Income Taxes (Tables)

12 Months Ended

Jul. 31, 2017

Income Tax Disclosure [Abstract]

Provision for income taxes from continuing operations

The provision for income taxes from continuing operations consisted of the following for the periods indicated:

	Twelve Months Ended July 31,
(In millions)	2017		2016			2015
Current:
Federal	$	345	$	401		$	253
State	36		33			20
Foreign	8		13			7
Total current	389		447			280
Deferred:
Federal	4		(42		)	14
State	1		(7		)	1
Foreign	2		(1		)	4
Total deferred	7		(50		)	19
Total provision for income taxes from continuing operations	$	396	$	397		$	299

Sources of income from continuing operations before the provision for income taxes

The sources of income from continuing operations before the provision for income taxes consisted of the following for the periods indicated:

	Twelve Months Ended July 31,
(In millions)	2017		2016			2015
United States	$	1,362	$	1,205		$	716
Foreign	5		(2		)	(4		)
Total	$	1,367	$	1,203		$	712

Differences between income taxes calculated using the federal statutory income tax rate and the provision for income taxes from continuing operations

Differences between income taxes calculated using the federal statutory income tax rate of 35% and the provision for income taxes from continuing operations were as follows for the periods indicated:

	Twelve Months Ended July 31,
(In millions)	2017			2016			2015
Income from continuing operations before income taxes	$	1,367		$	1,203		$	712
Statutory federal income tax	$	479		$	421		$	249
State income tax, net of federal benefit	24			17			15
Federal research and experimentation credits	(24		)	(33		)	(19		)
Domestic production activities deduction	(34		)	(34		)	(19		)
Stock-based compensation	14			16			15
Federal excess tax benefits related to stock-based compensation	(69		)	—			—
Effects of non-U.S. operations	5			11			12
Non-deductible goodwill	—			—			40
Other, net	1			(1		)	6
Total provision for income taxes from continuing operations	$	396		$	397		$	299

The state income tax line in the table above includes $3 million

Components of deferred tax assets and liabilities

Significant deferred tax assets and liabilities were as follows at the dates indicated:

	July 31,
(In millions)	2017			2016
Deferred tax assets:
Accruals and reserves not currently deductible	$	35		$	33
Deferred revenue	74			56
Deferred rent	13			14
Accrued and deferred compensation	62			55
Loss and tax credit carryforwards	71			51
Stock-based compensation	70			62
Other, net	14			11
Total gross deferred tax assets	339			282
Valuation allowance	(64		)	(40		)
Total deferred tax assets	275			242
Deferred tax liabilities:
Intangible assets	93			86
Property and equipment	57			24
Total deferred tax liabilities	150			110
Net deferred tax assets	$	125		$	132

Components of net deferred tax assets, net of valuation allowances

The components of total net deferred tax assets, net of valuation allowances, as shown on our balance sheets were as follows at the dates indicated:

	July 31,
(In millions)	2017			2016
Long-term deferred income taxes	$	132		$	139
Long-term deferred income taxes included in other long-term obligations	(7		)	(7		)
Net deferred tax assets	$	125		$	132

Aggregate changes in the balance of gross unrecognized tax benefits

The aggregate changes in the balance of our gross unrecognized tax benefits were as follows for the periods indicated:

	Twelve Months Ended July 31,
(In millions)	2017			2016			2015
Gross unrecognized tax benefits, beginning balance	$	60		$	56		$	40
Increases related to tax positions from prior fiscal years, including acquisitions	8			7			15
Decreases related to tax positions from prior fiscal years	(8		)	(7		)	(1		)
Increases related to tax positions taken during current fiscal year	9			15			5
Settlements with tax authorities	(8		)	(11		)	(3		)
Gross unrecognized tax benefits, ending balance	$	61		$	60		$	56