v3.25.2
INCOME TAXES (Tables)
 12 Months Ended
May 31, 2025
Income Tax Disclosure [Abstract]  
Schedule of Income before Income Tax, Domestic and Foreign
Income before income taxes is as follows:
YEAR ENDED MAY 31,
(Dollars in millions)
202520242023
Income before income taxes:
United States$3,220 $5,588 $4,663 
Foreign665 1,112 1,538 
TOTAL INCOME BEFORE INCOME TAXES$3,885 $6,700 $6,201 
Schedule of Components of Income Tax Expense
The provision for income taxes is as follows:
YEAR ENDED MAY 31,
(Dollars in millions)
202520242023
Current:
United States
Federal$358 $782 $430 
State121 201 184 
Foreign475 514 634 
Total Current954 1,497 1,248 
Deferred:
United States
Federal(135)(422)(162)
State(12)(61)(25)
Foreign(141)(14)70 
Total Deferred(288)(497)(117)
TOTAL INCOME TAX EXPENSE$666 $1,000 $1,131 
Schedule of Effective Income Tax Rate Reconciliation
A reconciliation from the U.S. statutory federal income tax rate to the effective income tax rate is as follows:
 YEAR ENDED MAY 31,
202520242023
Federal income tax rate21.0 %21.0 %21.0 %
State taxes, net of federal benefit2.0 %1.4 %1.5 %
Foreign earnings1.1 %-2.5 %1.7 %
U.S. tax regulations - foreign currency losses
-3.4 %0.0 %0.0 %
Foreign-derived intangible income benefit-5.3 %-4.8 %-6.1 %
Stock-based compensation
1.5 %-0.5 %-1.1 %
Income tax audits and contingency reserves2.7 %1.8 %1.0 %
U.S. research and development tax credit-2.1 %-2.1 %-1.2 %
Other, net-0.4 %0.6 %1.4 %
EFFECTIVE INCOME TAX RATE17.1 %14.9 %18.2 %
Schedule of Deferred Income Tax Assets and Liabilities
Deferred income tax assets and liabilities comprise the following as of: 
MAY 31,
(Dollars in millions)
20252024
Deferred tax assets:
Inventories
$98 $69 
Sales return reserves
205 125 
Deferred compensation
387 347 
Stock-based compensation285 290 
Reserves and accrued liabilities
143 113 
Operating lease liabilities458 474 
Intangibles217 236 
Capitalized research and development expenditures 923 878 
Net operating loss carry-forwards75 21 
Subpart F deferred tax315 409 
Other
212 214 
Total deferred tax assets3,318 3,176 
Valuation allowance(51)(29)
Total deferred tax assets after valuation allowance3,267 3,147 
Deferred tax liabilities:
Foreign withholding tax on undistributed earnings of foreign subsidiaries(119)(131)
Property, plant and equipment
(225)(290)
Right-of-use assets(377)(397)
Other
(4)(9)
Total deferred tax liabilities(725)(827)
NET DEFERRED TAX ASSET (1)
$2,542 $2,320 
(1)Of the total $2,542 million net deferred tax asset for the period ended May 31, 2025, $2,668 million was included within Deferred income taxes and other assets and $(126) million was included within Deferred income taxes and other liabilities on the Consolidated Balance Sheets. Of the total $2,320 million net deferred tax asset for the period ended May 31, 2024, $2,465 million was included within Deferred income taxes and other assets and $(145) million was included within Deferred income taxes and other liabilities on the Consolidated Balance Sheets.
Schedule of Unrecognized Tax Benefits Roll Forward
The following is a reconciliation of the changes in the gross balance of unrecognized tax benefits as of:
 MAY 31,
(Dollars in millions)
202520242023
Unrecognized tax benefits, beginning of the period$990 $936 $848 
Gross increases related to prior period tax positions11 35 95 
Gross decreases related to prior period tax positions
(10)(13)(17)
Gross increases related to current period tax positions
81 77 50 
Settlements(5)(22)(18)
Lapse of statute of limitations(45)(24)(7)
Changes due to currency translation4 1 (15)
UNRECOGNIZED TAX BENEFITS, END OF THE PERIOD$1,026 $990 $936