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INCOME TAXES
 12 Months Ended
Jun. 30, 2026
Income Tax Disclosure [Abstract]  
INCOME TAXES
INCOME TAXES
Income taxes are recognized for the amount of taxes payable for the current year and for the impact of deferred tax assets and liabilities, which represent future tax consequences of events that have been recognized differently in the financial statements than for tax purposes. Deferred tax assets and liabilities are established using the enacted statutory tax rates and are adjusted for any changes in such rates in the period of change.
We have elected to account for the tax effects of Global Intangible Low-Taxed Income (GILTI) as a current period expense when incurred.
Earnings before income taxes consisted of the following:
Fiscal years ended June 30202620252024
United States$13,728 $13,911 $12,246 
International6,649 6,256 6,515 
TOTAL$20,377 $20,167 $18,761 
Income taxes consisted of the following:
Fiscal years ended June 30202620252024
CURRENT TAX EXPENSE
U.S. federal$2,105 $2,215 $1,954 
International1,700 1,330 1,708 
U.S. state and local378 407 368 
TOTAL4,182 3,953 4,031 
DEFERRED TAX EXPENSE/(BENEFIT)
U.S. federal(27)9 (133)
International98 146 (85)
U.S. state and local(21)(5)(26)
TOTAL51 149 (244)
TOTAL TAX EXPENSE$4,233 $4,102 $3,787 
Cash payments for income taxes, net of refunds, consisted of the following:
Fiscal years ended June 30202620252024
U.S. federal$3,057 $2,993 $2,554 
International1,257 1,187 1,408 
U.S. state and local365 373 402 
TOTAL$4,678 $4,554 $4,363 
A reconciliation of the U.S. federal statutory income tax rate to our actual effective income tax rate is provided below:
Fiscal years ended June 30202620252024
U.S. federal statutory income tax rate$4,279 21.0 %$4,235 21.0 %$3,940 21.0 %
Effect of cross-border tax laws, net of foreign tax credits
Foreign-derived intangible income(235)(1.2)%(163)(0.8)%(201)(1.1)%
Other41 0.2 %(2)— %64 0.3 %
Tax credits
Foreign tax credits from foreign withholding taxes(222)(1.1)%(180)(0.9)%(240)(1.3)%
Other(42)(0.2)%(36)(0.2)%(42)(0.2)%
Non-taxable or non-deductible items
Excess tax benefits from the exercise of stock options(82)(0.4)%(189)(0.9)%(186)(1.0)%
Domestic state and local income taxes, net of federal effect (1)
277 1.4 %334 1.7 %333 1.8 %
Foreign tax effects344 1.7 %137 0.7 %91 0.5 %
Worldwide changes in unrecognized tax benefits (2)
(50)(0.2)%87 0.4 %189 1.0 %
Other(76)(0.4)%(121)(0.6)%(160)(0.9)%
TOTAL$4,233 20.8 %$4,102 20.3 %$3,787 20.2 %
(1)State taxes in California, Illinois, New York, and New Jersey made up the majority of the tax effect in this category.
(2)The company has elected to present this category on a global aggregated basis and includes the effect of current year increases into unrecognized tax benefits.
Prior to the passage of the 2017 U.S. Tax Act, the Company asserted that substantially all of the undistributed earnings of its foreign subsidiaries were considered indefinitely invested and, accordingly, no deferred taxes were provided. Pursuant to the provisions of the 2017 U.S. Tax Act, these earnings were subjected to a one-time transition tax. This charge included taxes for all U.S. income taxes and for the related foreign withholding taxes for the portion of those earnings which are no longer considered indefinitely invested. We have not provided deferred taxes on undistributed foreign earnings which are considered indefinitely reinvested.
A reconciliation of the beginning and ending liability for uncertain tax positions is as follows:
Fiscal years ended June 30202620252024
BEGINNING OF YEAR$634 $582 $515 
Increases in tax positions for prior years59 240 157 
Decreases in tax positions for prior years(96)(181)(133)
Increases in tax positions for current year40 57 160 
Settlements with taxing authorities(73)(65)(100)
Lapse in statute of limitations(13)(6)(9)
Currency translation(4)7 (8)
END OF YEAR$547 $634 $582 
Included in the total liability for uncertain tax positions at June 30, 2026, is $438 that, depending on the ultimate resolution, could impact the effective tax rate in future periods.
The Company is present in approximately 65 countries and 140 taxable jurisdictions and, at any point in time, has 30-40 jurisdictional audits underway at various stages of completion. We evaluate our tax positions and establish liabilities for uncertain tax positions that may be challenged by local authorities and may not be fully sustained, despite our belief that the underlying tax positions are fully supportable. Uncertain tax positions are reviewed on an ongoing basis and are adjusted for
changing facts and circumstances, including progress of tax audits, developments in case law and the closing of statutes of limitation. Such adjustments are reflected in the tax provision as appropriate. We have tax years open ranging from 2013 and forward. We are generally not able to reliably estimate the timing and ultimate settlement amounts until the close of an audit.
We recognize the additional accrual of any possible related interest and penalties relating to the underlying uncertain tax position in income tax expense. As of June 30, 2026 and 2025, we had accrued interest of $142 and $141 and accrued penalties of $48 and $45, respectively, which are not included in the above table.
Deferred income tax assets and liabilities were comprised of the following:
As of June 3020262025
DEFERRED TAX ASSETS
Capitalized research & development$1,439 $1,251 
Loss and other carryforwards769 857 
Accrued marketing and promotion548 497 
Stock-based compensation466 445 
Pension and other retiree benefits388 601 
Fixed assets266 230 
Advance payments206 — 
Lease liabilities198 212 
Unrealized loss on financial and foreign exchange transactions144 358 
Other832 758 
Valuation allowances(330)(293)
TOTAL$4,927 $4,915 
DEFERRED TAX LIABILITIES
Goodwill and other intangible assets$5,443 $5,475 
Fixed assets1,606 1,547 
Other retiree benefits888 1,102 
Lease right-of-use assets194 209 
Unrealized gain on financial and foreign exchange transactions187 96 
Foreign withholding tax on earnings to be repatriated158 131 
Other630 492 
TOTAL$9,106 $9,052 
Net operating loss carryforwards were $1.6 billion at June 30, 2026, and $2.0 billion at June 30, 2025. If unused, approximately $100 will expire between 2026 and 2046. The remainder, totaling $1.5 billion at June 30, 2026, may be carried forward indefinitely.