INCOME TAXES (Tables)

12 Months Ended

Jun. 30, 2024

Income Tax Disclosure [Abstract]

Provision for income taxes

The provision for income taxes is comprised of the following:

	Year Ended June 30
(In millions)	2024		2023		2022
Current:
Federal	$	185	$	141	$	219
Foreign	426		424		533
State and local	17		8		25
	628		573		777
Deferred:
Federal	(147)		(105)		(12)
Foreign	(111)		(77)		(136)
State and local	(7)		(4)		(1)
	(265)		(186)		(149)
	$	363	$	387	$	628

Reconciliation of the U.S. federal statutory income tax rate and actual effective tax rate on earnings before income taxes

A reconciliation of the U.S. federal statutory income tax rate to the Company’s actual effective tax rate on earnings before income taxes is as follows:

	Year Ended June 30
	2024		2023		2022
Provision for income taxes at statutory rate	21.0	%	21.0	%	21.0	%
Increase (decrease) due to:
State and local income taxes, net of federal tax benefit	1.1		0.3		0.7
Stock-based compensation arrangements – excess tax expense (benefits), net	3.0		(0.8)		(2.7)
Taxation of foreign operations	15.9		8.6		1.4
Income tax reserve adjustments	(0.4)		(0.1)		0.3
Nondeductible goodwill impairment charges	7.9		—		—
U.S. research and development tax credit	(2.2)		(0.9)		(0.3)
Other, net	0.7		(0.4)		0.3
Effective tax rate(1)	47.0	%	27.7	%	20.7	%

(1)For fiscal 2024 and fiscal 2023, the reconciling items between the Company's U.S. federal statutory income tax rate and the Company's actual effective tax rate were materially impacted by the decrease in earnings before income taxes from fiscal 2023 to fiscal 2024 and from fiscal 2022 to fiscal 2023, respectively.

Significant components of deferred income tax assets and liabilities

Significant components of the Company’s deferred income tax assets and liabilities were as follows:

	June 30
(In millions)	2024		2023
Deferred tax assets:
Compensation-related expenses	$	198	$	189
Inventory obsolescence and other inventory related reserves	103		75
Retirement benefit obligations	45		60
Various accruals not currently deductible	228		225
Net operating loss, credit and other carryforwards	405		225
Unrecognized state tax benefits and accrued interest	13		12
Lease liabilities	462		479
Research-related expenses	248		200
Other differences between tax and financial statement values	103		107
	1,805		1,572
Valuation allowance for deferred tax assets	(238)		(200)
Total deferred tax assets	1,567		1,372
Deferred tax liabilities:
Fixed assets and intangibles	(614)		(264)
ROU assets	(422)		(432)
Partnership interest in DECIEM	—		(404)
Other differences between tax and financial statement values	(32)		(32)
Total deferred tax liabilities	(1,068)		(1,132)
Total net deferred tax assets	$	499	$	240

Reconciliation of the beginning and ending amount of gross unrecognized tax benefits

A reconciliation of the beginning and ending amount of gross unrecognized tax benefits is as follows:

	June 30
(In millions)	2024		2023		2022
Beginning of the year balance of gross unrecognized tax benefits	$	63	$	61	$	62
Gross amounts of increases as a result of tax positions taken during a prior period	4		9		12
Gross amounts of decreases as a result of tax positions taken during a prior period	(4)		(5)		(6)
Gross amounts of increases as a result of tax positions taken during the current period	5		4		7
Amounts of decreases in unrecognized tax benefits relating to settlements with taxing authorities	(1)		(4)		(12)
Reductions to unrecognized tax benefits as a result of a lapse of the applicable statutes of limitations	(2)		(2)		(2)
End of year balance of gross unrecognized tax benefits	$	65	$	63	$	61

Tax years that remain subject to examination vary by the major tax jurisdictions

The tax years subject to examination vary depending on the tax jurisdiction. As of June 30, 2024, the following tax years remain subject to examination by the major tax jurisdictions indicated:

Major Jurisdiction	Open Fiscal Years
Belgium	2019 – 2024
Canada	2020 – 2024
China	2021 – 2024
France	2019 – 2024
Germany	2017 – 2024
Hong Kong	2018 – 2024
Italy	2019 – 2024
Japan	2020 – 2024
Korea	2021 - 2024
Spain	2018 – 2024
Switzerland	2020 – 2024
United Kingdom	2023 – 2024
United States	2023 – 2024
State of California	2018 – 2024
State and City of New York	2018 – 2024