Decreases related to prior year tax positions |  | (6.8) |
Increase related to prior year tax positions |  | 0.5 |
Increases related to current year tax positions |  | 0.6 |
Settlements during the period |  | (3.5) |
Lapse of statute of limitation |  | — |
Gross unrecognized benefits at May 31, 2022 | $ | 3.1 |
Unrecognized tax benefits for the Company decreased by $9.2 for the year ended May 31, 2022 and increased by $2.1 for the year ended May 31, 2021. The decrease was primarily related to the release of uncertain tax positions resulting from the effectively settled IRS examination. Income Tax Returns The Company, including its domestic subsidiaries, files a consolidated U.S. income tax return, and also files tax returns in various states and other local jurisdictions. Also, certain subsidiaries of the Company file income tax returns in foreign jurisdictions. The Company is routinely audited by various tax authorities. The IRS is substantially complete with the examination of the US income tax returns for the fiscal 2015 through fiscal 2020 tax years. The examination is expected to be finalized in the first quarter of fiscal 2023 and the Company does not expect any additional impact to the financial results. In fiscal 2021, there were settlements of audits with taxing authorities, none of which were considered material to the provision for income taxes. Tax Legislation Updates In response to the COVID-19 pandemic, many governments have enacted measures to provide aid and economic stimulus. These measures included deferring the due dates of tax payments or other changes to their income and non-income-based tax laws as well as providing direct government assistance through grants and forgivable loans. On March 27, 2020, the U.S. government enacted the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”). The CARES Act, among other things, included provisions relating to refundable payroll tax credits, deferment of employer-side social security payments, net operating loss carryback periods, alternative minimum tax credit refunds, modifications to the net interest deduction limitations and technical corrections to tax depreciation methods for qualified improvement property. Non-income Taxes The Company is subject to tax examinations for sales-based taxes. A number of these examinations are ongoing and, in certain cases, have resulted in assessments from taxing authorities. The Company assesses sales tax contingencies for each jurisdiction in which it operates, considering all relevant facts including statutes, regulations, case law and experience. Where a sales tax liability in respect to a jurisdiction is probable and can be reliably estimated for such jurisdiction, the Company has made accruals for these matters which are reflected in the Company’s Consolidated Financial Statements. These amounts are included in the Consolidated Financial Statements in Selling, general and administrative expenses. Future developments relating to the foregoing could result in adjustments being made to these accruals.

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- Definition Description containing the entire income tax and non-income tax disclosure. Examples 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 carry forward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carry back, and tax uncertainties information. Also, includes disclosure relating to non-income taxes such as sales based taxes etc. This element may be used as a single block of text to encapsulate the entire disclosure including data and tables. + References No definition available. + Details
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