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Income Taxes (Tables)
12 Months Ended
May 31, 2021
Income Tax Disclosure [Abstract]  
Income before Income Taxes

Income before income taxes as shown in the Consolidated Statements of Income is summarized below for the periods indicated.

 

Year Ended May 31,

 

2021

 

 

2020

 

 

2019

 

(In thousands)

 

 

 

 

 

 

 

 

 

 

 

 

United States

 

$

462,468

 

 

$

317,290

 

 

$

215,201

 

Foreign

 

 

205,970

 

 

 

90,474

 

 

 

124,644

 

Income Before Income Taxes

 

$

668,438

 

 

$

407,764

 

 

$

339,845

 

Provision (Benefit) for Income Tax

Provision (benefit) for income taxes consists of the following for the periods indicated:

 

Year Ended May 31,

 

2021

 

 

2020

 

 

2019

 

(In thousands)

 

 

 

 

 

 

 

 

 

 

 

 

Current:

 

 

 

 

 

 

 

 

 

 

 

 

U.S. federal

 

$

60,666

 

 

$

65,195

 

 

$

20,388

 

State and local

 

 

18,959

 

 

 

17,743

 

 

 

8,623

 

Foreign

 

 

65,125

 

 

 

31,894

 

 

 

37,713

 

Total Current

 

 

144,750

 

 

 

114,832

 

 

 

66,724

 

Deferred:

 

 

 

 

 

 

 

 

 

 

 

 

U.S. federal

 

 

20,027

 

 

 

(19,212

)

 

 

15,298

 

State and local

 

 

3,878

 

 

 

(3,031

)

 

 

1,414

 

Foreign

 

 

(3,717

)

 

 

10,093

 

 

 

(11,278

)

Total Deferred

 

 

20,188

 

 

 

(12,150

)

 

 

5,434

 

Provision for Income Taxes

 

$

164,938

 

 

$

102,682

 

 

$

72,158

 

Significant Components of Deferred Income Tax Assets and Liabilities

The significant components of deferred income tax assets and liabilities as of May 31, 2021 and 2020 were as follows:

 

 

 

2021

 

 

2020

 

(In thousands)

 

 

 

 

 

 

 

 

Deferred income tax assets related to:

 

 

 

 

 

 

 

 

Inventories

 

$

12,189

 

 

$

12,341

 

Allowance for losses

 

 

-

 

 

 

4,294

 

Accrued compensation and benefits

 

 

24,637

 

 

 

14,686

 

Accrued other expenses

 

 

28,511

 

 

 

15,107

 

Deferred income and other long-term liabilities

 

 

22,859

 

 

 

22,030

 

Credit and net operating and capital loss carryforwards

 

 

65,091

 

 

 

65,994

 

Net unrealized loss on securities

 

 

9,189

 

 

 

16,892

 

Pension and other postretirement benefits

 

 

34,180

 

 

 

76,147

 

Total Deferred Income Tax Assets

 

 

196,656

 

 

 

227,491

 

Less: valuation allowances

 

 

(64,696

)

 

 

(66,855

)

Net Deferred Income Tax Assets

 

 

131,960

 

 

 

160,636

 

Deferred income tax (liabilities) related to:

 

 

 

 

 

 

 

 

Depreciation

 

 

(85,717

)

 

 

(70,588

)

Amortization of intangibles

 

 

(107,963

)

 

 

(109,926

)

Unremitted foreign earnings

 

 

(17,871

)

 

 

(8,781

)

Total Deferred Income Tax (Liabilities)

 

 

(211,551

)

 

 

(189,295

)

Deferred Income Tax Assets (Liabilities), Net

 

$

(79,591

)

 

$

(28,659

)

Reconciliation of Income Tax Expense (Benefit) Computed by Applying U.S. Statutory Federal Income Tax Rate against Income (Loss) before Income Taxes to Provision (Benefit) for Income Taxes

The following table reconciles income tax expense (benefit) computed by applying the U.S. statutory federal income tax rate against income (loss) before income taxes to the provision (benefit) for income taxes:

 

Year Ended May 31,

 

2021

 

 

2020

 

 

2019

 

(In thousands, except percentages)

 

 

 

 

 

 

 

 

 

 

 

 

Income tax expense at the U.S. statutory federal income tax rate

 

$

140,372

 

 

$

85,630

 

 

$

71,367

 

Foreign rate differential and other foreign tax adjustments

 

 

11,942

 

 

 

3,433

 

 

 

(1,571

)

State and local income taxes, net

 

 

18,625

 

 

 

11,651

 

 

 

7,224

 

Impact of GILTI provisions

 

 

1,598

 

 

 

3,051

 

 

 

5,772

 

Nondeductible business expense

 

 

616

 

 

 

2,005

 

 

 

2,259

 

Valuation allowance

 

 

(4,389

)

 

 

14,008

 

 

 

7,021

 

Deferred tax liability for unremitted foreign earnings

 

 

5,348

 

 

 

(5,527

)

 

 

-

 

Changes in unrecognized tax benefits

 

 

(1,847

)

 

 

1,292

 

 

 

(8,480

)

Other

 

 

1,324

 

 

 

(3,351

)

 

 

1,195

 

FY19 GILTI impact of issued regulations

 

 

-

 

 

 

(4,348

)

 

 

-

 

Equity-based compensation

 

 

(8,651

)

 

 

(5,162

)

 

 

(4,496

)

Transition tax liability

 

 

-

 

 

 

-

 

 

 

(1,868

)

Remeasurement of U.S. deferred income taxes

 

 

-

 

 

 

-

 

 

 

(6,265

)

Provision for Income Tax Expense

 

$

164,938

 

 

$

102,682

 

 

$

72,158

 

Effective Income Tax Rate

 

 

24.7

%

 

 

25.2

%

 

 

21.2

%

Activity Related to Unrecognized Tax Benefits

Uncertain income tax positions are accounted for in accordance with ASC 740.  The following table summarizes the activity related to unrecognized tax benefits:

 

(In millions)

 

2021

 

 

2020

 

 

2019

 

Balance at June 1

 

$

9.0

 

 

$

8.1

 

 

$

14.1

 

Additions based on tax positions related to current year

 

 

-

 

 

 

-

 

 

 

0.1

 

Additions for tax positions of prior years

 

 

-

 

 

 

2.0

 

 

 

2.0

 

Reductions for tax positions of prior years

 

 

(1.8

)

 

 

(0.9

)

 

 

(7.9

)

Foreign currency translation

 

 

0.3

 

 

 

(0.2

)

 

 

(0.2

)

Balance at May 31

 

$

7.5

 

 

$

9.0

 

 

$

8.1