Income Taxes

6 Months Ended

Nov. 30, 2025

Income Tax Disclosure [Abstract]

Income Taxes

NOTE 8 — INCOME TAXES

The effective income tax rate of 23.5% for the three months ended November 30, 2025, compares to the effective income tax rate of 13.9% for the three months ended November 30, 2024. The effective income tax rate of 23.5% for the six months ended November 30, 2025, compares to the effective income tax rate of 18.2% for the six months ended November 30, 2024.

The effective income tax rates for the three- and six-month periods ended November 30, 2025 and 2024, reflect variances from the 21% statutory rate due to the unfavorable impact of state and local income taxes, non-deductible business expenses, and the net tax on foreign subsidiary income resulting from the global intangible low-taxed income provisions, partially offset by tax benefits related to equity compensation and foreign tax credits.

Additionally, the effective income tax rate for the three- and six-month periods ended November 30, 2024, reflect a net $21.8 million favorable adjustment to our deferred income taxes associated with our U.S. foreign tax credit carryforwards. Further, the effective income tax rate for the six-month period ended November 30, 2024 reflects a favorable adjustment for incremental U.S. foreign tax credits associated with a distribution of historic foreign earnings that were previously not considered to be permanently reinvested. The distribution of such earnings was done in conjunction with the execution of global cash redeployment and debt optimization projects.

As of May 31, 2025, we had approximately $164.7 million of unremitted foreign earnings not considered permanently reinvested. There was no deferred tax liability for foreign withholding or income taxes, which may become payable if these earnings were remitted to us as dividends. As of November 30, 2025, these earnings have changed to $168.1 million and there continues to be no deferred tax liability associated with these earnings.

The Organization for Economic Co-operation and Development (“OECD”) proposed a framework comprised of rules and models, collectively referred to as Pillar Two (“P2”), that are designed to ensure that certain multi-national enterprises pay a minimum tax rate of 15% on reported profits arising in each jurisdiction where they operate. Although the OECD provided a framework for applying the minimum tax, individual countries have and may continue to enact P2 rules that are different than the OECD framework. While we continue to monitor P2 developments in individual countries, there have been no current year enactments to date that we anticipate will have a material impact on our Consolidated Financial Statements.

On July 4, 2025, the One Big Beautiful Bill Act (the “Act”) was enacted in the U.S. The Act includes significant changes to corporate income tax provisions. Included in the Act are certain changes including immediate expensing for most business assets acquired and the elimination of the requirement to capitalize and amortize domestic R&D expenditures, which we continue to evaluate.