Income Taxes (Tables)

12 Months Ended

May 31, 2018

Income Tax Disclosure [Abstract]

Schedule of Income before Income Tax, Domestic and Foreign

Income before income taxes is as follows:

	Year Ended May 31,
(In millions)	2018		2017		2016
Income before income taxes:
United States	$	744	$	1,240	$	956
Foreign	3,581		3,646		3,667
TOTAL INCOME BEFORE INCOME TAXES	$	4,325	$	4,886	$	4,623

Schedule of Components of Income Tax Expense (Benefit)

The provision for income taxes is as follows:

	Year Ended May 31,
(In millions)	2018		2017			2016
Current:
United States
Federal	$	1,167	$	398		$	304
State	45		82			71
Foreign	533		439			568
Total	1,745		919			943
Deferred:
United States
Federal	595		(279		)	(57		)
State	25		(9		)	(16		)
Foreign	27		15			(7		)
Total	647		(273		)	(80		)
TOTAL INCOME TAX EXPENSE	$	2,392	$	646		$	863

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,
	2018		2017		2016
Federal income tax rate	29.2	%	35.0	%	35.0	%
State taxes, net of federal benefit	1.2	%	1.1	%	1.1	%
Foreign earnings	-18.4	%	-20.7	%	-18.2	%
Transition tax related to the Tax Act	43.3	%	—	%	—	%
Remeasurement of deferred tax assets and liabilities related to the Tax Act	3.7	%	—	%	—	%
Excess tax benefits from share-based compensation	-5.3	%	—	%	—	%
Resolution of a U.S. tax matter	—	%	-3.2	%	—	%
Other, net	1.6	%	1.0	%	0.8	%
EFFECTIVE INCOME TAX RATE	55.3	%	13.2	%	18.7	%

Schedule of Deferred Tax Assets and Liabilities

Deferred tax assets and liabilities comprise the following:

	As of May 31,
(In millions)	2018			2017
Deferred tax assets:
Inventories	$	73		$	90
Sales return reserves	104			130
Deferred compensation	250			348
Stock-based compensation	135			225
Reserves and accrued liabilities	102			88
Net operating loss carry-forwards	88			84
Foreign tax credit carry-forwards	—			208
Undistributed earnings of foreign subsidiaries	—			173
Other	106			106
Total deferred tax assets	858			1,452
Valuation allowance	(95		)	(82		)
Total deferred tax assets after valuation allowance	763			1,370
Deferred tax liabilities:
Foreign withholding tax on undistributed earnings of foreign subsidiaries	(155		)	—
Property, plant and equipment	(167		)	(254		)
Intangibles	(77		)	(90		)
Other	(26		)	(2		)
Total deferred tax liabilities	(425		)	(346		)
NET DEFERRED TAX ASSET	$	338		$	1,024

Unrecognized Tax Benefits Reconciliation

The following is a reconciliation of the changes in the gross balance of unrecognized tax benefits:

	As of May 31,
(In millions)	2018			2017			2016
Unrecognized tax benefits, beginning of the period	$	461		$	506		$	438
Gross increases related to prior period tax positions	19			31			49
Gross decreases related to prior period tax positions	(12		)	(163		)	(20		)
Gross increases related to current period tax positions	249			115			81
Settlements	—			(12		)	(13		)
Lapse of statute of limitations	(20		)	(21		)	(17		)
Changes due to currency translation	1			5			(12		)
UNRECOGNIZED TAX BENEFITS, END OF THE PERIOD	$	698		$	461		$	506

Summary of Operating Loss Carryforwards

The Company has available domestic and foreign loss carry-forwards of $289 million at May 31, 2018. Such losses will expire as follows:

	Year Ending May 31,
(In millions)	2019		2020		2021		2022		2023-2039		Indefinite		Total
Net operating losses	$	1	$	5	$	2	$	1	$	91	$	189	$	289