Income Taxes (Tables)

12 Months Ended

Jun. 30, 2019

Income Tax Disclosure [Abstract]

Schedule of Income Before Income Tax, Domestic and Foreign

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

(in millions)	2019		2018			2017
U.S. operations	$	1,478	$	391		$	1,772
Non-U.S. operations	273		(619		)	152
Earnings/(loss) before income taxes	$	1,751	$	(228	)	$	1,924

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)	2019			2018			2017
Current:
Federal	$	295		$	341		$	273
State and local	89			41			10
Non-U.S.	85			143			56
Total current	$	469		$	525		$	339
Deferred:
Federal	$	(28	)	$	(1,003	)	$	258
State and local	(37		)	16			37
Non-U.S.	(18		)	(25		)	(4		)
Total deferred	(83		)	(1,012		)	291
Provision for/(benefit from) income taxes	$	386		$	(487	)	$	630

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:

	2019 (1)		2018 (2)		2017 (1)
Provision at Federal statutory rate	21.0	%	28.1	%	35.0	%
State and local income taxes, net of federal benefit	0.9		(16.0	)	1.0
Tax effect of foreign operations	(0.7	)	(48.4	)	(7.3	)
Nondeductible/nontaxable items	2.5		(10.2	)	0.2
Goodwill impairment	—		(124.7	)	—
Tax Act	(0.8	)	410.9		—
Change in valuation allowances	4.5		(76.9	)	7.7
Foreign tax credits	(1.0	)	27.3		(1.6	)
China tax related to divestiture	—		(25.8	)	—
Legal entity reorganization	(3.6	)	71.4		—
Other	(0.7	)	(21.9	)	(2.3	)
Effective income tax rate	22.1	%	213.8	%	32.7	%

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)	2019			2018
Deferred income tax assets:
Receivable basis difference	$	35		$	41
Accrued liabilities	133			110
Share-based compensation	39			40
Loss and tax credit carryforwards	621			526
Deferred tax assets related to uncertain tax positions	30			30
Other	6			101
Total deferred income tax assets	864			848
Valuation allowance for deferred income tax assets	(542		)	(412		)
Net deferred income tax assets	$	322		$	436
Deferred income tax liabilities:
Inventory basis differences	$	(1,056	)	$	(1,103	)
Property-related	(171		)	(176		)
Goodwill and other intangibles	(808		)	(934		)
Total deferred income tax liabilities	$	(2,035	)	$	(2,213	)
Net deferred income tax liability	$	(1,713	)	$	(1,777	)

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)	2019			2018
Noncurrent deferred income tax asset (1)	$	36		$	37
Noncurrent deferred income tax liability (2)	(1,749		)	(1,814		)
Net deferred income tax liability	$	(1,713	)	$	(1,777	)

(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)	2019			2018			2017
Balance at beginning of fiscal year	$	423		$	417		$	527
Additions for tax positions of the current year	24			15			29
Additions for tax positions of prior years (1)	39			141			23
Reductions for tax positions of prior years	(5		)	(40		)	(8		)
Settlements with tax authorities (1)	(25		)	(99		)	(154		)
Expiration of the statute of limitations (1)	—			(11		)	—
Balance at end of fiscal year	$	456		$	423		$	417

(1) Included in fiscal 2018 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 fully indemnified. Also for fiscal 2018 are settlements of $81 million related to the Patient Recovery Business as well as $11 million of statute expirations.