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Income Taxes
 12 Months Ended
Jun. 30, 2026
Income Tax Disclosure [Abstract]  
Income Taxes INCOME TAXES
Earnings before income taxes shown below are based on the geographic location to which such earnings are attributable.
Years ended June 30,202620252024
Earnings before income taxes:
United States$5,198.7 $4,825.6 $4,408.0 
Foreign531.6 484.5 464.3 
$5,730.3 $5,310.1 $4,872.3 
The provision (benefit) for income taxes consists of the following components:
Years ended June 30,202620252024
Current:
Federal$785.4 $880.5 $847.4 
Foreign217.2 136.0 132.8 
State157.9 176.9 177.5 
Total current1,160.5 1,193.4 1,157.7 
Deferred:
Federal160.1 0.7 (18.7)
Foreign(14.2)19.4 (6.6)
State10.4 16.9 (12.1)
Total deferred156.3 37.0 (37.4)
Total provision for income taxes$1,316.8 $1,230.4 $1,120.3 

A reconciliation between the Company's effective tax rate and the U.S. federal statutory rate is as follows:
Years ended June 30,2026%
U.S. Federal Statutory Tax Rate1,203.4 21.0 
Increase/(decrease) in provision from:
State and local income taxes, net of federal income tax effect (a)151.0 2.6 
Foreign tax effects82.8 1.5 
Effect of cross-border tax laws(50.7)(0.9)
Tax credits(43.5)(0.7)
Nontaxable or nondeductible items2.0 — 
Changes in unrecognized tax benefits(12.7)(0.2)
Other(15.5)(0.3)
$1,316.8 23.0 

(a) State taxes in California, New York, New Jersey, and Illinois, made up the majority (greater than 50 percent) of the tax effect in this category.

Differences between the U.S. statutory federal rate and the Company's effective income tax rate for periods prior to the adoption of ASU 2023-09 are as follows:
Years ended June 30,2025%2024%
Provision for taxes at U.S. statutory rate$1,115.1 21.0 $1,023.2 21.0 
Increase/(decrease) in provision from:
State taxes, net of federal tax benefit128.0 2.4 120.6 2.5 
Foreign rate differential39.0 0.7 41.0 0.9 
Excess tax benefit - Stock-based compensation(24.3)(0.4)(17.1)(0.4)
Other(27.4)(0.5)(47.4)(1.0)
$1,230.4 23.2 $1,120.3 23.0 
The effective tax rate in fiscal 2026 and 2025 was 23.0% and 23.2%, respectively. The decrease in the effective tax rate is primarily due to a decrease in uncertain tax positions and an increase in tax credits offset by a lower benefit for adjustments to prior year tax liabilities and a lower excess tax benefit on stock-based compensation for fiscal 2026 as compared to fiscal 2025.

The effective tax rate for fiscal 2025 and 2024 was 23.2% and 23.0%, respectively. The increase in the effective tax rate is primarily due to higher reserves for uncertain tax positions in fiscal 2025 and a valuation allowance release in fiscal 2024 offset by an increase in the excess tax benefit on stock-based compensation in fiscal 2025.

The significant components of deferred income tax assets and liabilities and their balance sheet classifications are as follows:
Years ended June 30,20262025
Deferred tax assets:
Accrued expenses not currently deductible$294.9 $256.7 
Stock-based compensation expense59.8 56.0 
Foreign tax credits9.6 8.8 
Fixed and intangible assets 80.7 216.8 
Net operating losses57.4 59.3 
Disallowed business interest expense carryforward— 30.9 
Unrealized investment losses, net106.1 98.4 
Other32.2 28.5 
640.7 755.4 
Less: valuation allowances(24.1)(23.8)
Deferred tax assets, net$616.6 $731.6 
Deferred tax liabilities:
Deferred contract costs$664.9 $654.0 
Prepaid expenses122.3 103.1 
Prepaid retirement benefits76.6 53.1 
Tax on unrepatriated earnings10.4 12.0 
Other17.3 16.9 
Deferred tax liabilities891.5 839.1 
Net deferred tax (liabilities)/assets$(274.9)$(107.5)

There are $64.2 million and $56.1 million of long-term deferred tax assets included in other assets on the Consolidated Balance Sheets at June 30, 2026 and 2025, respectively.

Income taxes have not been provided on undistributed earnings of certain foreign subsidiaries in an aggregate amount of approximately $55.5 million as the Company considers such earnings to be permanently reinvested outside of the United States. As of June 30, 2026, it is not practicable to estimate the unrecognized tax liability that would occur upon distribution.

The Company has estimated foreign net operating loss carry-forwards of approximately $173.5 million as of June 30, 2026, of which $18.8 million expire through the year ending June 30, 2046 and $154.7 million have an indefinite utilization period. As of June 30, 2026, the Company has approximately $24.0 million of federal net operating loss carry-forwards from acquired companies. The net operating losses have an annual utilization limitation pursuant to section 382 of the Internal Revenue Code, of which $8.7 million expire through the year ending June 30, 2036 and $15.3 million have an indefinite utilization period.

The Company has state net operating loss carry-forwards of approximately $140.0 million as of June 30, 2026, which expire through the year ending June 30, 2046. The Company has recorded valuation allowances of $24.1 million and $23.8 million at June 30, 2026 and 2025, respectively, to reflect the estimated amount of domestic and foreign deferred tax assets that may not be realized.
Years ended June 30,2026
U.S. Federal$672.5 
U.S. State167.9 
Foreign166.3 
Total income taxes paid$1,006.7 

Income tax payments were approximately $1,198.0 million and $1,185.2 million for fiscal 2025 and 2024, respectively.

As of June 30, 2026, 2025, and 2024 the Company's liabilities for unrecognized tax benefits, which include interest and penalties, were $152.5 million, $163.0 million, and $126.9 million, respectively. The amount that, if recognized, would impact the effective tax rate is $110.2 million, $119.0 million, and $91.8 million, respectively. The remainder, if recognized, would principally impact deferred taxes.

A reconciliation of the beginning and ending amounts of unrecognized tax benefits is as follows:
202620252024
Unrecognized tax benefits at beginning of the year$163.0 $126.9 $116.9 
Additions for tax positions28.2 29.5 17.2 
Additions for tax positions of prior periods33.6 26.7 17.8 
Reductions for tax positions of prior periods(47.6)(1.8)(12.8)
Settlement with tax authorities(18.1)(0.1)(9.0)
Expiration of the statute of limitations(5.1)(17.5)(2.9)
Impact of foreign exchange rate fluctuations(1.5)(0.7)(0.3)
Unrecognized tax benefit at end of year$152.5 $163.0 $126.9 

Interest expense and penalties associated with uncertain tax positions have been recorded in the provision for income taxes on the Statements of Consolidated Earnings. During the year ended June 30, 2026, the Company recorded interest benefit of $0.8 million. During the years ended June 30, 2025, and 2024, the Company recorded interest expense of $4.3 million, and $5.7 million, respectively. Penalties recorded during fiscal years 2026, 2025, and 2024 were not significant.

At June 30, 2026 and June 30, 2025, the Company had accrued interest of $27.6 million and $36.9 million, respectively, recorded on the Consolidated Balance Sheets within other liabilities. At June 30, 2026 and June 30, 2025, the Company had accrued penalties of $0.2 million and $0.3 million recorded on the Consolidated Balance Sheets within other liabilities.

The Company is routinely examined by the IRS and tax authorities in foreign countries in which it conducts business, as well as tax authorities in states in which it has significant business operations. The tax years currently under examination vary by jurisdiction. Examinations in progress in which the Company has significant business operations are as follows:
Taxing JurisdictionFiscal Years under Examination
U.S. (IRS)
2025 - 2026
Arizona
2016 - 2020
Massachusetts
2016 - 2023
Michigan
2020 - 2023
New Jersey
2020 - 2022
New York City
2022 - 2024
New York State
2022 - 2024
India
2014 - 2023
The Company regularly considers the likelihood of assessments resulting from examinations in each of the jurisdictions. The resolution of tax matters is not expected to have a material effect on the consolidated financial condition of the Company, although a resolution could have a material impact on the Company's Statements of Consolidated Earnings for a particular future period and on the Company's effective tax rate.