Income Taxes (Tables)

12 Months Ended

Jul. 31, 2018

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)	2018			2017		2016
Current:
Federal	$	197		$	345	$	401
State	38			36		33
Foreign	14			8		13
Total current	249			389		447
Deferred:
Federal	44			4		(42		)
State	(1		)	1		(7		)
Foreign	—			2		(1		)
Total deferred	43			7		(50		)
Total provision for income taxes from continuing operations	$	292		$	396	$	397

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)	2018		2017		2016
United States	$	1,464	$	1,362	$	1,205
Foreign	39		5		(2		)
Total	$	1,503	$	1,367	$	1,203

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 and the provision for income taxes from continuing operations were as follows for the periods indicated:



	Twelve Months Ended July 31,
(In millions)	2018			2017			2016
Income from continuing operations before income taxes	$	1,503		$	1,367		$	1,203

Statutory federal income tax	$	404		$	479		$	421
State income tax, net of federal benefit	27			24			17
Federal research and experimentation credits	(38		)	(24		)	(33		)
Domestic production activities deduction	(28		)	(34		)	(34		)
Share-based compensation	11			14			16
Federal excess tax benefits related to share-based compensation	(94		)	(69		)	—
2017 Tax Act - Deferred tax re-measurement	43			—			—
Capital loss on subsidiary reorganization	(35		)	—			—
Effects of non-U.S. operations	1			5			11
Other, net	1			1			(1		)
Total provision for income taxes from continuing operations	$	292		$	396		$	397

Components of deferred tax assets and liabilities

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



	July 31,
(In millions)	2018			2017
Deferred tax assets:
Accruals and reserves not currently deductible	$	12		$	35
Deferred revenue	46			74
Deferred rent	8			13
Accrued and deferred compensation	41			62
Loss and tax credit carryforwards	97			71
Share-based compensation	49			70
Other, net	4			14
Total gross deferred tax assets	257			339
Valuation allowance	(93		)	(64		)
Total deferred tax assets	164			275
Deferred tax liabilities:
Intangible assets	65			93
Property and equipment	19			57
Total deferred tax liabilities	84			150
Net deferred tax assets	$	80		$	125

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)	2018			2017
Long-term deferred income taxes	$	87		$	132
Long-term deferred income taxes included in other long-term obligations	(7		)	(7		)
Net deferred tax assets	$	80		$	125

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)	2018			2017			2016
Gross unrecognized tax benefits, beginning balance	$	61		$	60		$	56
Increases related to tax positions from prior fiscal years, including acquisitions	10			8			7
Decreases related to tax positions from prior fiscal years	(3		)	(8		)	(7		)
Increases related to tax positions taken during current fiscal year	23			9			15
Settlements with tax authorities	(1		)	(8		)	(11		)
Gross unrecognized tax benefits, ending balance	$	90		$	61		$	60