Income Taxes (Tables)

12 Months Ended

May 31, 2024

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,	2024		2023		2022
(In thousands)
United States	$	625,167	$	557,401	$	342,834
Foreign		162,670		91,981		263,965
Income Before Income Taxes	$	787,837	$	649,382	$	606,799

Provision (Benefit) for Income Tax

Provision (benefit) for income taxes consists of the following for the periods indicated:

Year Ended May 31,	2024			2023			2022
(In thousands)
Current:
U.S. federal	$	109,869		$	91,749		$	60,818
State and local		31,996			25,972			19,495
Foreign		62,168			45,694			59,087
Total Current		204,033			163,415			139,400
Deferred:
U.S. federal		(2,263	)		16,969			(24,025	)
State and local		618			4,359			2,489
Foreign		(3,993	)		(15,092	)		(3,531	)
Total Deferred		(5,638	)		6,236			(25,067	)
Provision for Income Taxes	$	198,395		$	169,651		$	114,333

Significant Components of Deferred Income Tax Assets and Liabilities

The significant components of deferred income tax assets and liabilities as of May 31, 2024 and 2023 were as follows:

	2024			2023
(In thousands)
Deferred income tax assets related to:
Inventories	$	17,772		$	18,811
Accrued compensation and benefits		17,649			18,331
Accrued other expenses		19,058			21,037
Deferred income and other long-term liabilities		31,204			30,239
Credit, net operating, interest and capital loss carryforwards		87,590			75,366
Net unrealized loss on securities		-			3,373
Research and development		33,076			17,360
Pension and other postretirement benefits		-			11,813
Total Deferred Income Tax Assets		206,349			196,330
Less: valuation allowances		(30,021	)		(30,033	)
Net Deferred Income Tax Assets		176,328			166,297
Deferred income tax (liabilities) related to:
Depreciation		(132,007	)		(123,421	)
Amortization of intangibles		(125,553	)		(116,763	)
Unremitted foreign earnings		(4,055	)		(990	)
Net unrealized gain on securities		(1,305	)		-
Pension and other postretirement benefits		(1,108	)		-
Total Deferred Income Tax (Liabilities)		(264,028	)		(241,174	)
Deferred Income Tax Assets (Liabilities), Net	$	(87,700	)	$	(74,877	)

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,	2024			2023			2022
(In thousands, except percentages)
Income tax expense at the U.S. statutory federal income tax rate	$	165,446		$	136,370		$	127,428
Foreign rate differential and other foreign tax adjustments		4,342			1,535			6,278
State and local income taxes, net		28,000			22,017			20,393
Impact of GILTI provisions		3,548			4,217			1,709
Nondeductible business expense		1,944			1,257			532
Valuation allowance		(754	)		1,199			(32,720	)
Deferred tax liability for unremitted foreign earnings		3,658			-			(10,686	)
Changes in unrecognized tax benefits		2,209			(3,334	)		(1,682	)
Equity-based compensation		(5,496	)		(3,482	)		(1,776	)
Nondeductible goodwill impairment		-			7,264			-
Other		(4,502	)		2,608			4,857
Provision for Income Tax Expense	$	198,395		$	169,651		$	114,333
Effective Income Tax Rate		25.2	%		26.1	%		18.8	%

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)	2024			2023			2022
Balance at June 1	$	2.9		$	5.7		$	7.5
Additions for tax positions of prior years		3.4			0.1			-
Reductions for tax positions of prior years		(1.4	)		(2.8	)		(1.7	)
Settlements		(0.5	)		-			-
Foreign currency translation		-			(0.1	)		(0.1	)
Balance at May 31	$	4.4		$	2.9		$	5.7