Income Taxes (Tables)

12 Months Ended

May 31, 2023

Income Tax Disclosure [Abstract]

Components of Income Before Income Taxes

Income before income taxes consists of the following components for the fiscal years ended May 31:

(In thousands)	2023		2022		2021
U.S. operations	$	1,632,391	$	1,445,719	$	1,221,690
Foreign operations	60,757		53,049		66,059
	$	1,693,148	$	1,498,768	$	1,287,749

Components of Income Taxes

Income tax expense (benefit) consists of the following components for the fiscal years ended May 31:

(In thousands)	2023		2022		2021
Current:
Federal	$	248,413	$	162,269	$	164,104
State and local	56,589		32,431		42,340
Foreign	13,205		16,676		12,417
	318,207		211,376		218,861
Deferred	26,931		51,635		(42,080)
	$	345,138	$	263,011	$	176,781

Reconciliation of Income Tax Expense Using the Statutory Rate and Actual Income Tax Expense

Reconciliation of income tax expense using the statutory rate and actual income tax expense is as follows for the fiscal years ended May 31:

(In thousands)	2023		2022		2021
Income taxes at the U.S. federal statutory rate	$	355,561	$	314,741	$	270,427
Permanent differences (1)	(59,502)		(85,413)		(101,870)
State and local income taxes, net of federal benefit	46,245		33,547		27,304
Capital loss carryback	—		—		(14,072)
Other	2,834		136		(5,008)
	$	345,138	$	263,011	$	176,781

(1)    Primarily consists of the excess tax benefits related to stock-based compensation.

Components of Deferred Income Taxes

The components of deferred income taxes included on the consolidated balance sheets are as follows at May 31:

(In thousands)	2023		2022
Deferred tax assets:
Reserves related to accounts receivable	$	12,562	$	10,928
Inventory reserves	22,822		28,020
Insurance reserves	45,153		45,237
Stock-based compensation	63,186		62,522
Operating lease liabilities	46,258		43,745
Deferred compensation and other	92,538		92,250
	282,519		282,702
Deferred tax liabilities:
Uniform and other rental items in service	248,883		226,510
Property and equipment	171,971		171,819
Intangibles and other amortizable assets	190,299		199,256
Treasury locks	32,830		31,566
Capitalized contract costs	88,056		81,314
Operating lease right-of-use assets	46,258		43,745
State taxes and other	2,578		2,269
	780,875		756,479
Net deferred tax liability	$	498,356	$	473,777

Reconciliation of Beginning and Ending Amount of Gross Unrecognized Tax Benefits

A reconciliation of the beginning and ending amount of the gross unrecognized tax benefits (exclusive of interest and penalties) is as follows:

(In thousands)
Balance at June 1, 2021	$	42,457
Additions for tax positions of the current year	5,558
Additions for tax positions of prior years	3,093
Settlements	(7,352)
Statute expirations	(6,182)
Balance at May 31, 2022	37,574
Additions for tax positions of the current year	6,904
Additions for tax positions of prior years	6,821
Settlements	(12,937)
Statute expirations	(1,608)
Balance at May 31, 2023	$	36,754