Income Taxes (Tables)

12 Months Ended

Jun. 30, 2013

Schedule of earnings before income taxes and discontinued operations, Domestic and Foreign

Earnings before income taxes and discontinued operations are:



(in millions)	2013		2012		2011
U.S. Operations	$	651	$	1,514	$	1,299
Non-U.S. Operations	237		184		219
Earnings before income taxes and discontinued operations	$	888	$	1,698	$	1,518

Schedule of provision for income taxes from continuing operations, Current and Deferred

The provision for income taxes from continuing operations consists of the following:



(in millions)	2013			2012		2011
Current:
Federal	$	451		$	430	$	387
State and local	62			27		20
Non-U.S.	19			13		17
Total current	$	532		$	470	$	424

Deferred:
Federal	$	28		$	124	$	92
State and local	(5		)	28		29
Non-U.S.	(2		)	6		7
Total deferred	21			158		128
Provision for income taxes	$	553		$	628	$	552

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 from continuing operations:



	2013		2012		2011
Provision at Federal statutory rate	35.0	%	35.0	%	35.0	%
State and local income taxes, net of federal benefit	2.5		2.3		2.6
Foreign tax rate differential	(4.0	)	(2.2	)	(3.1	)
Nondeductible/nontaxable items	(0.5	)	—		0.6
Nondeductible goodwill impairment	33.2		—		—
Change in measurement of an uncertain tax position and impact of IRS settlements	(5.7	)	0.9		2.4
Other	1.8		1.0		(1.1	)
Effective income tax rate	62.3	%	37.0	%	36.4	%

Schedule of deferred income tax assets and liabilities

The following table presents the components of the deferred income tax assets and liabilities at June 30:



(in millions)	2013			2012
Deferred income tax assets:
Receivable basis difference	$	50		$	46
Accrued liabilities	115			107
Share-based compensation	66			90
Loss and tax credit carryforwards	158			120
Deferred tax assets related to uncertain tax positions	127			118
Other	82			85
Total deferred income tax assets	598			566
Valuation allowance for deferred income tax assets	(88		)	(86		)
Net deferred income tax assets	$	510		$	480

Deferred income tax liabilities:
Inventory basis differences	$	(1,160	)	$	(1,067	)
Property-related	(173		)	(180		)
Goodwill and other intangibles	(299		)	(146		)
Unremitted foreign earnings	—			(64		)
Other	(6		)	(5		)
Total deferred income tax liabilities	(1,638		)	(1,462		)
Net deferred income tax liability	$	(1,128	)	$	(982	)

Schedule of deferred tax assets and liabilites 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)	2013			2012
Current deferred income tax asset (1)	$	15		$	27
Noncurrent deferred income tax asset (2)	17			6
Current deferred income tax liability (3)	(908		)	(858		)
Noncurrent deferred income tax liability (4)	(252		)	(157		)
Net deferred income tax liability	$	(1,128	)	$	(982	)


(1)	Included in prepaid expenses and other in the consolidated balance sheets.


(2)	Included in other assets in the consolidated balance sheets.


(3)	Included in other accrued liabilities in the consolidated balance sheets.


(4)	Included in deferred income taxes and other liabilities in the consolidated balance sheets.

Schedule of unrecognized tax benefits, Roll Forward



(in millions)	2013			2012			2011
Balance at beginning of fiscal year	$	654		$	747		$	731
Additions for tax positions of the current year	22			16			16
Additions for tax positions of prior years	97			68			58
Reductions for tax positions of prior years	(30		)	(3		)	(20		)
Settlements with tax authorities	(93		)	(172		)	(36		)
Expiration of the statute of limitations	—			(2		)	(2		)
Balance at end of fiscal year	$	650		$	654		$	747