Income Taxes

6 Months Ended

Nov. 30, 2024

Income Tax Disclosure [Abstract]

Income Taxes

Note 10 – Income Taxes

The Company’s effective income tax rate was 22.2% and 29.9% for the second quarter of fiscal 2025 and 2024, respectively, and 15.6% and 21.6% for the six months ended November 30, 2024 and November 30, 2023, respectively. The effective tax rates for the second quarter of fiscal 2024 and six months ended November 30, 2023 differed from the statutory rates primarily due to discrete items related to equity compensation, non-deductible executive compensation, and non-deductible expenses in foreign jurisdictions. The effective tax

rate for the second quarter of fiscal 2025 differed from the statutory rate primarily due to discrete tax items recognized in the quarter related to foreign tax credits. The effective tax rate for the six months ended November 30, 2024 differed from the statutory rate primarily due to recognizing a discrete for pre-acquisition tax matter at Tempel.

The provision for income taxes is based on a current estimate of the annual effective income tax rate adjusted to reflect the impact of discrete items and excludes any impact from the inclusion of net earnings attributable to noncontrolling interests in the consolidated and combined statements of earnings. Net earnings attributable to noncontrolling interests are a result of the Company’s consolidated joint ventures. The net earnings attributable to the noncontrolling interests in the U.S. operations of the Company’s consolidated joint ventures do not generate tax expense to the Company since the investors are taxed directly based on the earnings attributable to the investors. The tax expense of TWB’s wholly owned foreign subsidiaries is reported in the consolidated and combined income tax expense. Management is required to estimate the annual effective income tax rate based upon its forecast of annual pre-tax income for domestic and foreign operations. The Company’s actual effective income tax rate for fiscal 2025 could be materially different from the forecasted rate as of November 30, 2024.