XML 91 R38.htm IDEA: XBRL DOCUMENT
v3.21.2

INCOME TAXES (Tables) | 12 Months Ended
--- | ---
Jun. 30, 2021
Income Tax Disclosure [Abstract] |
Provision for income taxes | The provision for income taxes is comprised of the following:
|  | Year Ended June 30
(In millions) |  | 2021 |  | 2020 |  | 2019
Current: |  |  |  |  |  |
Federal |  | $ | 197 |  |  | $ | 128 |  |  | $ | 180 |
Foreign |  | 479 |  |  | 368 |  |  | 383 |
State and local |  | 10 |  |  | (3) |  |  | 16 |
|  | 686 |  |  | 493 |  |  | 579 |
Deferred: |  |  |  |  |  |
Federal |  | (129) |  |  | (93) |  |  | (95) |
Foreign |  | (100) |  |  | (49) |  |  | 27 |
State and local |  | (1) |  |  | (1) |  |  | 2 |
|  | (230) |  |  | (143) |  |  | (66) |
|  | $ | 456 |  |  | $ | 350 |  |  | $ | 513 |
Reconciliation of the U.S. federal statutory income tax rate and actual effective tax rate on earnings before income taxes | A reconciliation of the U.S. federal statutory income tax rate to the Company’s actual effective tax rate on earnings before income taxes is as follows:
|  | Year Ended June 30
|  | 2021 |  | 2020 |  | 2019
Provision for income taxes at statutory rate |  | 21.0 | % |  | 21.0 | % |  | 21.0 | %
Increase (decrease) due to: |  |  |  |  |  |
State and local income taxes, net of federal tax benefit |  | 0.5 |  |  | (0.1) |  |  | 0.6 |
TCJA net income tax impact |  | — |  |  | — |  |  | 0.2 |
Stock-based compensation arrangements – excess tax benefits, net |  | (3.0) |  |  | (7.5) |  |  | (2.7) |
Previously held equity method investment gain - DECIEM(1) |  | (5.3) |  |  | — |  |  | — |
GILTI - High-Tax Exception election (adjustment for prior years) |  | (1.4) |  |  | — |  |  | — |
Taxation of foreign operations |  | 1.8 |  |  | 11.0 |  |  | 1.9 |
Income tax reserve adjustments |  | (0.2) |  |  | 0.4 |  |  | 0.5 |
Nondeductible goodwill impairment charges |  | 0.1 |  |  | 8.0 |  |  | 0.6 |
Other, net |  | 0.2 |  |  | 0.7 |  |  | 0.1 |
Effective tax rate(2) |  | 13.7 | % |  | 33.5 | % |  | 22.2 | %
(1)Included in Other income, net in the accompanying consolidated statements of earnings for the fiscal year ended June 30, 2021. (2)For fiscal 2021 and 2020, the reconciling items between the Company's U.S. federal statutory income tax rate and the Company's actual effective tax rate were materially impacted by the increase from fiscal 2020 to fiscal 2021 and the decrease from fiscal 2019 to fiscal 2020, respectively, in earnings before income taxes.
Significant components of deferred income tax assets and liabilities | Significant components of the Company’s deferred income tax assets and liabilities were as follows:
|  | June 30
(In millions) |  | 2021 |  | 2020
Deferred tax assets: |  |  |  |
Compensation-related expenses |  | $ | 210 |  |  | $ | 142 |
Inventory obsolescence and other inventory related reserves |  | 72 |  |  | 75 |
Retirement benefit obligations |  | 54 |  |  | 71 |
Various accruals not currently deductible |  | 239 |  |  | 212 |
Net operating loss, credit and other carryforwards |  | 169 |  |  | 98 |
Unrecognized state tax benefits and accrued interest |  | 12 |  |  | 12 |
Lease liabilities |  | 591 |  |  | 585 |
Other differences between tax and financial statement values(1) |  | 249 |  |  | 217 |
|  | 1,596 |  |  | 1,412 |
Valuation allowance for deferred tax assets |  | (168) |  |  | (107) |
Total deferred tax assets |  | 1,428 |  |  | 1,305 |
Deferred tax liabilities: |  |  |  |
Depreciation and amortization(2) |  | (504) |  |  | (563) |
ROU assets |  | (517) |  |  | (504) |
Partnership interest in DECIEM |  | (467) |  |  | — |
Other differences between tax and financial statement values(3) |  | (158) |  |  | (194) |
Total deferred tax liabilities |  | (1,646) |  |  | (1,261) |
Total net deferred tax assets (liabilities) |  | $ | (218) |  |  | $ | 44 |
(1)Includes accumulated deferred tax assets as of June 30, 2021 of $175 million associated with goodwill and other intangible asset impairment charges related to the Company's taxable acquisitions. (2)Includes deferred tax liabilities associated with book-to-tax basis differences related to the Company's taxable and non-taxable acquisitions. (3)Includes the deferred tax liability of $117 million associated with the fiscal 2020 gain on a previously held equity method investment.
Reconciliation of the beginning and ending amount of gross unrecognized tax benefits | A reconciliation of the beginning and ending amount of gross unrecognized tax benefits is as follows:
|  | June 30
(In millions) |  | 2021 |  | 2020 |  | 2019
Beginning of the year balance of gross unrecognized tax benefits |  | $ | 70 |  |  | $ | 67 |  |  | $ | 60 |
Gross amounts of increases as a result of tax positions taken during a prior period |  | 9 |  |  | 11 |  |  | 12 |
Gross amounts of decreases as a result of tax positions taken during a prior period |  | (10) |  |  | (9) |  |  | (6) |
Gross amounts of increases as a result of tax positions taken during the current period |  | 8 |  |  | 7 |  |  | 9 |
Amounts of decreases in unrecognized tax benefits relating to settlements with taxing authorities |  | (13) |  |  | (4) |  |  | (7) |
Reductions to unrecognized tax benefits as a result of a lapse of the applicable statutes of limitations |  | (2) |  |  | (2) |  |  | (1) |
End of year balance of gross unrecognized tax benefits |  | $ | 62 |  |  | $ | 70 |  |  | $ | 67 |
Tax years that remain subject to examination vary by the major tax jurisdictions | The tax years subject to examination vary depending on the tax jurisdiction. As of June 30, 2021, the following tax years remain subject to examination by the major tax jurisdictions indicated:
Major Jurisdiction |  | Open Fiscal Years
Belgium |  | 2019 – 2021
Canada |  | 2016 – 2021
China |  | 2019 – 2021
France |  | 2019 – 2021
Germany |  | 2017 – 2021
Hong Kong |  | 2015 – 2021
Italy |  | 2016 – 2021
Japan |  | 2020 – 2021
Korea |  | 2019 - 2021
Russia |  | 2020 – 2021
Spain |  | 2016 – 2021
Switzerland |  | 2020 – 2021
United Kingdom |  | 2020 – 2021
United States |  | 2020 – 2021
State of California |  | 2014 – 2021
State and City of New York |  | 2017 – 2021

X
- References No definition available. + Details
Name: | us-gaap_IncomeTaxDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition Tabular disclosure of the components of income tax expense attributable to continuing operations for each year presented including, but not limited to: current tax expense (benefit), deferred tax expense (benefit), investment tax credits, government grants, the benefits of operating loss carryforwards, tax expense that results from allocating certain tax benefits either directly to contributed capital or to reduce goodwill or other noncurrent intangible assets of an acquired entity, adjustments of a deferred tax liability or asset for enacted changes in tax laws or rates or a change in the tax status of the entity, and adjustments of the beginning-of-the-year balances of a valuation allowance because of a change in circumstances that causes a change in judgment about the realizability of the related deferred tax asset in future years. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32639-109319 + Details
Name: | us-gaap_ScheduleOfComponentsOfIncomeTaxExpenseBenefitTableTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Definition Tabular disclosure of the components of net deferred tax asset or liability recognized in an entity's statement of financial position, including the following: the total of all deferred tax liabilities, the total of all deferred tax assets, the total valuation allowance recognized for deferred tax assets. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32537-109319 + Details
Name: | us-gaap_ScheduleOfDeferredTaxAssetsAndLiabilitiesTableTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Definition Tabular disclosure of the reconciliation using percentage or dollar amounts of the reported amount of income tax expense attributable to continuing operations for the year to the amount of income tax expense that would result from applying domestic federal statutory tax rates to pretax income from continuing operations. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 12 -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32687-109319 + Details
Name: | us-gaap_ScheduleOfEffectiveIncomeTaxRateReconciliationTableTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- 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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15A -URI http://asc.fasb.org/extlink&oid=121826272&loc=SL6600010-109319 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -Subparagraph (d) -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32718-109319 Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 19 -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32840-109319 + Details
Name: | us-gaap_SummaryOfIncomeTaxContingenciesTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Definition Tabular disclosure of income tax examinations that an enterprise is currently subject to or that have been completed in the current period typically including a description of the examination, the jurisdiction conducting the examination, the tax year(s) under examination, the likelihood of an unfavorable settlement, the range of possible losses, the liability recorded, the increase or decrease in the liability from the prior period, and any penalties and interest that have been recorded. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32718-109319 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 55 -Paragraph 217 -URI http://asc.fasb.org/extlink&oid=124434304&loc=d3e36027-109320 + Details
Name: | us-gaap_SummaryOfIncomeTaxExaminationsTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration