Income Taxes (Tables)

12 Months Ended

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