Income Taxes |
3 Months Ended |
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May 31, 2026 | |
| Income Tax Disclosure [Abstract] | |
| INCOME TAXES | INCOME TAXES Overview Our effective tax rate for the three months ended May 31, 2026, and May 31, 2025, was 11.6% and 14.3%, respectively. For the three months ended May 31, 2026, our effective tax rate was lower than the federal statutory rate of 21% largely due to the benefit of lower effective tax rates applicable to our foreign businesses, partially offset by (i) certain tax legislation updates, (ii) adjustments to tax attributes, and (iii) changes to valuation allowances. For the three months ended May 31, 2025, our effective tax rate was lower than the federal statutory rate of 21% largely due to (i) the benefit of lower effective tax rates applicable to our foreign businesses and (ii) a net income tax benefit recognized as a result of the resolution of various tax examinations and assessments related to prior periods. Tax Legislation OB3 Act On July 4, 2025, the OB3 Act was signed into U.S. law. The OB3 Act extends and modifies several provisions originally introduced under the Tax Cuts and Jobs Act of 2017, while also implementing additional changes to U.S. federal tax law. Key provisions of the OB3 Act include (i) the permanent extension of 100% bonus depreciation for qualifying assets, (ii) the elimination of the requirement to capitalize and amortize U.S.-based research and experimental expenditures, allowing for immediate expensing, (iii) changes to the limitation on the deductibility of interest expense, and (iv) modifications to the taxation of foreign earnings and other international income tax provisions. The OB3 Act contains multiple effective dates, with certain provisions taking effect beginning in calendar year 2025 and others phased in through calendar year 2027. We have performed an evaluation of the impact of the OB3 Act on our consolidated financial statements, including the effects on our annual effective tax rate, deferred tax assets and liabilities, and cash flows. Based on this analysis and activities performed in response to the legislation, there will be a negative impact on our effective tax rate for Fiscal 2027, primarily driven by modifications to the taxation of foreign earnings and other international income tax provisions. Pillar Two The OECD introduced a framework under Pillar Two which includes a 15% global minimum tax rate. Many jurisdictions in which we do business have started to enact laws implementing Pillar Two. We are monitoring these developments and currently do not believe these rules will have a material impact on our financial condition and/or consolidated results.
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