Income Taxes

6 Months Ended

Nov. 30, 2025

Income Tax Disclosure [Abstract]

Income Taxes

Note 10 – Income Taxes

The Company’s effective income tax rate (“ETR”) was 18.2% and 22.2% for the second quarter of fiscal 2026 and fiscal 2025, respectively, and 24.0% and 15.6% for the six months ended November 30, 2025 and November 30, 2024, respectively.

The ETR for the second quarter of fiscal 2026 differed from the statutory rate primarily due to excess tax benefits from share-based compensation recognized in the quarter. The ETR for the six months ended November 30, 2025 differed from the statutory rate primarily due to non-deductible executive compensation and income from unconsolidated joint ventures outside the U.S. recognized net of tax.

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

The provision for income taxes is based on a current estimate of the annual ETR adjusted to reflect the impact of discrete items and excludes any impact from the inclusion of net earnings attributable to NCI in the consolidated statements of earnings. Net earnings attributable to noncontrolling interests primarily relate to the Company’s consolidated joint ventures. Earnings attributable to the noncontrolling interests in the U.S. operations of the Company’s consolidated joint ventures do not generate tax expense for the Company, as the joint venture investors are taxed directly based on their respective share of earnings. The tax expense of TWB’s wholly owned foreign subsidiaries and Sitem Group is reported in the consolidated income tax expense. Management is required to estimate the annual ETR based upon its forecast of annual pre-tax income for domestic and foreign operations. The Company’s actual ETR for fiscal 2026 could be materially different from the forecasted rate as of November 30, 2025.