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Income Taxes (Tables) | 12 Months Ended
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May 31, 2016
Income Tax Disclosure [Abstract] |
Schedule of Income before Income Tax, Domestic and Foreign | Income before income taxes is as follows:
|  | Year Ended May 31,
(In millions) |  | 2016 |  | 2015 |  | 2014
Income before income taxes: |  |  |  |  |  |
United States |  | $ | 956 |  |  | $ | 1,967 |  |  | $ | 3,066 |
Foreign |  | 3,667 |  |  | 2,238 |  |  | 478 |
TOTAL INCOME BEFORE INCOME TAXES |  | $ | 4,623 |  |  | $ | 4,205 |  |  | $ | 3,544 |
Schedule of Components of Income Tax Expense (Benefit) | The provision for income taxes is as follows:
|  | Year Ended May 31,
(In millions) |  | 2016 |  | 2015 |  | 2014
Current: |  |  |  |  |  |
United States |  |  |  |  |  |
Federal |  | $ | 304 |  |  | $ | 596 |  |  | $ | 259 |
State |  | 71 |  |  | 80 |  |  | 104 |
Foreign |  | 568 |  |  | 369 |  |  | 499 |
Total |  | 943 |  |  | 1,045 |  |  | 862 |
Deferred: |  |  |  |  |  |
United States |  |  |  |  |  |
Federal |  | (57 | ) |  | (66 | ) |  | 19 |
State |  | (16 | ) |  | (11 | ) |  | (3 | )
Foreign |  | (7 | ) |  | (36 | ) |  | (27 | )
Total |  | (80 | ) |  | (113 | ) |  | (11 | )
TOTAL INCOME TAX EXPENSE |  | $ | 863 |  |  | $ | 932 |  |  | $ | 851 |
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,
|  | 2016 |  | 2015 |  | 2014
Federal income tax rate |  | 35.0 | % |  | 35.0 | % |  | 35.0 | %
State taxes, net of federal benefit |  | 1.1 | % |  | 0.9 | % |  | 1.8 | %
Foreign earnings |  | -18.6 | % |  | -15.7 | % |  | 2.2 | %
Deferred charge |  | 0.4 | % |  | 0.9 | % |  | -14.6 | %
Other, net |  | 0.8 | % |  | 1.1 | % |  | -0.4 | %
EFFECTIVE INCOME TAX RATE |  | 18.7 | % |  | 22.2 | % |  | 24.0 | %
Schedule of Deferred Tax Assets and Liabilities | Deferred tax assets and liabilities comprise the following:
|  | As of May 31,
(In millions) |  | 2016 |  | 2015
Deferred tax assets: |  |  |  |
Allowance for doubtful accounts |  | $ | 5 |  |  | $ | 11 |
Inventories |  | 88 |  |  | 59 |
Sales return reserves |  | 182 |  |  | 143 |
Deferred compensation |  | 274 |  |  | 258 |
Stock-based compensation |  | 206 |  |  | 179 |
Reserves and accrued liabilities |  | 78 |  |  | 92 |
Net operating loss carry-forwards |  | 44 |  |  | 10 |
Undistributed earnings of foreign subsidiaries |  | 179 |  |  | 149 |
Other |  | 72 |  |  | 76 |
Total deferred tax assets |  | 1,128 |  |  | 977 |
Valuation allowance |  | (52 | ) |  | (9 | )
Total deferred tax assets after valuation allowance |  | 1,076 |  |  | 968 |
Deferred tax liabilities: |  |  |  |
Property, plant and equipment |  | (268 | ) |  | (220 | )
Intangibles |  | (92 | ) |  | (93 | )
Other |  | (4 | ) |  | (38 | )
Total deferred tax liability |  | (364 | ) |  | (351 | )
NET DEFERRED TAX ASSET |  | $ | 712 |  |  | $ | 617 |
Unrecognized Tax Benefits Reconciliation | The following is a reconciliation of the changes in the gross balance of unrecognized tax benefits:
|  | As of May 31,
(In millions) |  | 2016 |  | 2015 |  | 2014
Unrecognized tax benefits, beginning of the period |  | $ | 438 |  |  | $ | 506 |  |  | $ | 447 |
Gross increases related to prior period tax positions(1) |  | 49 |  |  | 32 |  |  | 814 |
Gross decreases related to prior period tax positions(1) |  | (20 | ) |  | (123 | ) |  | (166 | )
Gross increases related to current period tax positions |  | 81 |  |  | 82 |  |  | 125 |
Gross decreases related to current period tax positions |  | — |  |  | (9 | ) |  | (30 | )
Settlements(1) |  | (13 | ) |  | (27 | ) |  | (676 | )
Lapse of statute of limitations |  | (17 | ) |  | (10 | ) |  | (4 | )
Changes due to currency translation |  | (12 | ) |  | (13 | ) |  | (4 | )
UNRECOGNIZED TAX BENEFITS, END OF THE PERIOD |  | $ | 506 |  |  | $ | 438 |  |  | $ | 506 |
(1) | During the fourth quarter of the fiscal year ended May 31, 2014, the Company reached a resolution with the IRS on a U.S. Unilateral Advanced Pricing Agreement that covers intercompany transfer pricing for fiscal years 2011 through 2020. As a result, the Company recorded a gross increase in unrecognized tax benefits related to prior period tax positions, a gross decrease in unrecognized tax benefits related to prior period tax positions and a settlement. The net impact of these items resulted in a decrease to unrecognized tax benefits.
Summary of Operating Loss Carryforwards | The Company has available domestic and foreign loss carry-forwards of $143 million at May 31, 2016. Such losses will expire as follows:
|  | Year Ending May 31,
(In millions) |  | 2017 |  | 2018 |  | 2019 |  | 2020 |  | 2021-2035 |  | Indefinite |  |  | Total |
Net operating losses |  | $ | 1 |  |  | $ | 4 |  |  | $ | 1 |  |  | $ | 1 |  |  | $ | 35 |  |  | $ | 101 |  |  | $ | 143 |

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- Definition Tabular disclosure for tax positions taken in the tax returns filed or to be filed for which it is more likely than not that the tax position will not be sustained upon examination by taxing authorities and other income tax contingencies. Includes, but is not limited to, interest and penalties, reconciliation of unrecognized tax benefits, unrecognized tax benefits that would affect the effective tax rate, tax years that remain subject to examination by tax jurisdictions, and information about positions for which it is reasonably possible that amounts unrecognized will significantly change within 12 months. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15A -URI http://asc.fasb.org/extlink&oid=65882285&loc=SL6600010-109319 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -Subparagraph (d) -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32718-109319 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 19 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32840-109319 + Details
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