Income Taxes (Tables)

12 Months Ended

May 31, 2019

Schedule of Components of Provision for Income Taxes

The components of the provision for income taxes for the years ended May 31 were as follows (in millions):

	2019			2018			2017
Current provision (benefit)
Domestic:
Federal	$	(107	)	$	(540	)	$	269
State and local		64			43			88
Foreign		243			461			285
		200			(36	)		642
Deferred provision (benefit)
Domestic:
Federal		(61	)		271			989
State and local		(7	)		125			59
Foreign		(17	)		(579	)		(108	)
		(85	)		(183	)		940
	$	115		$	(219	)	$	1,582

Schedule of Reconciliation of Total Income Tax Expense and Amount Computed by Statutory Federal Income Tax Rate to Income Before Taxes

A reconciliation of total income tax expense and the amount computed by applying the statutory federal income tax rate (21% in 2019, 29.2% in 2018 and 35% in 2017) to income before taxes for the years ended May 31 is as follows (in millions):

	2019			2018			2017
Taxes computed at federal statutory rate	$	138		$	1,271		$	1,603
Increases (decreases) in income tax from:
Non-deductible expenses		79			81			76
Valuation allowance		(79	)		31			44
TCJA⁽¹⁾		(71	)		(1,354	)		—
Foreign tax rate enactments		50			6			—
State and local income taxes, net of federal benefit		44			119			99
Benefits from share-based payments		(18	)		(60	)		(55	)
Uncertain tax positions		8			86			—
Foreign tax credits from distributions		(8	)		(225	)		—
Foreign operations		(1	)		25			(5	)
Corporate structuring transactions⁽²⁾		—			(255	)		(68	)
Goodwill impairment charge		—			109			—
Other, net		(27	)		(53	)		(112	)
Provision for income taxes (benefit)	$	115		$	(219	)	$	1,582
Effective Tax Rate		17.6	%		(5.0	)%		34.6	%

⁽¹⁾	Primary components in 2018 were a $1.15 billion benefit from the remeasurement of our net U.S. deferred tax liability and a $204 million one-time benefit from a contribution to our tax-qualified U.S. domestic pension plans (“U.S. Pension Plans”) in 2018.

⁽²⁾	The 2018 and 2017 net benefits consist of foreign deferred tax benefits of $434 million and $94 million, respectively, which were partially offset by U.S. deferred tax expenses of $179 million and $26 million, respectively.

Schedule of Significant Components of Deferred Tax Assets and Liabilities

The significant components of deferred tax assets and liabilities as of May 31 were as follows (in millions):

	2019					2018
	Deferred Tax Assets			Deferred Tax Liabilities		Deferred Tax Assets			Deferred Tax Liabilities
Property, equipment, leases and intangibles	$	592		$	4,633	$	752		$	3,663
Employee benefits		1,256			—		595			31
Self-insurance accruals		585			—		494			—
Other		510			340		416			602
Net operating loss/credit carryforwards		1,139			—		1,146			—
Valuation allowances		(590	)		—		(711	)		—
	$	3,492		$	4,973	$	2,692		$	4,296

Schedule of Net Deferred Tax Liabilities

The net deferred tax liabilities as of May 31 have been classified in the balance sheets as follows (in millions):

	2019			2018
Noncurrent deferred tax assets⁽¹⁾	$	1,340		$	1,263
Noncurrent deferred tax liabilities		(2,821	)		(2,867	)
	$	(1,481	)	$	(1,604	)

⁽¹⁾	Noncurrent deferred tax assets are included in the line item “Other Assets” in our consolidated balance sheets.

Reconciliation of Beginning and Ending Amount of Unrecognized Tax Benefits

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in millions):

	2019			2018			2017
Balance at beginning of year	$	161		$	67		$	49
Increases for tax positions taken in the current year		—			3			—
Increases for tax positions taken in prior years		31			103			8
Increase for business acquisition		—			—			17
Decreases for tax positions taken in prior years		(4	)		(10	)		(1	)
Settlements		(21	)		(2	)		(4	)
Decreases from lapse of statute of limitations		—			—			(2	)
Changes due to currency translation		(3	)		—			—
Balance at end of year	$	164		$	161		$	67