Income Taxes

3 Months Ended

May 31, 2022

Income Tax Disclosure [Abstract]

Income Taxes

25. Income Taxes

We calculate the provision for income taxes during interim periods by applying an estimate of the forecasted annual effective tax rate for the full fiscal year to “ordinary” income or loss (pretax income or loss excluding discrete items) for the reporting period. Our provision for income taxes was a benefit of $8.5 million, or 40.2%, for the three months ended May 31, 2022 compared to expense of $1.4 million, or 0.8%, for the three months ended May 31, 2021. The current year-to-date loss before income taxes of $21.1 million resulted in an $8.5 million income tax benefit primarily due to the impact of losses from affiliates on the carrying amount of the partnership investment and changes in certain nondeductible equity and contingent liabilities.

The change in the provision for income taxes for the three months ended May 31, 2022 as compared to the three months ended May 31, 2021 was primarily due to year-over-year changes in book losses in certain jurisdictions for which no benefit can be recognized, changes in the impact of book income and losses of affiliates on the carrying amount of our partnership investment and changes in the mark-to-market gains and losses on certain contingent liabilities.

As of May 31, 2022 and February 28, 2022, total gross unrecognized tax benefits were $2.6 million. We recognize interest and penalties related to unrecognized tax benefits as a component of income tax expense. As of May 31, 2022 and February 28, 2022, the total amount of gross interest and penalties accrued was less than $0.1 million which is classified as other noncurrent liabilities in the Condensed Consolidated Balance Sheets.