Income before provision for income taxes

Year Ended May $31($in millions$)201920182017$

Domestic $$3,774\mathrm{.}00$ $$3,366\mathrm{.}00$ $$3,674\mathrm{.}00$

Foreign $$8,494\mathrm{.}00$ $$9,058\mathrm{.}00$ $$8,006\mathrm{.}00$

Income before provision for income taxes $$12,268\mathrm{.}00$ $$12,424\mathrm{.}00$ $$11,680\mathrm{.}00$

Provision for Income Taxes

Year Ended May $31($$ in millions$)201920182017$

Current provision:

Federal $$979\mathrm{.}00$ $$8,320\mathrm{.}00$ $$936\mathrm{.}00$

State $$300\mathrm{.}00$ $$264\mathrm{.}00$ $$257\mathrm{.}00$

Foreign $$1,097\mathrm{.}00$ $$1,100\mathrm{.}00$ $$1,475\mathrm{.}00$

Total current provision $$2,376\mathrm{.}00$ $$9,684\mathrm{.}00$ $$2,668\mathrm{.}00$

Deferred benefit:

Federal $$483\mathrm{.}00-$$$827\mathrm{.}00-$$$158\mathrm{.}00$

State $-$$$28\mathrm{.}00-$$$26\mathrm{.}00-$$$29\mathrm{.}00$

Foreign $-$$$1,646\mathrm{.}00$ $$6\mathrm{.}00-$$$253\mathrm{.}00$

Total deferred benefit $-$$$1,191\mathrm{.}00-$$$847\mathrm{.}00-$$$440\mathrm{.}00$

Total provision for income taxes $$1,185\mathrm{.}00$ $$8,837\mathrm{.}00$ $$2,228\mathrm{.}00$

Federal Statutory

Year Ended May $31($$ in millions$)201920182017$

U$.$S federal statutory tax rate $21\mathrm{.}00\%29\mathrm{.}20\%35\mathrm{.}00\%$

Tax provision at statutory rate $$2,576\mathrm{.}00$ $$3,629\mathrm{.}00$ $$4,088\mathrm{.}00$

Impact of the Tax Act of $2017$:

One$-$time transition tax $-$$$529\mathrm{.}00$ $$7,781\mathrm{.}00-$

Deferred tax effects $$140\mathrm{.}00-$$$911\mathrm{.}00-$

Foreign earnings at other than United States rates $-$$$789\mathrm{.}00-$$$995\mathrm{.}00-$$$1,312\mathrm{.}00$

State tax expense, net of federal benefit $$197\mathrm{.}00$ $$142\mathrm{.}00$ $$150\mathrm{.}00$

Settlements and releases from judicial decisions and

statute expirations, net $-$$$132\mathrm{.}00-$$$252\mathrm{.}00-$$$189\mathrm{.}00$

Domestic production activity deduction $--$$$87\mathrm{.}00-$$$119\mathrm{.}00$

Federal research and development credit $-$$$158\mathrm{.}00-$$$174\mathrm{.}00-$$$127\mathrm{.}00$

Stock$-$based compensation $-$$$201\mathrm{.}00-$$$302\mathrm{.}00-$$$149\mathrm{.}00$

Other, net $$81\mathrm{.}00$ $$6\mathrm{.}00-$$$114\mathrm{.}00$

Total provision for income taxes $$1,185\mathrm{.}00$ $$8,837\mathrm{.}00$ $$2,228\mathrm{.}00$

Deferred Tax Assets & Liabilities:

May $31($in millions$)20192018$

Deferred tax assets:

Accruals and allowances $$541\mathrm{.}00$ $$567\mathrm{.}00$

Employee compensation and benefits $$646\mathrm{.}00$ $$664\mathrm{.}00$

Differences in timing of revenue recognition $$322\mathrm{.}00$ $$338\mathrm{.}00$

Basis of property, plant and equipment and intangible assets $$1,238\mathrm{.}00$

Tax credit and net operating loss carryforwards $$3,717\mathrm{.}00$ $$2,614\mathrm{.}00$

Total deferred tax assets $$6,464\mathrm{.}00$ $$4,183\mathrm{.}00$

Valuation allowance $-$$$1,266\mathrm{.}00-$$$1,308\mathrm{.}00$

Total deferred tax assets, net $$5,198\mathrm{.}00$ $$2,875\mathrm{.}00$

Deferred tax liabilities:

Unrealized gain on stock $-$$$78\mathrm{.}00-$$$78\mathrm{.}00$

Acquired intangible assets $-$$$973\mathrm{.}00-$$$1,254\mathrm{.}00$

GILTI deferred $-$$$1,515\mathrm{.}00$

Basis of property, plant and equipment an intangible assets $-$$$158\mathrm{.}00$

Other $-$$$200\mathrm{.}00-$$$48\mathrm{.}00$

Total deferred tax liabilities $-$$$2,766\mathrm{.}00-$$$1,538\mathrm{.}00$

Net deferred tax assets $$2,432\mathrm{.}00$ $$1,337\mathrm{.}00$

Beginning

$ millions $20162017$

Total deferred tax asset $$6,197\mathrm{.}00$ $$4,936\mathrm{.}00$

Valuation allowance $$1,164\mathrm{.}00$ $$1,173\mathrm{.}00$