Income Taxes (Tables)

12 Months Ended

May 31, 2021

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)	2021		2020		2019
Income before income taxes:
United States	$	5,723	$	2,954	$	593
Foreign	938		(67)		4,208
TOTAL INCOME BEFORE INCOME TAXES	$	6,661	$	2,887	$	4,801

Schedule of Components of Income Tax Expense (Benefit)

The provision for income taxes is as follows:

	YEAR ENDED MAY 31,
(Dollars in millions)	2021		2020		2019
Current:
United States
Federal	$	328	$	(109)	$	74
State	134		81		56
Foreign	857		756		608
Total Current	1,319		728		738
Deferred:
United States
Federal	(371)		(231)		(33)
State	(34)		(47)		(9)
Foreign	20		(102)		76
Total Deferred	(385)		(380)		34
TOTAL INCOME TAX EXPENSE	$	934	$	348	$	772

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,
	2021		2020		2019
Federal income tax rate	21.0	%	21.0	%	21.0	%
State taxes, net of federal benefit	1.3	%	0.8	%	1.0	%
Foreign earnings	0.2	%	5.9	%	-1.1	%
Foreign-derived intangible income benefit	-3.7	%	-8.1	%	—	%
Excess tax benefits from share-based compensation	-4.5	%	-7.2	%	-3.6	%
Income tax audits and contingency reserves	1.5	%	-1.4	%	1.3	%
U.S. research and development tax credit	-0.9	%	-1.8	%	-1.0	%
Other, net	-0.9	%	2.9	%	-1.5	%
EFFECTIVE INCOME TAX RATE	14.0	%	12.1	%	16.1	%

Schedule of Deferred Tax Assets and Liabilities

Deferred tax assets and liabilities comprise the following as of: 

	MAY 31,
(Dollars in millions)	2021		2020
Deferred tax assets:
Inventories(1)	$	78	$	84
Sales return reserves(1)	100		115
Deferred compensation(1)	350		295
Stock-based compensation	175		168
Reserves and accrued liabilities(1)	96		120
Operating lease liabilities	499		491
Intangibles	187		—
Capitalized research and development expenditures	349		189
Net operating loss carry-forwards(1)	15		21
Other(1)	178		127
Total deferred tax assets	2,027		1,610
Valuation allowance(1)	(12)		(26)
Total deferred tax assets after valuation allowance	2,015		1,584
Deferred tax liabilities:
Foreign withholding tax on undistributed earnings of foreign subsidiaries	(182)		(165)
Property, plant and equipment(1)	(255)		(232)
Right-of-use assets	(431)		(423)
Other(1)	(14)		(32)
Total deferred tax liabilities	(882)		(852)
NET DEFERRED TAX ASSET	$	1,133	$	732

(1)The above amounts exclude deferred taxes held-for-sale as of May 31, 2021 and 2020. See Note 20 — Acquisitions and Divestitures for additional information.

Unrecognized Tax Benefits Reconciliation

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

	MAY 31,
(Dollars in millions)	2021		2020		2019
Unrecognized tax benefits, beginning of the period	$	771	$	808	$	698
Gross increases related to prior period tax positions	77		181		85
Gross decreases related to prior period tax positions	(22)		(171)		(32)
Gross increases related to current period tax positions	59		50		81
Settlements	(5)		(58)		—
Lapse of statute of limitations	(6)		(28)		(35)
Changes due to currency translation	22		(11)		11
UNRECOGNIZED TAX BENEFITS, END OF THE PERIOD	$	896	$	771	$	808

Summary of Operating Loss Carryforwards

The Company has available domestic and foreign loss carry-forwards of $65 million as of May 31, 2021. If not utilized, such losses will expire as follows:

	YEAR ENDING MAY 31,
(Dollars in millions)	2022		2023		2024		2025		2026-2041		INDEFINITE		TOTAL
Net operating losses	$	—	$	—	$	—	$	—	$	42	$	23	$	65