INCOME TAXES (Tables)

12 Months Ended

Jun. 30, 2017

Provision for Income Taxes on Continuing Operations by Tax Jurisdiction

The provision for income taxes on continuing operations, by tax jurisdiction, consisted of the following for the fiscal years ended June 30:



	2017			2016			2015
Current
Federal	$	291		$	254		$	265
State	36			31			28
Foreign	38			45			38
Total current	365			330			331
Deferred
Federal	(29		)	11			(13		)
State	(2		)	1			(1		)
Foreign	(4		)	(7		)	(2		)
Total deferred	(35		)	5			(16		)
Total	$	330		$	335		$	315

Earnings from Continuing Operations before Income Taxes, by Tax Jurisdiction

The components of earnings from continuing operations before income taxes, by tax jurisdiction, consisted of the following for the fiscal years ended June 30:



	2017		2016		2015
United States	$	927	$	900	$	829
Foreign	106		83		92
Total	$	1,033	$	983	$	921

Tax Rate Reconciliation

A reconciliation of the statutory federal income tax rate to the Company’s effective tax rate on continuing operations follows for the fiscal years ended June 30:



	2017		2016		2015
Statutory federal tax rate	35.0	%	35.0	%	35.0	%
State taxes (net of federal tax benefits)	2.2		2.1		2.1
Tax differential on foreign earnings	(0.6	)	0.5		(0.3	)
Federal domestic manufacturing deduction	(2.6	)	(2.4	)	(2.1	)
Change in valuation allowance	0.2		0.5		0.6
Federal excess tax benefits	(2.0	)	—		—
Other differences	(0.3	)	(1.6	)	(1.1	)
Effective tax rate	31.9	%	34.1	%	34.2	%

Components of Net Deferred Tax Assets (Liabilities)

The components of net deferred tax assets (liabilities) as of June 30 are shown below:



	2017			2016
Deferred tax assets (a)
Compensation and benefit programs	$	182		$	193
Basis difference related to Venture Agreement	30			30
Accruals and reserves	41			34
Inventory costs	25			21
Net operating loss and tax credit carryforwards	52			48
Other	54			54
Subtotal	384			380
Valuation allowance	(40		)	(37		)
Total deferred tax assets	344			343
Deferred tax liabilities (a)
Fixed and intangible assets	(311		)	(325		)
Low-income housing partnerships	(25		)	(23		)
Unremitted foreign earnings	(7		)	(16		)
Other	(24		)	(25		)
Total deferred tax liabilities	(367		)	(389		)
Net deferred tax assets (liabilities)	$	(23	)	$	(46	)

^(a) In fiscal year 2016, the Company prospectively adopted ASU No. 2015-17, "Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes," requiring all deferred tax assets and liabilities to be classified as noncurrent.

Summary of Changes in Deferred Tax Asset Valuation Allowance

Details of the valuation allowance were as follows as of June 30:



	2017			2016
Valuation allowance at beginning of year	$	(37	)	$	(34	)
Net decrease/(increase) for other foreign deferred tax assets	—			3
Net decrease/(increase) for foreign net operating loss carryforwards and tax credits	(3		)	(6		)
Valuation allowance at end of year	$	(40	)	$	(37	)

Reconciliation of Gross Unrecognized Tax Benefits

The following is a reconciliation of the beginning and ending amounts of the Company’s gross unrecognized tax benefits:



	2017			2016			2015
Unrecognized tax benefits at beginning of year	$	37		$	38		$	71
Gross increases - tax positions in prior periods	1			3			3
Gross decreases - tax positions in prior periods	(6		)	(3		)	(8		)
Gross increases - current period tax positions	9			8			6
Gross decreases - current period tax positions	—			—			—
Lapse of applicable statute of limitations	(1		)	(4		)	(34		)
Settlements	—			(5		)	—
Unrecognized tax benefits at end of year	$	40		$	37		$	38