Income Taxes (Tables)

12 Months Ended

Jun. 30, 2018

Income Tax Disclosure [Abstract]

Schedule of Income Before Income Tax, Domestic and Foreign

The following table summarizes earnings/(loss) before income taxes:

(in millions)	2018			2017		2016
U.S. operations	$	391		$	1,772	$	2,050
Non-U.S. operations	(619		)	152		226
Earnings/(loss) before income taxes	$	(228	)	$	1,924	$	2,276

Schedule of Components of Income Tax Expense (Benefit), Current and Deferred

The following table summarizes the components of provision for/(benefit from) income taxes:

(in millions)	2018			2017			2016
Current:
Federal	$	341		$	273		$	633
State and local	41			10			52
Non-U.S.	143			56			73
Total current	$	525		$	339		$	758
Deferred:
Federal	$	(1,003	)	$	258		$	96
State and local	16			37			12
Non-U.S.	(25		)	(4		)	(21		)
Total deferred	(1,012		)	291			87
Provision for/(benefit from) income taxes	$	(487	)	$	630		$	845

Schedule of Effective Income Tax Rate Reconciliation

The following table presents a reconciliation of the provision based on the federal statutory income tax rate to our effective income tax rate:

	2018 (1)		2017 (2)		2016 (2)
Provision at Federal statutory rate	28.1	%	35.0	%	35.0	%
State and local income taxes, net of federal benefit	(16.0	)	1.0		1.5
Foreign tax rate differential	(48.4	)	(7.3	)	(0.6	)
Nondeductible/nontaxable items	(10.2	)	0.2		1.0
Goodwill impairment	(124.7	)	—		—
Tax Act	410.9		—		—
Capital loss	71.4		—		—
Change in valuation allowances	(76.9	)	7.7		0.1
Foreign tax credits	27.3		(1.6	)	(0.1	)
China tax related to divestiture	(25.8	)	—		—
Other	(21.9	)	(2.3	)	0.2
Effective income tax rate	213.8	%	32.7	%	37.1	%

Schedule of Deferred Tax Assets and Liabilities

The following table presents the components of the deferred income tax assets and liabilities at June 30:

(in millions)	2018			2017
Deferred income tax assets:
Receivable basis difference	$	41		$	42
Accrued liabilities	110			125
Share-based compensation	40			53
Loss and tax credit carryforwards	526			378
Deferred tax assets related to uncertain tax positions	30			51
Other	101			43
Total deferred income tax assets	848			692
Valuation allowance for deferred income tax assets	(412		)	(237		)
Net deferred income tax assets	$	436		$	455
Deferred income tax liabilities:
Inventory basis differences	$	(1,103	)	$	(1,578	)
Property-related	(176		)	(183		)
Goodwill and other intangibles	(934		)	(570		)
Total deferred income tax liabilities	$	(2,213	)	$	(2,331	)
Net deferred income tax liability	$	(1,777	)	$	(1,876	)

Schedule of Deferred Tax Assets and Liabilities after Netting by Tax Jurisdiction

Deferred income tax assets and liabilities in the preceding table, after netting by taxing jurisdiction, are in the following captions in the consolidated balance sheets at June 30:

(in millions)	2018			2017
Noncurrent deferred income tax asset (1)	37			73
Noncurrent deferred income tax liability (2)	(1,814		)	(1,949		)
Net deferred income tax liability	$	(1,777	)	$	(1,876	)

(1) Included in other assets in the consolidated balance sheets.

(2) Included in deferred income taxes and other liabilities in the consolidated balance sheets.

Schedule of Unrecognized Tax Benefits Roll Forward

sheets. The following table presents a reconciliation of the beginning and ending amounts of unrecognized tax benefits:

(in millions)	2018			2017			2016
Balance at beginning of fiscal year	$	417		$	527		$	542
Additions for tax positions of the current year	15			29			22
Additions for tax positions of prior years (1)	141			23			42
Reductions for tax positions of prior years	(40		)	(8		)	(48		)
Settlements with tax authorities (1)	(99		)	(154		)	(30		)
Expiration of the statute of limitations (1)	(11		)	—			(1		)
Balance at end of fiscal year	$	423		$	417		$	527

(1) Included in additions for tax positions of prior years is $110 million related to exposures acquired as part of the Patient Recovery Business for which we are indemnified. Settlements of $81 million related to the Patient Recovery Business as well as $11 million of statute expirations.