Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Mar. 31, 2018 | Apr. 20, 2018 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | MSFT | |
Entity Registrant Name | MICROSOFT CORPORATION | |
Entity Central Index Key | 789,019 | |
Current Fiscal Year End Date | --06-30 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 7,683,197,503 |
INCOME STATEMENTS
INCOME STATEMENTS - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | |
Revenue | ||||
Product | $ 15,114 | $ 14,513 | $ 47,338 | $ 47,754 |
Service and other | 11,705 | 8,699 | 32,937 | 23,212 |
Total revenue | 26,819 | 23,212 | 80,275 | 70,966 |
Cost of revenue | ||||
Product | 3,425 | 3,075 | 11,903 | 12,034 |
Service and other | 5,844 | 4,985 | 16,708 | 13,771 |
Total cost of revenue | 9,269 | 8,060 | 28,611 | 25,805 |
Gross margin | 17,550 | 15,152 | 51,664 | 45,161 |
Research and development | 3,715 | 3,355 | 10,793 | 9,523 |
Sales and marketing | 4,335 | 3,872 | 12,709 | 11,169 |
General and administrative | 1,208 | 1,202 | 3,483 | 3,126 |
Operating income | 8,292 | 6,723 | 24,679 | 21,343 |
Other income, net | 349 | 371 | 1,115 | 600 |
Income before income taxes | 8,641 | 7,094 | 25,794 | 21,943 |
Provision for income taxes | 1,217 | 1,608 | 18,096 | 4,523 |
Net income | $ 7,424 | $ 5,486 | $ 7,698 | $ 17,420 |
Earnings per share: | ||||
Basic | $ 0.96 | $ 0.71 | $ 1 | $ 2.25 |
Diluted | $ 0.95 | $ 0.70 | $ 0.99 | $ 2.22 |
Weighted average shares outstanding: | ||||
Basic | 7,698 | 7,725 | 7,706 | 7,756 |
Diluted | 7,794 | 7,813 | 7,798 | 7,840 |
Cash dividends declared per common share | $ 0.42 | $ 0.39 | $ 1.26 | $ 1.17 |
COMPREHENSIVE INCOME STATEMENTS
COMPREHENSIVE INCOME STATEMENTS - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | |
Statement Of Income And Comprehensive Income [Abstract] | ||||
Net income | $ 7,424 | $ 5,486 | $ 7,698 | $ 17,420 |
Other comprehensive income (loss), net of tax: | ||||
Net change related to derivatives | 7 | (225) | (106) | 18 |
Net change related to investments | (1,016) | 65 | (2,182) | (846) |
Translation adjustments and other | 255 | 349 | 508 | (125) |
Other comprehensive income (loss) | (754) | 189 | (1,780) | (953) |
Comprehensive income | $ 6,670 | $ 5,675 | $ 5,918 | $ 16,467 |
BALANCE SHEETS
BALANCE SHEETS - USD ($) $ in Millions | Mar. 31, 2018 | Jun. 30, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 9,221 | $ 7,663 |
Short-term investments | 123,049 | 125,318 |
Total cash, cash equivalents, and short-term investments | 132,270 | 132,981 |
Accounts receivable, net of allowance for doubtful accounts of $311 and $345 | 17,208 | 22,431 |
Inventories | 2,084 | 2,181 |
Other | 5,097 | 5,103 |
Total current assets | 156,659 | 162,696 |
Property and equipment, net of accumulated depreciation of $28,377 and $24,179 | 27,929 | 23,734 |
Operating lease right-of-use assets | 6,859 | 6,555 |
Equity and other investments | 2,818 | 6,023 |
Goodwill | 35,582 | 35,122 |
Intangible assets, net | 8,544 | 10,106 |
Other long-term assets | 7,106 | 6,076 |
Total assets | 245,497 | 250,312 |
Current liabilities: | ||
Accounts payable | 7,623 | 7,390 |
Short-term debt | 230 | 9,072 |
Current portion of long-term debt | 3,447 | 1,049 |
Accrued compensation | 5,149 | 5,819 |
Short-term income taxes | 814 | 718 |
Short-term unearned revenue | 21,370 | 24,013 |
Other | 7,500 | 7,684 |
Total current liabilities | 46,133 | 55,745 |
Long-term debt | 73,480 | 76,073 |
Long-term income taxes | 30,669 | 13,485 |
Long-term unearned revenue | 2,585 | 2,643 |
Deferred income taxes | 2,417 | 5,734 |
Operating lease liabilities | 5,751 | 5,372 |
Other long-term liabilities | 5,223 | 3,549 |
Total liabilities | 166,258 | 162,601 |
Commitments and contingencies | ||
Stockholders’ equity: | ||
Common stock and paid-in capital – shares authorized 24,000; outstanding 7,690 and 7,708 | 70,418 | 69,315 |
Retained earnings | 9,974 | 17,769 |
Accumulated other comprehensive income (loss) | (1,153) | 627 |
Total stockholders’ equity | 79,239 | 87,711 |
Total liabilities and stockholders' equity | $ 245,497 | $ 250,312 |
BALANCE SHEETS (Parenthetical)
BALANCE SHEETS (Parenthetical) - USD ($) $ in Millions | Mar. 31, 2018 | Jun. 30, 2017 |
Statement Of Financial Position [Abstract] | ||
Accounts receivable, allowance for doubtful accounts | $ 311 | $ 345 |
Property and equipment, accumulated depreciation | $ 28,377 | $ 24,179 |
Common stock, shares authorized | 24,000,000,000 | 24,000,000,000 |
Common stock, outstanding | 7,690,000,000 | 7,708,000,000 |
CASH FLOWS STATEMENTS
CASH FLOWS STATEMENTS - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | |
Operations | ||||
Net income | $ 7,424 | $ 5,486 | $ 7,698 | $ 17,420 |
Adjustments to reconcile net income to net cash from operations: | ||||
Depreciation, amortization, and other | 2,710 | 2,453 | 7,745 | 6,435 |
Stock-based compensation expense | 969 | 883 | 2,928 | 2,353 |
Net recognized gains on investments and derivatives | (438) | (590) | (1,645) | (1,553) |
Deferred income taxes | (396) | (284) | (2,754) | 261 |
Changes in operating assets and liabilities: | ||||
Accounts receivable | 1,285 | 1,415 | 5,326 | 5,813 |
Inventories | (75) | (16) | 107 | 249 |
Other current assets | (149) | (31) | (113) | 304 |
Other long-term assets | (213) | (387) | (835) | (680) |
Accounts payable | (393) | (425) | 138 | (769) |
Unearned revenue | 91 | (45) | (2,780) | (2,929) |
Income taxes | 645 | 1,247 | 17,280 | 2,654 |
Other current liabilities | 546 | 671 | (975) | (1,057) |
Other long-term liabilities | 145 | 283 | 346 | 1 |
Net cash from operations | 12,151 | 10,660 | 32,466 | 28,502 |
Financing | ||||
Repayments of short-term debt, maturities of 90 days or less, net | (7,373) | (1,302) | (7,324) | (8,447) |
Proceeds from issuance of debt | 0 | 547 | 7,183 | 42,593 |
Repayments of debt | (4,883) | (211) | (9,379) | (4,554) |
Common stock issued | 251 | 179 | 747 | 551 |
Common stock repurchased | (3,781) | (2,062) | (8,359) | (10,023) |
Common stock cash dividends paid | (3,232) | (3,012) | (9,473) | (8,836) |
Other, net | (640) | (375) | (946) | (175) |
Net cash from (used in) financing | (19,658) | (6,236) | (27,551) | 11,109 |
Investing | ||||
Additions to property and equipment | (2,934) | (1,695) | (7,652) | (5,846) |
Acquisition of companies, net of cash acquired, and purchases of intangible and other assets | (248) | (802) | (454) | (25,586) |
Purchases of investments | (26,885) | (43,918) | (105,000) | (147,874) |
Maturities of investments | 7,674 | 4,860 | 19,252 | 22,234 |
Sales of investments | 26,256 | 36,444 | 90,553 | 117,754 |
Securities lending payable | (19) | (1,080) | (90) | (94) |
Net cash from (used in) investing | 3,844 | (6,191) | (3,391) | (39,412) |
Effect of foreign exchange rates on cash and cash equivalents | 25 | 12 | 34 | 4 |
Net change in cash and cash equivalents | (3,638) | (1,755) | 1,558 | 203 |
Cash and cash equivalents, beginning of period | 12,859 | 8,468 | 7,663 | 6,510 |
Cash and cash equivalents, end of period | $ 9,221 | $ 6,713 | $ 9,221 | $ 6,713 |
STOCKHOLDERS' EQUITY STATEMENTS
STOCKHOLDERS' EQUITY STATEMENTS - USD ($) $ in Millions | Total | Common stock and paid-in capital | Retained earnings | Accumulated other comprehensive income (loss) |
Balance, beginning of period at Jun. 30, 2016 | $ 68,178 | $ 13,118 | $ 1,794 | |
Common stock issued | 551 | |||
Net income | $ 17,420 | 17,420 | ||
Other comprehensive income (loss) | (953) | (953) | ||
Common stock cash dividends | (9,037) | |||
Common stock repurchased | (8,683) | (2,619) | (7,405) | |
Stock-based compensation expense | 2,353 | |||
Other, net | 91 | |||
Balance, end of period at Mar. 31, 2017 | 83,491 | 68,554 | 14,096 | 841 |
Balance, beginning of period at Dec. 31, 2016 | 68,177 | 13,000 | 652 | |
Common stock issued | 179 | |||
Net income | 5,486 | 5,486 | ||
Other comprehensive income (loss) | 189 | 189 | ||
Common stock cash dividends | (3,009) | (3,009) | ||
Common stock repurchased | (684) | (1,381) | ||
Stock-based compensation expense | 883 | |||
Other, net | (1) | |||
Balance, end of period at Mar. 31, 2017 | 83,491 | 68,554 | 14,096 | 841 |
Balance, beginning of period at Jun. 30, 2017 | 87,711 | 69,315 | 17,769 | 627 |
Common stock issued | 747 | |||
Net income | 7,698 | 7,698 | ||
Other comprehensive income (loss) | (1,780) | (1,780) | ||
Common stock cash dividends | (9,696) | |||
Common stock repurchased | (2,572) | (5,797) | ||
Stock-based compensation expense | 2,928 | |||
Other, net | 0 | |||
Balance, end of period at Mar. 31, 2018 | 79,239 | 70,418 | 9,974 | (1,153) |
Balance, beginning of period at Dec. 31, 2017 | 70,192 | 8,567 | (399) | |
Common stock issued | 251 | |||
Net income | 7,424 | 7,424 | ||
Other comprehensive income (loss) | (754) | (754) | ||
Common stock cash dividends | (3,230) | (3,225) | ||
Common stock repurchased | (995) | (2,792) | ||
Stock-based compensation expense | 969 | |||
Other, net | 1 | |||
Balance, end of period at Mar. 31, 2018 | $ 79,239 | $ 70,418 | $ 9,974 | $ (1,153) |
ACCOUNTING POLICIES
ACCOUNTING POLICIES | 9 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
ACCOUNTING POLICIES | NOTE 1 — ACCOUNTING POLICIES Accounting Principles Our unaudited interim consolidated financial statements and accompanying notes are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). In the opinion of management, the unaudited interim consolidated financial statements reflect all adjustments of a normal recurring nature that are necessary for a fair presentation of the results for the interim periods presented. Interim results are not necessarily indicative of results for a full year. The information included in this Form 10-Q should be read in conjunction with information included in the Microsoft Corporation 2017 Form 10-K filed with the U.S. Securities and Exchange Commission on August 2, 2017. We have recast certain prior period income tax liabilities as discussed in the Recent Tax Legislation section below. We have also recast prior period securities lending payables to other current liabilities on our consolidated balance sheets to conform to the current period presentation, with no impact on consolidated net income or cash flows. Principles of Consolidation The consolidated financial statements include the accounts of Microsoft Corporation and its subsidiaries. Intercompany transactions and balances have been eliminated. Equity investments for which we are able to exercise significant influence over but do not control the investee and are not the primary beneficiary of the investee’s activities are accounted for using the equity method. Investments for which we are not able to exercise significant influence over the investee and which do not have readily determinable fair values are accounted for under the cost method. Estimates and Assumptions Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. Examples of estimates and assumptions include: for revenue recognition, determining the nature and timing of satisfaction of performance obligations, and determining the standalone selling price (“SSP”) of performance obligations, variable consideration, and other obligations such as product returns and refunds; loss contingencies; product warranties; the fair value of and/or potential impairment of goodwill and intangible assets for our reporting units; product life cycles; useful lives of our tangible and intangible assets; allowances for doubtful accounts; the market value of, and demand for, our inventory; stock-based compensation forfeiture rates; when technological feasibility is achieved for our products; the potential outcome of future tax consequences of events that have been recognized on our consolidated financial statements or tax returns; and determining when investment impairments are other-than-temporary. Actual results and outcomes may differ from management’s estimates and assumptions. Revenue Product Revenue and Service and Other Revenue Product revenue includes sales from operating systems; cross-device productivity applications; server applications; business solution applications; desktop and server management tools; software development tools; video games; and hardware such as PCs, tablets, gaming and entertainment consoles, other intelligent devices, and related accessories. Service and other revenue includes sales from cloud-based solutions that provide customers with software, services, platforms, and content such as Microsoft Office 365, Microsoft Azure, Microsoft Dynamics 365, and Xbox Live; solution support; and consulting services. Service and other revenue also includes sales from online advertising and LinkedIn. Revenue Recognition Revenue is recognized upon transfer of control of promised products or services to customers in an amount that reflects the consideration we expect to receive in exchange for those products or services. We enter into contracts that can include various combinations of products and services, which are generally capable of being distinct and accounted for as separate performance obligations. Revenue is recognized net of allowances for returns and any taxes collected from customers, which are subsequently remitted to governmental authorities. Nature of Products and Services Licenses for on-premises software provide the customer with a right to use the software as it exists when made available to the customer. Customers may purchase perpetual licenses or subscribe to licenses, which provide customers with the same functionality and differ mainly in the duration over which the customer benefits from the software. Revenue from distinct on-premises licenses is recognized upfront at the point in time when the software is made available to the customer. In cases where we allocate revenue to software updates, primarily because the updates are provided at no additional charge, revenue is recognized as the updates are provided, which is generally ratably over the estimated life of the related device or license. Certain volume licensing programs, including Enterprise Agreements, include on-premises licenses combined with Software Assurance (“SA”). SA conveys rights to new software and upgrades released over the contract period and provides support, tools, and training to help customers deploy and use products more efficiently. On-premises licenses are considered distinct performance obligations when sold with SA. Revenue allocated to SA is generally recognized ratably over the contract period as customers simultaneously consume and receive benefits, given that SA comprises distinct performance obligations that are satisfied over time. Cloud services, which allow customers to use hosted software over the contract period without taking possession of the software, are provided on either a subscription or consumption basis. Revenue related to cloud services provided on a subscription basis is recognized ratably over the contract period. Revenue related to cloud services provided on a consumption basis, such as the amount of storage used in a period, is recognized based on the customer utilization of such resources. When cloud services require a significant level of integration and interdependency with software and the individual components are not considered distinct, all revenue is recognized over the period in which the cloud services are provided. Revenue from search advertising is recognized when the advertisement appears in the search results or when the action necessary to earn the revenue has been completed. Revenue from consulting services is recognized as services are provided. Our hardware is generally highly dependent on, and interrelated with, the underlying operating system and cannot function without the operating system. In these cases, the hardware and software license are accounted for as a single performance obligation and revenue is recognized at the point in time when ownership is transferred to resellers or directly to end customers through retail stores and online marketplaces. Refer to Note 19 – Segment Information and Geographic Data for further information, including revenue by significant product and service offering. Significant Judgments Our contracts with customers often include promises to transfer multiple products and services to a customer. Determining whether products and services are considered distinct performance obligations that should be accounted for separately versus together may require significant judgment. When a cloud-based service includes both on-premises software licenses and cloud services, judgment is required to determine whether the software license is considered distinct and accounted for separately, or not distinct and accounted for together with the cloud service and recognized over time. Certain cloud services, primarily Office 365, depend on a significant level of integration, interdependency, and interrelation between the desktop applications and cloud services, and are accounted for together as one performance obligation. Revenue from Office 365 is recognized ratably over the period in which the cloud services are provided. Judgment is required to determine the SSP for each distinct performance obligation. We use a single amount to estimate SSP for items that are not sold separately, including on-premises licenses sold with SA or software updates provided at no additional charge. We use a range of amounts to estimate SSP when we sell each of the products and services separately and need to determine whether there is a discount to be allocated based on the relative SSP of the various products and services. In instances where SSP is not directly observable, such as when we do not sell the product or service separately, we determine the SSP using information that may include market conditions and other observable inputs. We typically have more than one SSP for individual products and services due to the stratification of those products and services by customers and circumstances. In these instances, we may use information such as the size of the customer and geographic region in determining the SSP. Due to the various benefits from and the nature of our SA program, judgment is required to assess the pattern of delivery, including the exercise pattern of certain benefits across our portfolio of customers. Our products are generally sold with a right of return and we may provide other credits or incentives, which are accounted for as variable consideration when estimating the amount of revenue to recognize. Returns and credits are estimated at contract inception and updated at the end of each reporting period as additional information becomes available. Contract Balances Timing of revenue recognition may differ from the timing of invoicing to customers. We record a receivable when revenue is recognized prior to invoicing, or unearned revenue when revenue is recognized subsequent to invoicing. For multi-year agreements, we generally invoice customers annually at the beginning of each annual coverage period. We record a receivable related to revenue recognized for multi-year on-premises licenses as we have an unconditional right to invoice and receive payment in the future related to those licenses. The opening balance of current and long-term accounts receivable, net of allowance for doubtful accounts, was $22.3 billion as of July 1, 2016. As of March 31, 2018 and June 30, 2017, long-term accounts receivable, net of allowance for doubtful accounts, were $1.6 billion and $1.7 billion, respectively, and are included in other long-term assets on our consolidated balance sheets. The allowance for doubtful accounts reflects our best estimate of probable losses inherent in the accounts receivable balance. We determine the allowance based on known troubled accounts, historical experience, and other currently available evidence. Activity in the allowance for doubtful accounts was as follows: (In millions) Nine Months Ended March 31, 2018 Balance, beginning of period $ 361 Charged to costs and other 41 Write-offs (74 ) Balance, end of period $ 328 Reported as of March 31, 2018 Accounts receivable, net of allowance for doubtful accounts $ 311 Other long-term assets 17 Total $ 328 Unearned revenue comprises mainly unearned revenue related to volume licensing programs, which may include SA and cloud services. Unearned revenue is generally invoiced annually at the beginning of each contract period for multi-year agreements and recognized ratably over the coverage period. Unearned revenue also includes payments for consulting services to be performed in the future; LinkedIn subscriptions; Office 365 subscriptions; Xbox Live subscriptions; Windows 10 post-delivery support; Dynamics business solutions; Skype prepaid credits and subscriptions; and other offerings for which we have been paid in advance and earn the revenue when we transfer control of the product or service. Refer to Note 14 – Unearned Revenue for further information, including unearned revenue by segment and changes in unearned revenue during the period. Payment terms and conditions vary by contract type, although terms generally include a requirement of payment within 30 to 60 days. In instances where the timing of revenue recognition differs from the timing of invoicing, we have determined our contracts generally do not include a significant financing component. The primary purpose of our invoicing terms is to provide customers with simplified and predictable ways of purchasing our products and services, not to receive financing from our customers or to provide customers with financing. Examples include invoicing at the beginning of a subscription term with revenue recognized ratably over the contract period, and multi-year on-premises licenses that are invoiced annually with revenue recognized upfront. Assets Recognized from Costs to Obtain a Contract with a Customer We recognize an asset for the incremental costs of obtaining a contract with a customer if we expect the benefit of those costs to be longer than one year. We have determined that certain sales incentive programs meet the requirements to be capitalized. Total capitalized costs to obtain a contract were immaterial during the periods presented and are included in other current and long-term assets on our consolidated balance sheets. We apply a practical expedient to expense costs as incurred for costs to obtain a contract with a customer when the amortization period would have been one year or less. These costs include our internal sales force compensation program and certain partner sales incentive programs as we have determined annual compensation is commensurate with annual sales activities. Leases We determine if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use (“ROU”) assets, other current liabilities, and operating lease liabilities on our consolidated balance sheets. Finance leases are included in property and equipment, other current liabilities, and other long-term liabilities on our consolidated balance sheets. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. We have lease agreements with lease and non-lease components, which are generally accounted for separately. For certain equipment leases, such as vehicles, we account for the lease and non-lease components as a single lease component. Additionally, for certain equipment leases, we apply a portfolio approach to effectively account for the operating lease ROU assets and liabilities. Recent Tax Legislation On December 22, 2017, the Tax Cuts and Jobs Act (“TCJA”) was enacted into law, which significantly changes existing U.S. tax law and includes numerous provisions that affect our business. Refer to Note 12 – Income Taxes for further discussion. As a result of the TCJA, we have recast certain prior period income tax liabilities on our consolidated balance sheets to conform to the current period presentation. Previously reported balances were impacted as follows: (In millions) As Previously Reported As Adjusted Balance Sheets June 30, 2017 Long-term income taxes $ 0 $ 13,485 Other long-term liabilities 17,034 3,549 These adjustments had no impact on our consolidated income statements or net cash from or used in operating, financing, or investing on our consolidated cash flows statements. Recent Accounting Guidance Recently Adopted Accounting Guidance Leases In February 2016, the Financial Accounting Standards Board (“FASB”) issued a new standard related to leases to increase transparency and comparability among organizations by requiring the recognition of ROU assets and lease liabilities on the balance sheet. Most prominent among the changes in the standard is the recognition of ROU assets and lease liabilities by lessees for those leases classified as operating leases. Under the standard, disclosures are required to meet the objective of enabling users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases. We are also required to recognize and measure leases existing at, or entered into after, the beginning of the earliest comparative period presented using a modified retrospective approach, with certain practical expedients available. We elected to early adopt the standard effective July 1, 2017 concurrent with our adoption of the new standard related to revenue recognition. We elected the available practical expedients and implemented internal controls and key system functionality to enable the preparation of financial information on adoption. The standard had a material impact on our consolidated balance sheets, but did not have an impact on our consolidated income statements. The most significant impact was the recognition of ROU assets and lease liabilities for operating leases, while our accounting for finance leases remained substantially unchanged. Adoption of the standard required us to restate certain previously reported results, including the recognition of additional ROU assets and lease liabilities for operating leases. Refer to Impacts to Previously Reported Results below for the impact of adoption of the standard on our consolidated financial statements. Revenue from Contracts with Customers In May 2014, the FASB issued a new standard related to revenue recognition. Under the standard, revenue is recognized when a customer obtains control of promised goods or services in an amount that reflects the consideration the entity expects to receive in exchange for those goods or services. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. We elected to early adopt the standard effective July 1, 2017, using the full retrospective method, which required us to restate each prior reporting period presented. We implemented internal controls and key system functionality to enable the preparation of financial information on adoption. The most significant impact of the standard relates to our accounting for software license revenue. Specifically, for Windows 10, we recognize revenue predominantly at the time of billing and delivery rather than ratably over the life of the related device. For certain multi-year commercial software subscriptions that include both distinct software licenses and SA, we recognize license revenue at the time of contract execution rather than over the subscription period. Due to the complexity of certain of our commercial license subscription contracts, the actual revenue recognition treatment required under the standard depends on contract-specific terms and in some instances may vary from recognition at the time of billing. Revenue recognition related to our hardware, cloud offerings (such as Office 365), LinkedIn, and professional services remains substantially unchanged. Adoption of the standard using the full retrospective method required us to restate certain previously reported results, including the recognition of additional revenue and an increase in the provision for income taxes, primarily due to the net change in Windows 10 revenue recognition. In addition, adoption of the standard resulted in an increase in accounts receivable and other current and long-term assets, driven by unbilled receivables from upfront recognition of revenue for certain multi-year commercial software subscriptions that include both distinct software licenses and SA; a reduction of unearned revenue, driven by the upfront recognition of license revenue from Windows 10 and certain multi-year commercial software subscriptions; and an increase in deferred income taxes, driven by the upfront recognition of revenue. Refer to Impacts to Previously Reported Results below for the impact of adoption of the standard on our consolidated financial statements. Impacts to Previously Reported Results Adoption of the standards related to revenue recognition and leases impacted our previously reported results as follows: (In millions, except per share amounts) As Previously Reported New Revenue Standard Adjustment As Restated Income Statements Three Months Ended March 31, 2017 Revenue $ 22,090 $ 1,122 $ 23,212 Provision for income taxes 1,115 493 1,608 Net income 4,801 685 5,486 Diluted earnings per share 0.61 0.09 0.70 Nine Months Ended March 31, 2017 Revenue $ 66,633 $ 4,333 $ 70,966 Provision for income taxes 2,913 1,610 4,523 Net income 14,691 2,729 17,420 Diluted earnings per share 1.87 0.35 2.22 (In millions) As Previously Reported New Revenue Standard Adjustment New Lease Standard Adjustment As Restated Balance Sheets June 30, 2017 Accounts receivable, net of allowance for doubtful accounts $ 19,792 $ 2,639 $ 0 $ 22,431 Operating lease right-of-use assets 0 0 6,555 6,555 Other current and long-term assets 11,147 32 0 11,179 Unearned revenue 44,479 (17,823 ) 0 26,656 Deferred income taxes 531 5,203 0 5,734 Operating lease liabilities 0 0 5,372 5,372 Other current and long-term liabilities 23,464 (26 ) 1,183 24,621 Stockholders' equity 72,394 15,317 0 87,711 Adoption of the standards related to revenue recognition and leases had no impact to cash from or used in operating, financing, or investing on our consolidated cash flows statements. Recent Accounting Guidance Not Yet Adopted Financial Instruments – Targeted Improvements to Accounting for Hedging Activities In August 2017, the FASB issued new guidance related to accounting for hedging activities. This guidance expands strategies that qualify for hedge accounting, changes how many hedging relationships are presented in the financial statements, and simplifies the application of hedge accounting in certain situations. The standard will be effective for us beginning July 1, 2019, with early adoption permitted for any interim or annual period before the effective date. Adoption of the standard will be applied using a modified retrospective approach through a cumulative-effect adjustment to retained earnings as of the effective date. We are currently evaluating the impact of this standard on our consolidated financial statements, including accounting policies, processes, and systems. Accounting for Income Taxes – Intra-Entity Asset Transfers In October 2016, the FASB issued new guidance requiring an entity to recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs, rather than when the asset has been sold to an outside party. This guidance is effective for us beginning July 1, 2018, with early adoption permitted beginning July 1, 2017. We plan to adopt the guidance effective July 1, 2018. Adoption of the guidance will be applied using a modified retrospective approach through a cumulative-effect adjustment to retained earnings as of the effective date. A cumulative-effect adjustment will capture the write-off of income tax consequences deferred from past intra-entity transfers involving Financial Instruments – Credit Losses In June 2016, the FASB issued a new standard to replace the incurred loss impairment methodology under current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. We will be required to use a forward-looking expected credit loss model for accounts receivables, loans, and other financial instruments. Credit losses relating to available-for-sale debt securities will also be recorded through an allowance for credit losses rather than as a reduction in the amortized cost basis of the securities. The standard will be effective for us beginning July 1, 2020, with early adoption permitted beginning July 1, 2019. Adoption of the standard will be applied using a modified retrospective approach through a cumulative-effect adjustment to retained earnings as of the effective date to align our credit loss methodology with the new standard. We are currently evaluating the impact of this standard on our consolidated financial statements, including accounting policies, processes, and systems. Financial Instruments – Recognition, Measurement, Presentation, and Disclosure In January 2016, the FASB issued a new standard related to certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. Most prominent among the changes in the standard is the requirement for changes in the fair value of our equity investments, with certain exceptions, to be recognized through net income rather than other comprehensive income (“OCI”). Under the standard, equity investments that do not have a readily determinable fair value are eligible for the measurement alternative. Using the measurement alternative, investments without readily determinable fair values will be valued at cost, with adjustments for changes in price or impairments reflected through net income. The standard will be effective for us beginning July 1, 2018. Adoption of the standard will be applied using a modified retrospective approach through a cumulative-effect adjustment from accumulated other comprehensive income (“AOCI”) to retained earnings as of the effective date. A cumulative-effect adjustment will capture any previously held unrealized gains and losses held in AOCI related to our equity investments carried at fair value as well as the impact of recording the fair value of certain equity investments carried at cost. The remaining implementation matters are primarily related to establishing processes and controls around equity securities without readily determinable fair values. We expect to elect the measurement alternative for equity investments that do not have readily determinable fair values. The impact on our consolidated balance sheets upon adoption will depend on the unrealized gains and losses held in AOCI related to our equity investments on the date of adoption, and on any impact the new guidance may have on our equity investments carried at cost. See Note 4 – Investments for our current investment balances. The impact of the standard going forward on our consolidated income statement will be dependent on our equity investment holdings, with adjustments to fair value reflected through net income. Adoption of the standard is expected to have no impact to cash from or used in operating, financing or investing on our consolidated cash flows statements. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 9 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | NOTE 2 — EARNINGS PER SHARE Basic earnings per share (“EPS”) is computed based on the weighted average number of shares of common stock outstanding during the period. Diluted EPS is computed based on the weighted average number of shares of common stock plus the effect of dilutive potential common shares outstanding during the period using the treasury stock method. Dilutive potential common shares include outstanding stock options and stock awards. The components of basic and diluted EPS were as follows: (In millions, except per share amounts) Three Months Ended March 31, Nine Months Ended March 31, 2018 2017 2018 2017 Net income available for common shareholders (A) $ 7,424 $ 5,486 $ 7,698 $ 17,420 Weighted average outstanding shares of common stock (B) 7,698 7,725 7,706 7,756 Dilutive effect of stock-based awards 96 88 92 84 Common stock and common stock equivalents (C) 7,794 7,813 7,798 7,840 Earnings Per Share Basic (A/B) $ 0.96 $ 0.71 $ 1.00 $ 2.25 Diluted (A/C) $ 0.95 $ 0.70 $ 0.99 $ 2.22 Anti-dilutive stock-based awards excluded from the calculations of diluted EPS were immaterial during the periods presented. |
OTHER INCOME (EXPENSE), NET
OTHER INCOME (EXPENSE), NET | 9 Months Ended |
Mar. 31, 2018 | |
Other Income And Expenses [Abstract] | |
OTHER INCOME (EXPENSE), NET | NOTE 3 — OTHER INCOME (EXPENSE), NET The components of other income (expense), net were as follows: (In millions) Three Months Ended March 31, Nine Months Ended March 31, 2018 2017 2018 2017 Dividends and interest income $ 575 $ 380 $ 1,578 $ 984 Interest expense (691 ) (609 ) (2,061 ) (1,567 ) Net recognized gains on investments 510 790 1,851 1,893 Net losses on derivatives (72 ) (200 ) (206 ) (340 ) Net gains (losses) on foreign currency remeasurements 20 50 (49 ) (143 ) Other, net 7 (40 ) 2 (227 ) Total $ 349 $ 371 $ 1,115 $ 600 Following are details of net recognized gains (losses) on investments during the periods reported: (In millions) Three Months Ended March 31, Nine Months Ended March 31, 2018 2017 2018 2017 Other-than-temporary impairments of investments $ (17 ) $ (15 ) $ (47 ) $ (54 ) Realized gains from sales of available-for-sale securities 875 938 2,612 2,272 Realized losses from sales of available-for-sale securities (348 ) (133 ) (714 ) (325 ) Total $ 510 $ 790 $ 1,851 $ 1,893 |
INVESTMENTS
INVESTMENTS | 9 Months Ended |
Mar. 31, 2018 | |
Investments Debt And Equity Securities [Abstract] | |
INVESTMENTS | NOTE 4 — INVESTMENTS Investment Components The components of investments, including associated derivatives, were as follows: (In millions) Cost Basis Unrealized Gains Unrealized Losses Recorded Basis Cash and Cash Equivalents Short-term Investments Equity and Other Investments March 31, 2018 Cash $ 4,104 $ 0 $ 0 $ 4,104 $ 4,104 $ 0 $ 0 Mutual funds 683 0 0 683 683 0 0 Commercial paper 3,774 0 0 3,774 3,158 616 0 Certificates of deposit 2,022 0 0 2,022 1,156 866 0 U.S. government and agency securities 108,056 31 (1,239 ) 106,848 117 106,731 0 Foreign government bonds 4,671 3 (12 ) 4,662 3 4,659 0 Mortgage- and asset-backed securities 3,750 5 (12 ) 3,743 0 3,743 0 Corporate notes and bonds 6,139 27 (43 ) 6,123 0 6,123 0 Municipal securities 269 41 (1 ) 309 0 309 0 Common and preferred stock 1,324 917 (4 ) 2,237 0 0 2,237 Other investments 583 0 0 583 0 2 581 Total $ 135,375 $ 1,024 $ (1,311 ) $ 135,088 $ 9,221 $ 123,049 $ 2,818 (In millions) Cost Basis Unrealized Gains Unrealized Losses Recorded Basis Cash and Cash Equivalents Short-term Investments Equity and Other Investments June 30, 2017 Cash $ 3,624 $ 0 $ 0 $ 3,624 $ 3,624 $ 0 $ 0 Mutual funds 1,478 0 0 1,478 1,478 0 0 Commercial paper 319 0 0 319 69 250 0 Certificates of deposit 1,358 0 0 1,358 972 386 0 U.S. government and agency securities 112,119 85 (360 ) 111,844 16 111,828 0 Foreign government bonds 5,276 2 (13 ) 5,265 1,504 3,761 0 Mortgage- and asset-backed securities 3,921 14 (4 ) 3,931 0 3,931 0 Corporate notes and bonds 4,786 61 (12 ) 4,835 0 4,835 0 Municipal securities 284 43 0 327 0 327 0 Common and preferred stock 2,472 3,062 (34 ) 5,500 0 0 5,500 Other investments 523 0 0 523 0 0 523 Total $ 136,160 $ 3,267 $ (423 ) $ 139,004 $ 7,663 $ 125,318 $ 6,023 As of March 31, 2018 and June 30, 2017, the recorded bases of common and preferred stock that are restricted for more than one year or are not publicly traded were $1.0 billion and $1.1 billion, respectively. These investments are carried at cost and are reviewed quarterly for indicators of other-than-temporary impairment. It is not practicable for us to reliably estimate the fair value of these investments. We lend certain fixed-income and equity securities to increase investment returns. These transactions are accounted for as secured borrowings and the loaned securities continue to be carried as investments on our consolidated balance sheets. Cash and/or security interests are received as collateral for the loaned securities with the amount determined based upon the underlying security lent and the creditworthiness of the borrower. Cash received is recorded as an asset with a corresponding liability. As of March 31, 2018 and June 30, 2017, collateral received under agreements for loaned securities was $3.0 billion and $3.7 billion, respectively, and primarily comprised U.S. government and agency securities. Unrealized Losses on Investments Investments with continuous unrealized losses for less than 12 months and 12 months or greater and their related fair values were as follows: Less than 12 Months 12 Months or Greater Total (In millions) Fair Value Unrealized Fair Value Unrealized Total March 31, 2018 U.S. government and agency securities $ 95,908 $ (1,169 ) $ 2,031 $ (70 ) $ 97,939 $ (1,239 ) Foreign government bonds 1,261 (3 ) 26 (9 ) 1,287 (12 ) Mortgage- and asset-backed securities 1,614 (7 ) 147 (5 ) 1,761 (12 ) Corporate notes and bonds 2,463 (30 ) 430 (13 ) 2,893 (43 ) Municipal securities 36 (1 ) 0 0 36 (1 ) Common and preferred stock 19 0 23 (4 ) 42 (4 ) Total $ 101,301 $ (1,210 ) $ 2,657 $ (101 ) $ 103,958 $ (1,311 ) Less than 12 Months 12 Months or Greater Total (In millions) Fair Value Unrealized Fair Value Unrealized Total June 30, 2017 U.S. government and agency securities $ 87,558 $ (348 ) $ 371 $ (12 ) $ 87,929 $ (360 ) Foreign government bonds 4,006 (2 ) 23 (11 ) 4,029 (13 ) Mortgage- and asset-backed securities 1,068 (3 ) 198 (1 ) 1,266 (4 ) Corporate notes and bonds 669 (8 ) 177 (4 ) 846 (12 ) Common and preferred stock 69 (6 ) 148 (28 ) 217 (34 ) Total $ 93,370 $ (367 ) $ 917 $ (56 ) $ 94,287 $ (423 ) Unrealized losses from fixed-income securities are primarily attributable to changes in interest rates. Unrealized losses from domestic and international equities are due to market price movements. Management does not believe any remaining unrealized losses represent other-than-temporary impairments based on our evaluation of available evidence. Debt Investment Maturities (In millions) Cost Basis Estimated Fair Value March 31, 2018 Due in one year or less $ 16,698 $ 16,670 Due after one year through five years 94,607 93,722 Due after five years through 10 years 16,427 16,133 Due after 10 years 949 956 Total $ 128,681 $ 127,481 |
DERIVATIVES
DERIVATIVES | 9 Months Ended |
Mar. 31, 2018 | |
Derivative Instruments And Hedging Activities Disclosure [Abstract] | |
DERIVATIVES | NOTE 5 — DERIVATIVES We use derivative instruments to manage risks related to foreign currencies, equity prices, interest rates, and credit; to enhance investment returns; and to facilitate portfolio diversification. Our objectives for holding derivatives include reducing, eliminating, and efficiently managing the economic impact of these exposures as effectively as possible. Our derivative programs include strategies that both qualify and do not qualify for hedge accounting treatment. All notional amounts presented below are measured in U.S. dollar equivalents. Foreign Currency Certain forecasted transactions, assets, and liabilities are exposed to foreign currency risk. We monitor our foreign currency exposures daily to maximize the economic effectiveness of our foreign currency hedge positions. Option and forward contracts are used to hedge a portion of forecasted international revenue for up to three years in the future and are designated as cash flow hedging instruments. Principal currencies hedged include the euro, Japanese yen, British pound, Canadian dollar, and Australian dollar. As of March 31, 2018 and June 30, 2017, the total notional amounts of these foreign exchange contracts sold were $7.5 billion and $8.9 billion, respectively. Foreign currency risks related to certain non-U.S. dollar denominated securities are hedged using foreign exchange forward contracts that are designated as fair value hedging instruments. As of March 31, 2018 and June 30, 2017, the total notional amounts of these foreign exchange contracts sold were $4.5 billion and $5.1 billion, respectively. Certain options and forwards not designated as hedging instruments are also used to manage the variability in foreign exchange rates on certain balance sheet amounts and to manage other foreign currency exposures. As of March 31, 2018, the total notional amounts of these foreign exchange contracts purchased and sold were $9.1 billion and $9.7 billion, respectively. As of June 30, 2017, the total notional amounts of these foreign exchange contracts purchased and sold were $8.8 billion and $10.6 billion, respectively. Equity Securities held in our equity and other investments portfolio are subject to market price risk. Market price risk is managed relative to broad-based global and domestic equity indices using certain convertible preferred investments, options, futures, and swap contracts not designated as hedging instruments. From time to time, to hedge our price risk, we may use and designate equity derivatives as hedging instruments, including puts, calls, swaps, and forwards. As of March 31, 2018, the total notional amounts of equity contracts purchased and sold for managing market price risk were $801 million and $820 million, respectively, of which $731 million and $815 million, respectively, were designated as hedging instruments. As of June 30, 2017, the total notional amounts of equity contracts purchased and sold for managing market price risk were $1.9 billion and $2.4 billion, respectively, of which $1.6 billion and $1.8 billion, respectively, were designated as hedging instruments. Interest Rate Securities held in our fixed-income portfolio are subject to different interest rate risks based on their maturities. We manage the average maturity of our fixed-income portfolio to achieve economic returns that correlate to certain broad-based fixed-income indices using exchange-traded option and futures contracts, and over-the-counter swap and option contracts, none of which are designated as hedging instruments. As of March 31, 2018, the total notional amounts of fixed-interest rate contracts purchased and sold were $620 million and $424 million, respectively. As of June 30, 2017, the total notional amounts of fixed-interest rate contracts purchased and sold were $233 million and $352 million, respectively. In addition, we use “To Be Announced” forward purchase commitments of mortgage-backed assets to gain exposure to agency mortgage-backed securities. These meet the definition of a derivative instrument in cases where physical delivery of the assets is not taken at the earliest available delivery date. As of March 31, 2018 and June 30, 2017, the total notional derivative amounts of mortgage contracts purchased were $563 million and $567 million, respectively. Credit Our fixed-income portfolio is diversified and consists primarily of investment-grade securities. We use credit default swap contracts, not designated as hedging instruments, to manage credit exposures relative to broad-based indices and to facilitate portfolio diversification. We use credit default swaps as they are a low-cost method of managing exposure to individual credit risks or groups of credit risks. As of March 31, 2018, the total notional amounts of credit contracts purchased and sold were $238 million and $31 million, respectively. As of June 30, 2017, the total notional amounts of credit contracts purchased and sold were $267 million and $63 million, respectively. Credit-Risk-Related Contingent Features Certain of our counterparty agreements for derivative instruments contain provisions that require our issued and outstanding long-term unsecured debt to maintain an investment grade credit rating and require us to maintain minimum liquidity of $1.0 billion. To the extent we fail to meet these requirements, we will be required to post collateral, similar to the standard convention related to over-the-counter derivatives. As of March 31, 2018, our long-term unsecured debt rating was AAA, and cash investments were in excess of $1.0 billion. As a result, no collateral was required to be posted. Fair Values of Derivative Instruments Derivative instruments are recognized as either assets or liabilities and are measured at fair value. The accounting for changes in the fair value of a derivative depends on the intended use of the derivative and the resulting designation. For derivative instruments designated as fair value hedges, the gains (losses) are recognized in earnings in the periods of change together with the offsetting (losses) gains on the hedged items attributed to the risk being hedged. For options designated as fair value hedges, changes in the time value are excluded from the assessment of hedge effectiveness and are recognized in earnings. For derivative instruments designated as cash flow hedges, the effective portion of the gains (losses) on the derivatives is initially reported as a component of OCI and is subsequently recognized in earnings when the hedged exposure is recognized in earnings. For options designated as cash flow hedges, changes in the time value are excluded from the assessment of hedge effectiveness and are recognized in earnings. Gains (losses) on derivatives representing either hedge components excluded from the assessment of effectiveness or hedge ineffectiveness are recognized in earnings. For derivative instruments that are not designated as hedges, gains (losses) from changes in fair values are primarily recognized in other income (expense), net. Other than those derivatives entered into for investment purposes, the gains (losses) are generally economically offset by unrealized gains (losses) in the underlying available-for-sale securities, which are recorded as a component of OCI until the securities are sold or other-than-temporarily impaired, at which time the amounts are reclassified from AOCI into other income (expense), net. The following table presents the fair values of derivative instruments designated as hedging instruments (“designated hedge derivatives”) and not designated as hedging instruments (“non-designated hedge derivatives”). The fair values exclude the impact of netting derivative assets and liabilities when a legally enforceable master netting agreement exists and fair value adjustments related to our own credit risk and counterparty credit risk: Assets Liabilities (In millions) Short-term Other Equity and Other Long-term Assets Other Other Long-term Liabilities March 31, 2018 Non-designated Hedge Derivatives Foreign exchange contracts $ 3 $ 67 $ 0 $ 59 $ (142 ) $ (9 ) Equity contracts 4 0 0 0 (4 ) 0 Interest rate contracts 15 0 0 0 (2 ) 0 Credit contracts 4 0 0 0 0 0 Total $ 26 $ 67 $ 0 $ 59 $ (148 ) $ (9 ) Designated Hedge Derivatives Foreign exchange contracts $ 10 $ 71 $ 0 $ 6 $ (70 ) $ (6 ) Equity contracts 0 0 12 0 (95 ) 0 Total $ 10 $ 71 $ 12 $ 6 $ (165 ) $ (6 ) Total gross amounts of derivatives $ 36 $ 138 $ 12 $ 65 $ (313 ) $ (15 ) Gross derivatives either offset or subject to an enforceable master netting agreement $ 31 $ 138 $ 12 $ 65 $ (313 ) $ (15 ) Gross amounts of derivatives offset on the balance sheet (34 ) (102 ) (12 ) (9 ) 150 9 Net amounts presented on the balance sheet (3 ) 36 0 56 (163 ) (6 ) Gross amounts of derivatives not offset on the balance sheet 0 0 0 0 0 0 Cash collateral received 0 0 0 0 (61 ) 0 Net amount $ (3 ) $ 36 $ 0 $ 56 $ (224 ) $ (6 ) Assets Liabilities (In millions) Short-term Other Equity and Other Long-term Assets Other Other Long-term Liabilities June 30, 2017 Non-designated Hedge Derivatives Foreign exchange contracts $ 9 $ 203 $ 0 $ 6 $ (134 ) $ (8 ) Equity contracts 3 0 0 0 (6 ) 0 Interest rate contracts 3 0 0 0 (7 ) 0 Credit contracts 5 0 0 0 (1 ) 0 Total $ 20 $ 203 $ 0 $ 6 $ (148 ) $ (8 ) Designated Hedge Derivatives Foreign exchange contracts $ 80 $ 133 $ 0 $ 0 $ (3 ) $ 0 Equity contracts 0 0 67 0 (186 ) 0 Total $ 80 $ 133 $ 67 $ 0 $ (189 ) $ 0 Total gross amounts of derivatives $ 100 $ 336 $ 67 $ 6 $ (337 ) $ (8 ) Gross derivatives either offset or subject to an enforceable master netting agreement $ 100 $ 336 $ 67 $ 6 $ (334 ) $ (8 ) Gross amounts of derivatives offset on the balance sheet (20 ) (132 ) (67 ) (8 ) 221 7 Net amounts presented on the balance sheet 80 204 0 (2 ) (113 ) (1 ) Gross amounts of derivatives not offset on the balance sheet 0 0 0 0 0 0 Cash collateral received 0 0 0 0 (228 ) 0 Net amount $ 80 $ 204 $ 0 $ (2 ) $ (341 ) $ (1 ) Refer to Note 4 – Investments and Note 6 – Fair Value Measurements for further information. Fair Value Hedge Gains (Losses) We recognized in other income (expense), net the following gains (losses) on contracts designated as fair value hedges and their related hedged items: (In millions) Three Months Ended March 31, Nine Months Ended March 31, 2018 2017 2018 2017 Foreign Exchange Contracts Derivatives $ (260 ) $ (248 ) $ (224 ) $ 389 Hedged items 288 257 298 (349 ) Total amount of ineffectiveness $ 28 $ 9 $ 74 $ 40 Equity Contracts Derivatives $ 126 $ (19 ) $ (181 ) $ (36 ) Hedged items (126 ) 19 181 36 Total amount of ineffectiveness $ 0 $ 0 $ 0 $ 0 Amount of equity contracts excluded from effectiveness assessment $ 0 $ (25 ) $ 60 $ (29 ) Cash Flow Hedge Gains (Losses) We recognized the following gains (losses) on foreign exchange contracts designated as cash flow hedges: (In millions) Three Months Ended March 31, Nine Months Ended March 31, 2018 2017 2018 2017 Effective Portion Gains (losses) recognized in other comprehensive income (loss) (net of tax of $7, , $8, $ 14 $ (60 ) $ 29 $ 424 Gains reclassified from accumulated other comprehensive income (loss) into revenue 8 167 138 414 Amount Excluded from Effectiveness Assessment and Ineffective Portion Losses recognized in other income (expense), net (62 ) (121 ) (226 ) (275 ) We estimate that $34 million of net derivative gains included in AOCI as of March 31, 2018 will be reclassified into earnings within the following 12 months. No significant amounts of gains (losses) were reclassified from AOCI into earnings as a result of forecasted transactions that failed to occur during the three and nine months ended March 31, 2018. Non-designated Derivative Gains (Losses) Gains (losses) from changes in fair values of derivatives that are not designated as hedges are primarily recognized in other income (expense), net. These amounts are shown in the table below, with the exception of gains (losses) on derivatives presented in income statement line items other than other income (expense), net, which were immaterial for the periods presented. Other than those derivatives entered into for investment purposes, the gains (losses) below are generally economically offset by unrealized gains (losses) in the underlying available-for-sale securities and gains (losses) from foreign exchange rate changes on certain balance sheet amounts. (In millions) Three Months Ended March 31, Nine Months Ended March 31, 2018 2017 2018 2017 Foreign exchange contracts $ (64 ) $ (115 ) $ (248 ) $ (120 ) Equity contracts (11 ) (42 ) (89 ) (84 ) Interest-rate contracts (18 ) 8 (9 ) 2 Credit contracts 0 1 0 5 Other contracts 0 (18 ) 0 (18 ) Total $ (93 ) $ (166 ) $ (346 ) $ (215 ) |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 9 Months Ended |
Mar. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | NOTE 6 — FAIR VALUE MEASUREMENTS We account for certain assets and liabilities at fair value. The hierarchy below lists three levels of fair value based on the extent to which inputs used in measuring fair value are observable in the market. We categorize each of our fair value measurements in one of these three levels based on the lowest level input that is significant to the fair value measurement in its entirety. These levels are: • Level 1 – inputs are based upon unadjusted quoted prices for identical instruments in active markets. Our Level 1 non-derivative investments primarily include U.S. government securities, domestic and international equities, and mutual funds. Our Level 1 derivative assets and liabilities include those actively traded on exchanges. • Level 2 – inputs are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques (e.g. the Black-Scholes model) for which all significant inputs are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Where applicable, these models project future cash flows and discount the future amounts to a present value using market-based observable inputs including interest rate curves, credit spreads, foreign exchange rates, and forward and spot prices for currencies. Our Level 2 non-derivative investments consist primarily of corporate notes and bonds, foreign government bonds, commercial paper, mortgage- and asset-backed securities, and certificates of deposit. Our Level 2 derivative assets and liabilities primarily include certain over-the-counter option and swap contracts. • Level 3 – inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques, including option pricing models and discounted cash flow models. Our Level 3 non-derivative assets and liabilities primarily comprise investments in common and preferred stock, and goodwill and intangible assets, when they are recorded at fair value due to an impairment charge. Unobservable inputs used in the models are significant to the fair values of the assets and liabilities. We measure certain assets, including our cost and equity method investments, at fair value on a nonrecurring basis when they are deemed to be other-than-temporarily impaired. The fair values of these investments are determined based on valuation techniques using the best information available, and may include quoted market prices, market comparables, and discounted cash flow projections. An impairment charge is recorded when the cost of the investment exceeds its fair value and this condition is determined to be other-than-temporary. Our other current financial assets and current financial liabilities have fair values that approximate their carrying values. Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis The following tables present the fair value of our financial instruments that are measured at fair value on a recurring basis: (In millions) Level 1 Level 2 Level 3 Gross Fair Value Netting (a) Net Fair March 31, 2018 Assets Mutual funds $ 683 $ 0 $ 0 $ 683 $ 0 $ 683 Commercial paper 0 3,774 0 3,774 0 3,774 Certificates of deposit 0 2,022 0 2,022 0 2,022 U.S. government and agency securities 106,324 523 0 106,847 0 106,847 Foreign government bonds 20 4,699 0 4,719 0 4,719 Mortgage- and asset-backed securities 0 3,738 0 3,738 0 3,738 Corporate notes and bonds 0 6,067 7 6,074 0 6,074 Municipal securities 0 309 0 309 0 309 Common and preferred stock 1,188 0 18 1,206 0 1,206 Derivatives 4 246 1 251 (157 ) 94 Total $ 108,219 $ 21,378 $ 26 $ 129,623 $ (157 ) $ 129,466 Liabilities Derivatives and other $ 1 $ 327 $ 0 $ 328 $ (159 ) $ 169 (In millions) Level 1 Level 2 Level 3 Gross Fair Value Netting (a) Net Fair June 30, 2017 Assets Mutual funds $ 1,478 $ 0 $ 0 $ 1,478 $ 0 $ 1,478 Commercial paper 0 319 0 319 0 319 Certificates of deposit 0 1,358 0 1,358 0 1,358 U.S. government and agency securities 109,228 2,616 0 111,844 0 111,844 Foreign government bonds 0 5,187 0 5,187 0 5,187 Mortgage- and asset-backed securities 0 3,934 0 3,934 0 3,934 Corporate notes and bonds 0 4,829 1 4,830 0 4,830 Municipal securities 0 327 0 327 0 327 Common and preferred stock 2,414 1,994 18 4,426 0 4,426 Derivatives 1 508 0 509 (227 ) 282 Total $ 113,121 $ 21,072 $ 19 $ 134,212 $ (227 ) $ 133,985 Liabilities Derivatives and other $ 0 $ 345 $ 39 $ 384 $ (228 ) $ 156 (a) These amounts represent the impact of netting derivative assets and derivative liabilities when a legally enforceable master netting agreement exists and fair value adjustments related to our own credit risk and counterparty credit risk. The changes in our Level 3 financial instruments that are measured at fair value on a recurring basis were immaterial during the periods presented. The following table reconciles the total “Net Fair Value” of assets above to the balance sheet presentation of these same assets in Note 4 – Investments. (In millions) March 31, 2018 June 30, 2017 Net fair value of assets measured at fair value on a recurring basis $ 129,466 $ 133,985 Cash 4,104 3,624 Common and preferred stock measured at fair value on a nonrecurring basis 1,030 1,073 Other investments measured at fair value on a nonrecurring basis 581 523 Less derivative net assets classified as other current and long-term assets (92 ) (202 ) Other (1 ) 1 Recorded basis of investment components $ 135,088 $ 139,004 Financial Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis During the three and nine months ended March 31, 2018 and 2017, we did not record any material other-than-temporary impairments on financial assets required to be measured at fair value on a nonrecurring basis. |
INVENTORIES
INVENTORIES | 9 Months Ended |
Mar. 31, 2018 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | NOTE 7 — INVENTORIES The components of inventories were as follows: (In millions) March 31, 2018 June 30, 2017 Raw materials $ 627 $ 797 Work in process 67 145 Finished goods 1,390 1,239 Total $ 2,084 $ 2,181 |
BUSINESS COMBINATIONS
BUSINESS COMBINATIONS | 9 Months Ended |
Mar. 31, 2018 | |
Business Combinations [Abstract] | |
BUSINESS COMBINATIONS | NOTE 8 — BUSINESS COMBINATIONS On December 8, 2016, we completed our acquisition of all issued and outstanding shares of LinkedIn Corporation, the world’s largest professional network on the Internet, for a total purchase price of $27.0 billion. The purchase price consisted primarily of cash of $26.9 billion. The acquisition is expected to accelerate the growth of LinkedIn, Office 365, and Dynamics 365. The financial results of LinkedIn have been included in our consolidated financial statements since the date of the acquisition. |
GOODWILL
GOODWILL | 9 Months Ended |
Mar. 31, 2018 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
GOODWILL | NOTE 9 — GOODWILL Changes in the carrying amount of goodwill were as follows: (In millions) June 30, 2017 Acquisitions Other March 31, 2018 Productivity and Business Processes $ 23,739 $ 0 $ 85 $ 23,824 Intelligent Cloud 5,555 164 4 5,723 More Personal Computing 5,828 111 96 6,035 Total $ 35,122 $ 275 $ 185 $ 35,582 The measurement periods for the valuation of assets acquired and liabilities assumed end as soon as information on the facts and circumstances that existed as of the acquisition dates becomes available, but do not exceed 12 months. Adjustments in purchase price allocations may require a change in the amounts allocated to goodwill during the periods in which the adjustments are determined. Any change in the goodwill amounts resulting from foreign currency translations and purchase accounting adjustments are presented as “Other” in the above table. Also included in “Other” are business dispositions and transfers between segments due to reorganizations, as applicable. |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 9 Months Ended |
Mar. 31, 2018 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS | NOTE 10 — INTANGIBLE ASSETS The components of intangible assets, all of which are finite-lived, were as follows: (In millions) Gross Accumulated Net Gross Accumulated Net March 31, 2018 June 30, 2017 Technology-based (a) $ 7,183 $ (4,690 ) $ 2,493 $ 7,765 $ (4,318 ) $ 3,447 Customer-related 4,035 (1,073 ) 2,962 4,045 (692 ) 3,353 Marketing-related 4,031 (1,025 ) 3,006 4,016 (829 ) 3,187 Contract-based 667 (584 ) 83 841 (722 ) 119 Total $ 15,916 $ (7,372 ) $ 8,544 $ 16,667 $ (6,561 ) $ 10,106 (a) Technology-based intangible assets included $19 million and $59 million of net carrying amount of software to be sold, leased, or otherwise marketed as of March 31, 2018 and June 30, 2017, respectively. Intangible assets amortization expense was $560 million and $1.7 billion for the three and nine months ended March 31, 2018, respectively, and $560 million and $1.1 billion for the three and nine months ended March 31, 2017, respectively. The following table outlines the estimated future amortization expense related to intangible assets held as of March 31, 2018: (In millions) Year Ending June 30, 2018 (excluding the nine months ended March 31, 2018) $ 562 2019 1,717 2020 1,210 2021 1,020 2022 941 Thereafter 3,094 Total $ 8,544 |
DEBT
DEBT | 9 Months Ended |
Mar. 31, 2018 | |
Debt Disclosure [Abstract] | |
DEBT | NOTE 11 — DEBT Short-term Debt As of March 31, 2018, we had $231 million of commercial paper issued and outstanding, with a weighted average interest rate of 1.43% and maturities ranging from 139 days to 196 days. As of June 30, 2017, we had $9.1 billion of commercial paper issued and outstanding, with a weighted average interest rate of 1.01% and maturities ranging from 25 days to 264 days. The estimated fair value of this commercial paper approximates its carrying value. In October 2017, we entered into two new $5.0 billion credit facilities that expire on October 30, 2018 and October 31, 2022, respectively, which replaced our previous credit facilities. These credit facilities serve as a back-up for our commercial paper program. As of March 31, 2018, we were in compliance with the only financial covenant in both credit agreements, which requires us to maintain a coverage ratio of at least three times earnings before interest, taxes, depreciation, and amortization to interest expense, as defined in the credit agreements. No amounts were drawn against these credit facilities during any of the periods presented. Long-term Debt As of March 31, 2018, the total carrying value and estimated fair value of our long-term debt, including the current portion, were $76.9 billion and $78.9 billion, respectively. As of June 30, 2017, the total carrying value and estimated fair value of our long-term debt, including the current portion, were $77.1 billion and $80.3 billion, respectively. These estimated fair values are based on Level 2 inputs. The components of our long-term debt, including the current portion, and the associated interest rates were as follows: (In millions, except interest rates) Face Value March 31, 2018 Face Value June 30, 2017 Stated Interest Rate Effective Interest Rate Notes November 15, 2017 $ 0 $ 600 0.875% 1.084% May 1, 2018 450 450 1.000% 1.106% November 3, 2018 1,750 1,750 1.300% 1.396% December 6, 2018 1,250 1,250 1.625% 1.824% June 1, 2019 1,000 1,000 4.200% 4.379% August 8, 2019 2,500 2,500 1.100% 1.203% November 1, 2019 18 18 0.500% 0.500% February 6, 2020 1,500 1,500 1.850% 1.952% February 12, 2020 1,500 1,500 1.850% 1.935% October 1, 2020 1,000 1,000 3.000% 3.137% November 3, 2020 2,250 2,250 2.000% 2.093% February 8, 2021 500 500 4.000% 4.082% August 8, 2021 2,750 2,750 1.550% 1.642% December 6, 2021 (a) 2,153 1,996 2.125% 2.233% February 6, 2022 1,750 1,750 2.400% 2.520% February 12, 2022 1,500 1,500 2.375% 2.466% November 3, 2022 1,000 1,000 2.650% 2.717% November 15, 2022 750 750 2.125% 2.239% May 1, 2023 1,000 1,000 2.375% 2.465% August 8, 2023 1,500 1,500 2.000% 2.101% December 15, 2023 1,500 1,500 3.625% 3.726% February 6, 2024 2,250 2,250 2.875% 3.041% February 12, 2025 2,250 2,250 2.700% 2.772% November 3, 2025 3,000 3,000 3.125% 3.176% August 8, 2026 4,000 4,000 2.400% 2.464% February 6, 2027 4,000 4,000 3.300% 3.383% December 6, 2028 (a) 2,153 1,996 3.125% 3.218% May 2, 2033 ( a ) 676 627 2.625% 2.690% February 12, 2035 1,500 1,500 3.500% 3.604% November 3, 2035 1,000 1,000 4.200% 4.260% August 8, 2036 2,250 2,250 3.450% 3.510% February 6, 2037 2,500 2,500 4.100% 4.152% June 1, 2039 750 750 5.200% 5.240% October 1, 2040 1,000 1,000 4.500% 4.567% February 8, 2041 1,000 1,000 5.300% 5.361% November 15, 2042 900 900 3.500% 3.571% May 1, 2043 500 500 3.750% 3.829% December 15, 2043 500 500 4.875% 4.918% February 12, 2045 1,750 1,750 3.750% 3.800% November 3, 2045 3,000 3,000 4.450% 4.492% August 8, 2046 4,500 4,500 3.700% 3.743% February 6, 2047 3,000 3,000 4.250% 4.287% February 12, 2055 2,250 2,250 4.000% 4.063% November 3, 2055 1,000 1,000 4.750% 4.782% August 8, 2056 2,250 2,250 3.950% 4.033% February 6, 2057 2,000 2,000 4.500% 4.528% Total $ 77,600 $ 77,837 ( a ) Euro-denominated debt securities. The notes in the table above are senior unsecured obligations and rank equally with our other senior unsecured debt outstanding. Interest on these notes is paid semi-annually, except for the euro-denominated debt securities on which interest is paid annually. As of March 31, 2018 and June 30, 2017, the aggregate debt issuance costs and unamortized discount associated with our long-term debt, including the current portion, were $673 million and $715 million, respectively. |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Mar. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 12 — INCOME TAXES Income tax expense includes U.S. and international income taxes, and interest and penalties on uncertain tax positions. Certain income and expenses are not reported in tax returns and financial statements in the same year. The tax effect of such temporary differences is reported as deferred income taxes. Deferred tax assets are reported net of a valuation allowance when it is more likely than not that a tax benefit will not be realized. All deferred income taxes are classified as long-term on our consolidated balance sheets. Effective Tax Rate Our effective tax rate was 14% and 23% for the three months ended March 31, 2018 and 2017, respectively, and 70% and 21% for the nine months ended March 31, 2018 and 2017, respectively. The decrease in our effective tax rate for the current quarter compared to the prior year was primarily due to the reduction of the U.S. federal statutory tax rate as a result of the TCJA. The increase in our effective tax rate for the year-to-date compared to the prior year was primarily due to the net charge related to the enactment of the TCJA in the second quarter of fiscal year 2018. Our effective tax rate for the three months ended March 31, 2018 was lower than the U.S. federal statutory rate, primarily due to earnings taxed at lower rates in foreign jurisdictions resulting from producing and distributing our products and services through our foreign regional operations centers in Ireland, Singapore, and Puerto Rico. Our effective tax rate for the nine months ended March 31, 2018 was higher than the U.S. federal statutory rate, primarily due to the net charge related to the enactment of the TCJA in the second quarter of fiscal year 2018. Recent Tax Legislation On December 22, 2017, the TCJA was enacted into law, which significantly changes existing U.S. tax law and includes numerous provisions that affect our business, such as imposing a one-time transition tax on deemed repatriation of deferred foreign income, reducing the U.S. federal statutory tax rate, and adopting a territorial tax system. The TCJA required us to incur a one-time transition tax on deferred foreign income not previously subject to U.S. income tax at a rate of 15.5% for foreign cash and certain other net current assets, and 8% on the remaining income. The TCJA also reduced the U.S. federal statutory tax rate from 35% to 21% effective January 1, 2018. For fiscal year 2018, our blended U.S. federal statutory tax rate is 28%. This is the result of using the tax rate of 35% for the first and second quarter of fiscal year 2018 and the reduced tax rate of 21% for the third and fourth quarter of fiscal year 2018. The TCJA includes a provision to tax global intangible low-taxed income (“GILTI”) of foreign subsidiaries and a base erosion anti-abuse tax (“BEAT”) measure that taxes certain payments between a U.S. corporation and its subsidiaries. The GILTI and BEAT provisions of the TCJA will be effective for us beginning July 1, 2018. The TCJA was effective in the second quarter of fiscal year 2018. As of March 31, 2018, we have not completed our accounting for the tax effects of the TCJA. During the second quarter of fiscal year 2018, we recorded a provisional net charge based on reasonable estimates for those tax effects. We have not recorded any adjustments to our provisional net charge in the third quarter of fiscal year 2018. Due to the timing of the enactment and the complexity in applying the provisions of the TCJA, the provisional net charge is subject to revisions as we continue to complete our analysis of the TCJA, collect and prepare necessary data, and interpret any additional guidance issued by the U.S. Treasury Department, Internal Revenue Service (“IRS”), FASB, and other standard-setting and regulatory bodies. Adjustments may materially impact our provision for income taxes and effective tax rate in the period in which the adjustments are made. Our accounting for the tax effects of the TCJA will be completed during the measurement period, which should not extend beyond one year from the enactment date. During the second quarter of fiscal year 2018, we recorded an estimated net charge of $13.8 billion related to the TCJA, due to the impact of the one-time transition tax on the deemed repatriation of deferred foreign income of $17.8 billion, offset in part by the impact of changes in the tax rate of $4.0 billion, primarily on deferred tax assets and liabilities. We recorded an estimated $17.8 billion charge in the second quarter of fiscal year 2018 related to the transition tax, which was included in provision for income taxes on our consolidated income statements and income taxes on our consolidated balance sheets. We have not yet completed our accounting for the transition tax as our analysis of deferred foreign income is not complete. To calculate the transition tax, we estimated our deferred foreign income for fiscal year 2017 and for the first and second quarter of fiscal year 2018 because these tax returns are not complete or due. The fiscal year 2017 and fiscal year 2018 taxable income will be known once the respective tax returns are completed and filed. In addition, U.S. and foreign audit settlements may significantly impact the estimated transition tax. The impact of the U.S. and foreign audits on the transition tax will be known as the audits are concluded. In addition, we recorded an estimated $4.0 billion benefit in the second quarter of fiscal year 2018 from the impact of changes in the tax rate, primarily on deferred tax assets and liabilities, which was included in provision for income taxes on our consolidated income statements and deferred income taxes on our consolidated balance sheets. We remeasured our deferred taxes to reflect the reduced rate that will apply when these deferred taxes are settled or realized in future periods. We have not yet completed our accounting for the measurement of deferred taxes. To calculate the remeasurement of deferred taxes, we estimated when the existing deferred taxes will be settled or realized. The remeasurement of deferred taxes included in our financial statements will be subject to further revisions if our current estimates are different from our actual future operating results. The TCJA subjects a U.S. corporation to tax on its GILTI. Due to the complexity of the new GILTI tax rules, we are continuing to evaluate this provision of the TCJA and the application of GAAP. Under GAAP, we can make an accounting policy election to either treat taxes due on the GILTI inclusion as a current period expense, or factor such amounts into our measurement of deferred taxes. We elected the deferred method and recorded an estimated $454 million benefit in the second quarter of fiscal year 2018 related to GILTI, which is included in the net charge related to the TCJA. Uncertain Tax Positions While we settled a portion of the IRS audit for tax years 2004 to 2006 during the third quarter of fiscal year 2011, and a portion of the IRS audit for tax years 2007 to 2009 during the first quarter of fiscal year 2016, we remain under audit for those years. In the second quarter of fiscal year 2018, we settled a portion of the IRS audit for tax years 2010 to 2013. We continue to be subject to examination by the IRS for tax years 2010 to 2016. In February 2012, the IRS withdrew its 2011 Revenue Agents Report for tax years 2004 to 2006 and reopened the audit phase of the examination. As of March 31, 2018, the primary unresolved issue relates to transfer pricing, which could have a significant impact on our consolidated financial statements if not resolved favorably. We believe our allowances for income tax contingencies are adequate. We have not received a proposed assessment for the unresolved issues and do not expect a final resolution of these issues in the next 12 months. Based on the information currently available, we do not anticipate a significant increase or decrease to our tax contingencies for these issues within the next 12 months. We are subject to income tax in many jurisdictions outside the U.S. Our operations in certain jurisdictions remain subject to examination for tax years 1996 to 2017, some of which are currently under audit by local tax authorities. The resolutions of these audits are not expected to be material to our consolidated financial statements. Tax contingencies and other income tax liabilities were $14.5 billion and $13.5 billion as of March 31, 2018 and June 30, 2017, respectively, and are included in long-term income taxes on our consolidated balance sheets. This increase relates primarily to current period intercompany transfer pricing. |
RESTRUCTURING CHARGES
RESTRUCTURING CHARGES | 9 Months Ended |
Mar. 31, 2018 | |
Restructuring And Related Activities [Abstract] | |
RESTRUCTURING CHARGES | NOTE 13 — RESTRUCTURING CHARGES In June 2017, management approved a sales and marketing restructuring plan. In fiscal year 2017, we recorded employee severance expenses of $306 million primarily related to this sales and marketing restructuring plan. We do not expect to incur additional charges for this restructuring plan in subsequent years. The actions associated with this restructuring plan are expected to be completed by the end of fiscal year 2018. Changes in the restructuring liability were as follows: (In millions) Severance Other (a) Total Nine Months Ended March 31, 2018 Balance, beginning of period $ 373 $ 59 $ 432 Restructuring charges 0 0 0 Cash paid (373 ) (24 ) (397 ) Other 0 (7 ) (7 ) Balance, end of period $ 0 $ 28 $ 28 (a) Primarily reflects activities associated with the consolidation of our phone facilities, manufacturing operations, and contract termination costs. |
UNEARNED REVENUE
UNEARNED REVENUE | 9 Months Ended |
Mar. 31, 2018 | |
Revenue Recognition And Deferred Revenue [Abstract] | |
UNEARNED REVENUE | NOTE 14 — UNEARNED REVENUE Unearned revenue by segment was as follows: (In millions) March 31, June 30, Productivity and Business Processes $ 11,185 $ 12,692 Intelligent Cloud 9,987 11,152 More Personal Computing 2,783 2,812 Total $ 23,955 $ 26,656 The opening balance of unearned revenue was $22.2 billion as of July 1, 2016. Changes in unearned revenue were as follows: (In millions) Nine Months Ended March 31, 2018 Balance, beginning of period $ 26,656 Deferral of revenue 37,217 Recognition of unearned revenue (39,918 ) Balance, end of period $ 23,955 Revenue allocated to remaining performance obligations represents contracted revenue that has not yet been recognized (“contracted not recognized revenue”), which includes unearned revenue and amounts that will be invoiced and recognized as revenue in future periods. Contracted not recognized revenue was $61 billion as of March 31, 2018, of which we expect to recognize approximately 60% of the revenue over the next 12 months and the remainder thereafter. |
LEASES
LEASES | 9 Months Ended |
Mar. 31, 2018 | |
Leases [Abstract] | |
LEASES | NOTE 15 — LEASES We have operating and finance leases for datacenters, corporate offices, research and development facilities, retail stores, and certain equipment. Our leases have remaining lease terms of 1 year to 20 years, some of which include options to extend the leases for up to 5 years, and some of which include options to terminate the leases within 1 year. The components of lease expense were as follows: (In millions) Three Months Ended March 31, Nine Months Ended March 31, 2018 2017 2018 2017 Operating lease cost $ 395 $ 321 $ 1,182 $ 1,015 Finance lease cost: Amortization of right-of-use assets $ 70 $ 29 $ 175 $ 67 Interest on lease liabilities 47 19 121 46 Total finance lease cost $ 117 $ 48 $ 296 $ 113 Supplemental cash flow information related to leases was as follows: (In millions) Three Months Ended March 31, Nine Months Ended March 31, 2018 2017 2018 2017 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 388 $ 331 $ 1,132 $ 912 Operating cash flows from finance leases 46 19 121 46 Financing cash flows from finance leases 37 14 93 29 Right-of-use assets obtained in exchange for lease obligations: Operating leases 570 130 1,269 304 Finance leases 412 296 1,790 1,061 Supplemental balance sheet information related to leases was as follows: (In millions, except lease term and discount rate) March 31, June 30, Operating Leases Operating lease right-of-use assets $ 6,859 $ 6,555 Other current liabilities $ 1,382 $ 1,423 Operating lease liabilities 5,751 5,372 Total operating lease liabilities $ 7,133 $ 6,795 Finance Leases Property and equipment, gross $ 4,507 $ 2,658 Accumulated depreciation (336 ) (161 ) Property and equipment, net $ 4,171 $ 2,497 Other current liabilities $ 181 $ 113 Other long-term liabilities 4,150 2,425 Total finance lease liabilities $ 4,331 $ 2,538 Weighted Average Remaining Lease Term Operating leases 7 years 7 years Finance leases 14 years 13 years Weighted Average Discount Rate Operating leases 2.6% 2.5% Finance leases 5.3% 4.7% Maturities of lease liabilities were as follows: (In millions) Year Ending June 30, Operating Leases Finance Leases 2018 (excluding the nine months ended March 31, 2018) $ 388 $ 104 2019 1,472 384 2020 1,340 391 2021 1,076 399 2022 887 406 Thereafter 2,790 4,442 Total lease payments 7,953 6,126 Less imputed interest (820 ) (1,795 ) Total $ 7,133 $ 4,331 As of March 31, 2018, we have additional operating and finance leases, primarily for datacenters, that have not yet commenced of $845 million and $1.5 billion, respectively. These operating and finance leases |
CONTINGENCIES
CONTINGENCIES | 9 Months Ended |
Mar. 31, 2018 | |
Commitments And Contingencies Disclosure [Abstract] | |
CONTINGENCIES | NOTE 16 — CONTINGENCIES Patent and Intellectual Property Claims IPCom Patent Litigation IPCom GmbH & Co. (“IPCom”) is a German company that holds a large portfolio of mobile technology-related patents addressing a broad range of cellular technologies. IPCom has asserted 19 of these patents in litigation against Nokia Corporation (“Nokia”) and many of the leading cellular phone companies and operators. In April 2018, Microsoft and IPCom entered into a settlement agreement resolving all claims against us. Other Patent and Intellectual Property Claims In addition to the IPCom cases, there were 34 other patent infringement cases pending against Microsoft as of March 31, 2018. Antitrust, Unfair Competition, and Overcharge Class Actions Antitrust and unfair competition class action lawsuits were filed against us in British Columbia, Ontario, and Quebec, Canada. All three have been certified on behalf of Canadian indirect purchasers who acquired licenses for Microsoft operating system software and/or productivity application software between 1998 and 2010. The trial of the British Columbia action commenced in May 2016. The plaintiffs filed their case in chief in August 2016, setting out claims made, authorities, and evidence in support of their claims. A six-month oral hearing is expected to begin in summer 2018, consisting of cross examination on witness affidavits. The Ontario and Quebec cases are inactive. Other Antitrust Litigation and Claims China State Administration for Industry and Commerce Investigation In 2014, Microsoft was informed that China’s State Administration for Industry and Commerce (“SAIC”) had begun a formal investigation relating to China’s Anti-Monopoly Law, and the SAIC conducted onsite inspections of Microsoft offices in Beijing, Shanghai, Guangzhou, and Chengdu. SAIC has stated the investigation relates to compatibility, bundle sales, file verification issues related to Windows and Office software, and potentially other issues. Product-Related Litigation U.S. Cell Phone Litigation Microsoft Mobile Oy, a subsidiary of Microsoft, along with other handset manufacturers and network operators, is a defendant in 35 lawsuits filed in the Superior Court for the District of Columbia by individual plaintiffs who allege that radio emissions from cellular handsets caused their brain tumors and other adverse health effects. We assumed responsibility for these claims in our agreement to acquire Nokia’s Devices and Services business and have been substituted for the Nokia defendants. Nine of these cases were filed in 2002 and are consolidated for certain pre-trial proceedings; the remaining cases are stayed. In a separate 2009 decision, the Court of Appeals for the District of Columbia held that adverse health effect claims arising from the use of cellular handsets that operate within the U.S. Federal Communications Commission radio frequency emission guidelines (“FCC Guidelines”) are pre-empted by federal law. The plaintiffs allege that their handsets either operated outside the FCC Guidelines or were manufactured before the FCC Guidelines went into effect. The lawsuits also allege an industry-wide conspiracy to manipulate the science and testing around emission guidelines. In 2013, defendants in the consolidated cases moved to exclude plaintiffs’ expert evidence of general causation on the basis of flawed scientific methodologies. In 2014, the trial court granted in part and denied in part defendants’ motion to exclude plaintiffs’ general causation experts. The defendants filed an interlocutory appeal challenging the standard for evaluating expert scientific evidence, which the District of Columbia Court of Appeals heard en banc Canadian Cell Phone Class Action Microsoft Mobile Oy, along with other handset manufacturers and network operators, is a defendant in a 2013 class action lawsuit filed in the Supreme Court of British Columbia by a purported class of Canadians who have used cellular phones for at least 1,600 hours, including a subclass of users with brain tumors, alleging adverse health effects from cellular phone use. Microsoft was served with the complaint in June 2014 and has been substituted for the Nokia defendants. The litigation has been dormant for more than three years. Employment-Related Litigation Moussouris v. Microsoft Current and former female Microsoft employees in certain engineering and information technology roles brought this class action in federal court in Seattle in 2015, alleging systemic gender discrimination in pay and promotions. The plaintiffs moved to certify the class in October 2017. Microsoft filed an opposition in January 2018, attaching an expert report showing no statistically significant disparity in pay and promotions between similarly situated men and women. Microsoft filed a motion for summary judgment with respect to the named plaintiffs in March 2018. Other Contingencies We also are subject to a variety of other claims and suits that arise from time to time in the ordinary course of our business. Although management currently believes that resolving claims against us, individually or in aggregate, will not have a material adverse impact on our consolidated financial statements, these matters are subject to inherent uncertainties and management’s view of these matters may change in the future. As of March 31, 2018, we accrued aggregate legal liabilities of $371 million. While we intend to defend these matters vigorously, adverse outcomes that we estimate could reach approximately $1.3 billion in aggregate beyond recorded amounts are reasonably possible. Were unfavorable final outcomes to occur, there exists the possibility of a material adverse impact on our consolidated financial statements for the period in which the effects become reasonably estimable. |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 9 Months Ended |
Mar. 31, 2018 | |
Equity [Abstract] | |
STOCKHOLDERS' EQUITY | NOTE 17 — STOCKHOLDERS’ EQUITY Share Repurchases On September 16, 2013, our Board of Directors approved a share repurchase program authorizing up to $40.0 billion in share repurchases. This share repurchase program became effective on October 1, 2013, and was completed on December 22, 2016. On September 20, 2016, our Board of Directors approved a share repurchase program authorizing up to an additional $40.0 billion in share repurchases. This share repurchase program commenced on December 22, 2016 following completion of the prior program approved on September 16, 2013, has no expiration date, and may be suspended or discontinued at any time without notice. As of March 31, 2018, $30.3 billion remained of this $40.0 billion share repurchase program. We repurchased the following shares of common stock under the share repurchase programs: (In millions) Shares Amount Shares Amount Fiscal Year 2018 2017 First Quarter 22 $ 1,600 63 $ 3,550 Second Quarter 22 1,800 59 3,533 Third Quarter 34 3,100 25 1,600 Total 78 $ 6,500 147 $ 8,683 Shares repurchased beginning in the third quarter of fiscal year 2017 were under the share repurchase program approved September 20, 2016. Shares repurchased during the first and second quarter of fiscal year 2017 were under the share repurchase program approved September 16, 2013. Dividends Our Board of Directors declared the following dividends: Declaration Date Dividend Per Share Record Date Amount Payment Date Fiscal Year 2018 (in millions) September 19, 2017 $ 0.42 November 16, 2017 $ 3,238 December 14, 2017 November 29, 2017 0.42 February 15, 2018 3,232 March 8, 2018 March 12, 2018 0.42 May 17, 2018 3,230 June 14, 2018 Fiscal Year 2017 September 20, 2016 $ 0.39 November 17, 2016 $ 3,024 December 8, 2016 November 30, 2016 0.39 February 16, 2017 3,012 March 9, 2017 March 14, 2017 0.39 May 18, 2017 3,009 June 8, 2017 The dividend declared on March 12, 2018 was included in other current liabilities as of March 31, 2018. |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | 9 Months Ended |
Mar. 31, 2018 | |
Equity [Abstract] | |
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | NOTE 18 — ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) The following table summarizes the changes in accumulated other comprehensive income (loss) by component: (In millions) Three Months Ended March 31, Nine Months Ended March 31, 2018 2017 2018 2017 Derivatives Balance, beginning of period $ 21 $ 595 $ 134 $ 352 Unrealized gains (losses), net of tax of $7 $8 15 (60 ) 30 424 Reclassification adjustments for gains included in revenue (8 ) (167 ) (138 ) (414 ) Tax expense included in provision for income taxes 0 2 2 8 Amounts reclassified from accumulated other comprehensive income (8 ) (165 ) (136 ) (406 ) Net change related to derivatives, net of tax of $7 , $6 7 (225 ) (106 ) 18 Balance, end of period $ 28 $ 370 $ 28 $ 370 Investments Balance, beginning of period $ 659 $ 2,030 $ 1,825 $ 2,941 Unrealized gains (losses), net of tax of $(186) $(347) (644 ) 571 (961 ) 367 Reclassification adjustments for gains included in other income (expense), net (517 ) (779 ) (1,823 ) (1,867 ) Tax expense included in provision for income taxes 145 273 602 654 Amounts reclassified from accumulated other comprehensive income (372 ) (506 ) (1,221 ) (1,213 ) Net change related to investments, net of tax of $(331) $(949) (1,016 ) 65 (2,182 ) (846 ) Balance, end of period $ (357 ) $ 2,095 $ (357 ) $ 2,095 Translation Adjustments and Other Balance, beginning of period $ (1,079 ) $ (1,973 ) $ (1,332 ) $ (1,499 ) Translation adjustments and other, net of tax of $ 0 , $0, $(1) , 255 349 508 (125 ) Balance, end of period $ (824 ) $ (1,624 ) $ (824 ) $ (1,624 ) Accumulated other comprehensive income (loss), end of period $ (1,153 ) $ 841 $ (1,153 ) $ 841 |
SEGMENT INFORMATION AND GEOGRAP
SEGMENT INFORMATION AND GEOGRAPHIC DATA | 9 Months Ended |
Mar. 31, 2018 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION AND GEOGRAPHIC DATA | NOTE 19 — SEGMENT INFORMATION AND GEOGRAPHIC DATA In its operation of the business, management, including our chief operating decision maker, who is also our Chief Executive Officer, reviews certain financial information, including segmented internal profit and loss statements prepared on a basis not consistent with GAAP. During the periods presented, we reported our financial performance based on the following segments: Productivity and Business Processes, Intelligent Cloud, and More Personal Computing. Our reportable segments are described below. Productivity and Business Processes Our Productivity and Business Processes segment consists of products and services in our portfolio of productivity, communication, and information services, spanning a variety of devices and platforms. This segment primarily comprises: • Office Commercial, including Office 365 subscriptions and Office licensed on-premises, comprising Office, Exchange, SharePoint, Skype for Business, and Microsoft Teams, and related Client Access Licenses (“CALs”). • Office Consumer, including Office 365 subscriptions and Office licensed on-premises, and Office Consumer Services, including Skype, Outlook.com, and OneDrive. • LinkedIn, including Talent Solutions, Marketing Solutions, and Premium Subscriptions. • Dynamics business solutions, including Dynamics ERP on-premises, Dynamics CRM on-premises, and Dynamics 365, a set of cloud-based applications across ERP and CRM. Intelligent Cloud Our Intelligent Cloud segment consists of our public, private, and hybrid server products and cloud services that can power modern business. This segment primarily comprises: • Server products and cloud services, including Microsoft SQL Server, Windows Server, Visual Studio, System Center, and related CALs, and Azure. • Enterprise Services, including Premier Support Services and Microsoft Consulting Services. More Personal Computing Our More Personal Computing segment consists of products and services geared towards harmonizing the interests of end users, developers, and IT professionals across all devices. This segment primarily comprises: • Windows, including Windows original equipment manufacturer licensing and other non-volume licensing of the Windows operating system; Windows Commercial, comprising volume licensing of the Windows operating system, Windows cloud services, and other Windows commercial offerings; patent licensing; Windows Internet of Things (“IoT”); and MSN display advertising. • Devices, including Microsoft Surface, PC accessories, and other intelligent devices. • Gaming, including Xbox hardware and Xbox software and services, comprising Xbox Live transactions, subscriptions, and advertising (“Xbox Live”), video games, and third-party video game royalties. • Search advertising. Revenue and costs are generally directly attributed to our segments. However, due to the integrated structure of our business, certain revenue recognized and costs incurred by one segment may benefit other segments. Revenue from certain contracts is allocated among the segments based on the relative value of the underlying products and services, which can include allocation based on actual prices charged, prices when sold separately, or estimated costs plus a profit margin. Cost of revenue is allocated in certain cases based on a relative revenue methodology. Operating expenses that are allocated primarily include those relating to marketing of products and services from which multiple segments benefit, and are generally allocated based on relative gross margin. In addition, certain costs incurred at a corporate level that are identifiable and that benefit our segments are allocated to them. These allocated costs include costs of: legal, including settlements and fines; information technology; human resources; finance; excise taxes; field selling; shared facilities services; and customer service and support. Each allocation is measured differently based on the specific facts and circumstances of the costs being allocated. Certain corporate-level activity is not allocated to our segments, including impairment, integration, and restructuring expenses. Segment revenue and operating income were as follows during the periods presented: (In millions) Three Months Ended March 31, Nine Months Ended March 31, 2018 2017 2018 2017 Revenue Productivity and Business Processes $ 9,006 $ 7,707 $ 26,197 $ 21,322 Intelligent Cloud 7,896 6,730 22,613 19,585 More Personal Computing 9,917 8,775 31,465 30,059 Total $ 26,819 $ 23,212 $ 80,275 $ 70,966 Operating Income Productivity and Business Processes $ 3,115 $ 2,540 $ 9,458 $ 8,498 Intelligent Cloud 2,654 2,148 7,623 6,216 More Personal Computing 2,523 2,035 7,598 6,629 Total $ 8,292 $ 6,723 $ 24,679 $ 21,343 No sales to an individual customer or country other than the United States accounted for more than 10% of revenue for the three or nine months ended March 31, 2018 or 2017. Revenue, classified by the major geographic areas in which our customers are located, was as follows: (In millions) Three Months Ended March 31, Nine Months Ended March 31, 2018 2017 2018 2017 United States (a) $ 13,457 $ 12,298 $ 41,094 $ 37,628 Other countries 13,362 10,914 39,181 33,338 Total $ 26,819 $ 23,212 $ 80,275 $ 70,966 (a) Includes billings to original equipment manufacturers and certain multinational organizations because of the nature of these businesses and the impracticability of determining the geographic source of the revenue. Revenue from external customers, classified by significant product and service offerings, was as follows: (In millions) Three Months Ended March 31, Nine Months Ended March 31, 2018 2017 2018 2017 Office products and cloud services $ 7,088 $ 6,234 $ 20,739 $ 18,655 Server products and cloud services 6,343 5,297 18,139 15,319 Windows 4,612 4,253 14,094 13,701 Gaming 2,251 1,906 8,067 7,409 Search advertising 1,784 1,599 5,243 4,633 Enterprise Services 1,489 1,383 4,295 4,109 Devices 1,219 958 3,851 4,017 1,335 976 3,795 1,204 Other 698 606 2,052 1,919 Total $ 26,819 $ 23,212 $ 80,275 $ 70,966 Our commercial cloud revenue, which primarily comprises Office 365 commercial, Azure, Dynamics 365, and other cloud properties, was $6.0 billion and $16.3 billion for the three and nine months ended March 31, 2018, respectively, and $3.8 billion and $10.4 billion for the three and nine months ended March 31, 2017, respectively. These amounts are primarily included in Office products and cloud services and server products and cloud services in the table above. Assets are not allocated to segments for internal reporting presentations. A portion of amortization and depreciation is included with various other costs in an overhead allocation to each segment; it is impracticable for us to separately identify the amount of amortization and depreciation by segment that is included in the measure of segment profit or loss. |
ACCOUNTING POLICIES (Policies)
ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Accounting Principles | Accounting Principles Our unaudited interim consolidated financial statements and accompanying notes are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). In the opinion of management, the unaudited interim consolidated financial statements reflect all adjustments of a normal recurring nature that are necessary for a fair presentation of the results for the interim periods presented. Interim results are not necessarily indicative of results for a full year. The information included in this Form 10-Q should be read in conjunction with information included in the Microsoft Corporation 2017 Form 10-K filed with the U.S. Securities and Exchange Commission on August 2, 2017. We have recast certain prior period income tax liabilities as discussed in the Recent Tax Legislation section below. We have also recast prior period securities lending payables to other current liabilities on our consolidated balance sheets to conform to the current period presentation, with no impact on consolidated net income or cash flows. |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of Microsoft Corporation and its subsidiaries. Intercompany transactions and balances have been eliminated. Equity investments for which we are able to exercise significant influence over but do not control the investee and are not the primary beneficiary of the investee’s activities are accounted for using the equity method. Investments for which we are not able to exercise significant influence over the investee and which do not have readily determinable fair values are accounted for under the cost method. |
Estimates and Assumptions | Estimates and Assumptions Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. Examples of estimates and assumptions include: for revenue recognition, determining the nature and timing of satisfaction of performance obligations, and determining the standalone selling price (“SSP”) of performance obligations, variable consideration, and other obligations such as product returns and refunds; loss contingencies; product warranties; the fair value of and/or potential impairment of goodwill and intangible assets for our reporting units; product life cycles; useful lives of our tangible and intangible assets; allowances for doubtful accounts; the market value of, and demand for, our inventory; stock-based compensation forfeiture rates; when technological feasibility is achieved for our products; the potential outcome of future tax consequences of events that have been recognized on our consolidated financial statements or tax returns; and determining when investment impairments are other-than-temporary. Actual results and outcomes may differ from management’s estimates and assumptions. |
Product Revenue and Service and Other Revenue | Product Revenue and Service and Other Revenue Product revenue includes sales from operating systems; cross-device productivity applications; server applications; business solution applications; desktop and server management tools; software development tools; video games; and hardware such as PCs, tablets, gaming and entertainment consoles, other intelligent devices, and related accessories. Service and other revenue includes sales from cloud-based solutions that provide customers with software, services, platforms, and content such as Microsoft Office 365, Microsoft Azure, Microsoft Dynamics 365, and Xbox Live; solution support; and consulting services. Service and other revenue also includes sales from online advertising and LinkedIn. |
Revenue Recognition | Revenue Recognition Revenue is recognized upon transfer of control of promised products or services to customers in an amount that reflects the consideration we expect to receive in exchange for those products or services. We enter into contracts that can include various combinations of products and services, which are generally capable of being distinct and accounted for as separate performance obligations. Revenue is recognized net of allowances for returns and any taxes collected from customers, which are subsequently remitted to governmental authorities. Nature of Products and Services Licenses for on-premises software provide the customer with a right to use the software as it exists when made available to the customer. Customers may purchase perpetual licenses or subscribe to licenses, which provide customers with the same functionality and differ mainly in the duration over which the customer benefits from the software. Revenue from distinct on-premises licenses is recognized upfront at the point in time when the software is made available to the customer. In cases where we allocate revenue to software updates, primarily because the updates are provided at no additional charge, revenue is recognized as the updates are provided, which is generally ratably over the estimated life of the related device or license. Certain volume licensing programs, including Enterprise Agreements, include on-premises licenses combined with Software Assurance (“SA”). SA conveys rights to new software and upgrades released over the contract period and provides support, tools, and training to help customers deploy and use products more efficiently. On-premises licenses are considered distinct performance obligations when sold with SA. Revenue allocated to SA is generally recognized ratably over the contract period as customers simultaneously consume and receive benefits, given that SA comprises distinct performance obligations that are satisfied over time. Cloud services, which allow customers to use hosted software over the contract period without taking possession of the software, are provided on either a subscription or consumption basis. Revenue related to cloud services provided on a subscription basis is recognized ratably over the contract period. Revenue related to cloud services provided on a consumption basis, such as the amount of storage used in a period, is recognized based on the customer utilization of such resources. When cloud services require a significant level of integration and interdependency with software and the individual components are not considered distinct, all revenue is recognized over the period in which the cloud services are provided. Revenue from search advertising is recognized when the advertisement appears in the search results or when the action necessary to earn the revenue has been completed. Revenue from consulting services is recognized as services are provided. Our hardware is generally highly dependent on, and interrelated with, the underlying operating system and cannot function without the operating system. In these cases, the hardware and software license are accounted for as a single performance obligation and revenue is recognized at the point in time when ownership is transferred to resellers or directly to end customers through retail stores and online marketplaces. Refer to Note 19 – Segment Information and Geographic Data for further information, including revenue by significant product and service offering. Significant Judgments Our contracts with customers often include promises to transfer multiple products and services to a customer. Determining whether products and services are considered distinct performance obligations that should be accounted for separately versus together may require significant judgment. When a cloud-based service includes both on-premises software licenses and cloud services, judgment is required to determine whether the software license is considered distinct and accounted for separately, or not distinct and accounted for together with the cloud service and recognized over time. Certain cloud services, primarily Office 365, depend on a significant level of integration, interdependency, and interrelation between the desktop applications and cloud services, and are accounted for together as one performance obligation. Revenue from Office 365 is recognized ratably over the period in which the cloud services are provided. Judgment is required to determine the SSP for each distinct performance obligation. We use a single amount to estimate SSP for items that are not sold separately, including on-premises licenses sold with SA or software updates provided at no additional charge. We use a range of amounts to estimate SSP when we sell each of the products and services separately and need to determine whether there is a discount to be allocated based on the relative SSP of the various products and services. In instances where SSP is not directly observable, such as when we do not sell the product or service separately, we determine the SSP using information that may include market conditions and other observable inputs. We typically have more than one SSP for individual products and services due to the stratification of those products and services by customers and circumstances. In these instances, we may use information such as the size of the customer and geographic region in determining the SSP. Due to the various benefits from and the nature of our SA program, judgment is required to assess the pattern of delivery, including the exercise pattern of certain benefits across our portfolio of customers. Our products are generally sold with a right of return and we may provide other credits or incentives, which are accounted for as variable consideration when estimating the amount of revenue to recognize. Returns and credits are estimated at contract inception and updated at the end of each reporting period as additional information becomes available. Contract Balances Timing of revenue recognition may differ from the timing of invoicing to customers. We record a receivable when revenue is recognized prior to invoicing, or unearned revenue when revenue is recognized subsequent to invoicing. For multi-year agreements, we generally invoice customers annually at the beginning of each annual coverage period. We record a receivable related to revenue recognized for multi-year on-premises licenses as we have an unconditional right to invoice and receive payment in the future related to those licenses. The opening balance of current and long-term accounts receivable, net of allowance for doubtful accounts, was $22.3 billion as of July 1, 2016. As of March 31, 2018 and June 30, 2017, long-term accounts receivable, net of allowance for doubtful accounts, were $1.6 billion and $1.7 billion, respectively, and are included in other long-term assets on our consolidated balance sheets. The allowance for doubtful accounts reflects our best estimate of probable losses inherent in the accounts receivable balance. We determine the allowance based on known troubled accounts, historical experience, and other currently available evidence. Activity in the allowance for doubtful accounts was as follows: (In millions) Nine Months Ended March 31, 2018 Balance, beginning of period $ 361 Charged to costs and other 41 Write-offs (74 ) Balance, end of period $ 328 Reported as of March 31, 2018 Accounts receivable, net of allowance for doubtful accounts $ 311 Other long-term assets 17 Total $ 328 Unearned revenue comprises mainly unearned revenue related to volume licensing programs, which may include SA and cloud services. Unearned revenue is generally invoiced annually at the beginning of each contract period for multi-year agreements and recognized ratably over the coverage period. Unearned revenue also includes payments for consulting services to be performed in the future; LinkedIn subscriptions; Office 365 subscriptions; Xbox Live subscriptions; Windows 10 post-delivery support; Dynamics business solutions; Skype prepaid credits and subscriptions; and other offerings for which we have been paid in advance and earn the revenue when we transfer control of the product or service. Refer to Note 14 – Unearned Revenue for further information, including unearned revenue by segment and changes in unearned revenue during the period. Payment terms and conditions vary by contract type, although terms generally include a requirement of payment within 30 to 60 days. In instances where the timing of revenue recognition differs from the timing of invoicing, we have determined our contracts generally do not include a significant financing component. The primary purpose of our invoicing terms is to provide customers with simplified and predictable ways of purchasing our products and services, not to receive financing from our customers or to provide customers with financing. Examples include invoicing at the beginning of a subscription term with revenue recognized ratably over the contract period, and multi-year on-premises licenses that are invoiced annually with revenue recognized upfront. Assets Recognized from Costs to Obtain a Contract with a Customer We recognize an asset for the incremental costs of obtaining a contract with a customer if we expect the benefit of those costs to be longer than one year. We have determined that certain sales incentive programs meet the requirements to be capitalized. Total capitalized costs to obtain a contract were immaterial during the periods presented and are included in other current and long-term assets on our consolidated balance sheets. We apply a practical expedient to expense costs as incurred for costs to obtain a contract with a customer when the amortization period would have been one year or less. These costs include our internal sales force compensation program and certain partner sales incentive programs as we have determined annual compensation is commensurate with annual sales activities. |
Leases | Leases We determine if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use (“ROU”) assets, other current liabilities, and operating lease liabilities on our consolidated balance sheets. Finance leases are included in property and equipment, other current liabilities, and other long-term liabilities on our consolidated balance sheets. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. We have lease agreements with lease and non-lease components, which are generally accounted for separately. For certain equipment leases, such as vehicles, we account for the lease and non-lease components as a single lease component. Additionally, for certain equipment leases, we apply a portfolio approach to effectively account for the operating lease ROU assets and liabilities. |
Income Taxes | Recent Tax Legislation On December 22, 2017, the Tax Cuts and Jobs Act (“TCJA”) was enacted into law, which significantly changes existing U.S. tax law and includes numerous provisions that affect our business. Refer to Note 12 – Income Taxes for further discussion. As a result of the TCJA, we have recast certain prior period income tax liabilities on our consolidated balance sheets to conform to the current period presentation. Previously reported balances were impacted as follows: (In millions) As Previously Reported As Adjusted Balance Sheets June 30, 2017 Long-term income taxes $ 0 $ 13,485 Other long-term liabilities 17,034 3,549 These adjustments had no impact on our consolidated income statements or net cash from or used in operating, financing, or investing on our consolidated cash flows statements. Income tax expense includes U.S. and international income taxes, and interest and penalties on uncertain tax positions. Certain income and expenses are not reported in tax returns and financial statements in the same year. The tax effect of such temporary differences is reported as deferred income taxes. Deferred tax assets are reported net of a valuation allowance when it is more likely than not that a tax benefit will not be realized. All deferred income taxes are classified as long-term on our consolidated balance sheets. |
Recent Accounting Guidance | Recent Accounting Guidance Recently Adopted Accounting Guidance Leases In February 2016, the Financial Accounting Standards Board (“FASB”) issued a new standard related to leases to increase transparency and comparability among organizations by requiring the recognition of ROU assets and lease liabilities on the balance sheet. Most prominent among the changes in the standard is the recognition of ROU assets and lease liabilities by lessees for those leases classified as operating leases. Under the standard, disclosures are required to meet the objective of enabling users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases. We are also required to recognize and measure leases existing at, or entered into after, the beginning of the earliest comparative period presented using a modified retrospective approach, with certain practical expedients available. We elected to early adopt the standard effective July 1, 2017 concurrent with our adoption of the new standard related to revenue recognition. We elected the available practical expedients and implemented internal controls and key system functionality to enable the preparation of financial information on adoption. The standard had a material impact on our consolidated balance sheets, but did not have an impact on our consolidated income statements. The most significant impact was the recognition of ROU assets and lease liabilities for operating leases, while our accounting for finance leases remained substantially unchanged. Adoption of the standard required us to restate certain previously reported results, including the recognition of additional ROU assets and lease liabilities for operating leases. Refer to Impacts to Previously Reported Results below for the impact of adoption of the standard on our consolidated financial statements. Revenue from Contracts with Customers In May 2014, the FASB issued a new standard related to revenue recognition. Under the standard, revenue is recognized when a customer obtains control of promised goods or services in an amount that reflects the consideration the entity expects to receive in exchange for those goods or services. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. We elected to early adopt the standard effective July 1, 2017, using the full retrospective method, which required us to restate each prior reporting period presented. We implemented internal controls and key system functionality to enable the preparation of financial information on adoption. The most significant impact of the standard relates to our accounting for software license revenue. Specifically, for Windows 10, we recognize revenue predominantly at the time of billing and delivery rather than ratably over the life of the related device. For certain multi-year commercial software subscriptions that include both distinct software licenses and SA, we recognize license revenue at the time of contract execution rather than over the subscription period. Due to the complexity of certain of our commercial license subscription contracts, the actual revenue recognition treatment required under the standard depends on contract-specific terms and in some instances may vary from recognition at the time of billing. Revenue recognition related to our hardware, cloud offerings (such as Office 365), LinkedIn, and professional services remains substantially unchanged. Adoption of the standard using the full retrospective method required us to restate certain previously reported results, including the recognition of additional revenue and an increase in the provision for income taxes, primarily due to the net change in Windows 10 revenue recognition. In addition, adoption of the standard resulted in an increase in accounts receivable and other current and long-term assets, driven by unbilled receivables from upfront recognition of revenue for certain multi-year commercial software subscriptions that include both distinct software licenses and SA; a reduction of unearned revenue, driven by the upfront recognition of license revenue from Windows 10 and certain multi-year commercial software subscriptions; and an increase in deferred income taxes, driven by the upfront recognition of revenue. Refer to Impacts to Previously Reported Results below for the impact of adoption of the standard on our consolidated financial statements. Impacts to Previously Reported Results Adoption of the standards related to revenue recognition and leases impacted our previously reported results as follows: (In millions, except per share amounts) As Previously Reported New Revenue Standard Adjustment As Restated Income Statements Three Months Ended March 31, 2017 Revenue $ 22,090 $ 1,122 $ 23,212 Provision for income taxes 1,115 493 1,608 Net income 4,801 685 5,486 Diluted earnings per share 0.61 0.09 0.70 Nine Months Ended March 31, 2017 Revenue $ 66,633 $ 4,333 $ 70,966 Provision for income taxes 2,913 1,610 4,523 Net income 14,691 2,729 17,420 Diluted earnings per share 1.87 0.35 2.22 (In millions) As Previously Reported New Revenue Standard Adjustment New Lease Standard Adjustment As Restated Balance Sheets June 30, 2017 Accounts receivable, net of allowance for doubtful accounts $ 19,792 $ 2,639 $ 0 $ 22,431 Operating lease right-of-use assets 0 0 6,555 6,555 Other current and long-term assets 11,147 32 0 11,179 Unearned revenue 44,479 (17,823 ) 0 26,656 Deferred income taxes 531 5,203 0 5,734 Operating lease liabilities 0 0 5,372 5,372 Other current and long-term liabilities 23,464 (26 ) 1,183 24,621 Stockholders' equity 72,394 15,317 0 87,711 Adoption of the standards related to revenue recognition and leases had no impact to cash from or used in operating, financing, or investing on our consolidated cash flows statements. Recent Accounting Guidance Not Yet Adopted Financial Instruments – Targeted Improvements to Accounting for Hedging Activities In August 2017, the FASB issued new guidance related to accounting for hedging activities. This guidance expands strategies that qualify for hedge accounting, changes how many hedging relationships are presented in the financial statements, and simplifies the application of hedge accounting in certain situations. The standard will be effective for us beginning July 1, 2019, with early adoption permitted for any interim or annual period before the effective date. Adoption of the standard will be applied using a modified retrospective approach through a cumulative-effect adjustment to retained earnings as of the effective date. We are currently evaluating the impact of this standard on our consolidated financial statements, including accounting policies, processes, and systems. Accounting for Income Taxes – Intra-Entity Asset Transfers In October 2016, the FASB issued new guidance requiring an entity to recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs, rather than when the asset has been sold to an outside party. This guidance is effective for us beginning July 1, 2018, with early adoption permitted beginning July 1, 2017. We plan to adopt the guidance effective July 1, 2018. Adoption of the guidance will be applied using a modified retrospective approach through a cumulative-effect adjustment to retained earnings as of the effective date. A cumulative-effect adjustment will capture the write-off of income tax consequences deferred from past intra-entity transfers involving Financial Instruments – Credit Losses In June 2016, the FASB issued a new standard to replace the incurred loss impairment methodology under current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. We will be required to use a forward-looking expected credit loss model for accounts receivables, loans, and other financial instruments. Credit losses relating to available-for-sale debt securities will also be recorded through an allowance for credit losses rather than as a reduction in the amortized cost basis of the securities. The standard will be effective for us beginning July 1, 2020, with early adoption permitted beginning July 1, 2019. Adoption of the standard will be applied using a modified retrospective approach through a cumulative-effect adjustment to retained earnings as of the effective date to align our credit loss methodology with the new standard. We are currently evaluating the impact of this standard on our consolidated financial statements, including accounting policies, processes, and systems. Financial Instruments – Recognition, Measurement, Presentation, and Disclosure In January 2016, the FASB issued a new standard related to certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. Most prominent among the changes in the standard is the requirement for changes in the fair value of our equity investments, with certain exceptions, to be recognized through net income rather than other comprehensive income (“OCI”). Under the standard, equity investments that do not have a readily determinable fair value are eligible for the measurement alternative. Using the measurement alternative, investments without readily determinable fair values will be valued at cost, with adjustments for changes in price or impairments reflected through net income. The standard will be effective for us beginning July 1, 2018. Adoption of the standard will be applied using a modified retrospective approach through a cumulative-effect adjustment from accumulated other comprehensive income (“AOCI”) to retained earnings as of the effective date. A cumulative-effect adjustment will capture any previously held unrealized gains and losses held in AOCI related to our equity investments carried at fair value as well as the impact of recording the fair value of certain equity investments carried at cost. The remaining implementation matters are primarily related to establishing processes and controls around equity securities without readily determinable fair values. We expect to elect the measurement alternative for equity investments that do not have readily determinable fair values. The impact on our consolidated balance sheets upon adoption will depend on the unrealized gains and losses held in AOCI related to our equity investments on the date of adoption, and on any impact the new guidance may have on our equity investments carried at cost. See Note 4 – Investments for our current investment balances. The impact of the standard going forward on our consolidated income statement will be dependent on our equity investment holdings, with adjustments to fair value reflected through net income. Adoption of the standard is expected to have no impact to cash from or used in operating, financing or investing on our consolidated cash flows statements. |
Earnings Per Share | Basic earnings per share (“EPS”) is computed based on the weighted average number of shares of common stock outstanding during the period. Diluted EPS is computed based on the weighted average number of shares of common stock plus the effect of dilutive potential common shares outstanding during the period using the treasury stock method. Dilutive potential common shares include outstanding stock options and stock awards. |
Derivatives Instruments | Derivative instruments are recognized as either assets or liabilities and are measured at fair value. The accounting for changes in the fair value of a derivative depends on the intended use of the derivative and the resulting designation. For derivative instruments designated as fair value hedges, the gains (losses) are recognized in earnings in the periods of change together with the offsetting (losses) gains on the hedged items attributed to the risk being hedged. For options designated as fair value hedges, changes in the time value are excluded from the assessment of hedge effectiveness and are recognized in earnings. For derivative instruments designated as cash flow hedges, the effective portion of the gains (losses) on the derivatives is initially reported as a component of OCI and is subsequently recognized in earnings when the hedged exposure is recognized in earnings. For options designated as cash flow hedges, changes in the time value are excluded from the assessment of hedge effectiveness and are recognized in earnings. Gains (losses) on derivatives representing either hedge components excluded from the assessment of effectiveness or hedge ineffectiveness are recognized in earnings. For derivative instruments that are not designated as hedges, gains (losses) from changes in fair values are primarily recognized in other income (expense), net. Other than those derivatives entered into for investment purposes, the gains (losses) are generally economically offset by unrealized gains (losses) in the underlying available-for-sale securities, which are recorded as a component of OCI until the securities are sold or other-than-temporarily impaired, at which time the amounts are reclassified from AOCI into other income (expense), net. |
Fair Value Measurements | We account for certain assets and liabilities at fair value. The hierarchy below lists three levels of fair value based on the extent to which inputs used in measuring fair value are observable in the market. We categorize each of our fair value measurements in one of these three levels based on the lowest level input that is significant to the fair value measurement in its entirety. These levels are: • Level 1 – inputs are based upon unadjusted quoted prices for identical instruments in active markets. Our Level 1 non-derivative investments primarily include U.S. government securities, domestic and international equities, and mutual funds. Our Level 1 derivative assets and liabilities include those actively traded on exchanges. • Level 2 – inputs are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques (e.g. the Black-Scholes model) for which all significant inputs are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Where applicable, these models project future cash flows and discount the future amounts to a present value using market-based observable inputs including interest rate curves, credit spreads, foreign exchange rates, and forward and spot prices for currencies. Our Level 2 non-derivative investments consist primarily of corporate notes and bonds, foreign government bonds, commercial paper, mortgage- and asset-backed securities, and certificates of deposit. Our Level 2 derivative assets and liabilities primarily include certain over-the-counter option and swap contracts. • Level 3 – inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques, including option pricing models and discounted cash flow models. Our Level 3 non-derivative assets and liabilities primarily comprise investments in common and preferred stock, and goodwill and intangible assets, when they are recorded at fair value due to an impairment charge. Unobservable inputs used in the models are significant to the fair values of the assets and liabilities. We measure certain assets, including our cost and equity method investments, at fair value on a nonrecurring basis when they are deemed to be other-than-temporarily impaired. The fair values of these investments are determined based on valuation techniques using the best information available, and may include quoted market prices, market comparables, and discounted cash flow projections. An impairment charge is recorded when the cost of the investment exceeds its fair value and this condition is determined to be other-than-temporary. Our other current financial assets and current financial liabilities have fair values that approximate their carrying values. |
Segment Reporting | Revenue and costs are generally directly attributed to our segments. However, due to the integrated structure of our business, certain revenue recognized and costs incurred by one segment may benefit other segments. Revenue from certain contracts is allocated among the segments based on the relative value of the underlying products and services, which can include allocation based on actual prices charged, prices when sold separately, or estimated costs plus a profit margin. Cost of revenue is allocated in certain cases based on a relative revenue methodology. Operating expenses that are allocated primarily include those relating to marketing of products and services from which multiple segments benefit, and are generally allocated based on relative gross margin. In addition, certain costs incurred at a corporate level that are identifiable and that benefit our segments are allocated to them. These allocated costs include costs of: legal, including settlements and fines; information technology; human resources; finance; excise taxes; field selling; shared facilities services; and customer service and support. Each allocation is measured differently based on the specific facts and circumstances of the costs being allocated. Certain corporate-level activity is not allocated to our segments, including impairment, integration, and restructuring expenses. Assets are not allocated to segments for internal reporting presentations. A portion of amortization and depreciation is included with various other costs in an overhead allocation to each segment; it is impracticable for us to separately identify the amount of amortization and depreciation by segment that is included in the measure of segment profit or loss. |
ACCOUNTING POLICIES (Tables)
ACCOUNTING POLICIES (Tables) | 9 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Allowance for Doubtful Accounts | Activity in the allowance for doubtful accounts was as follows: (In millions) Nine Months Ended March 31, 2018 Balance, beginning of period $ 361 Charged to costs and other 41 Write-offs (74 ) Balance, end of period $ 328 Reported as of March 31, 2018 Accounts receivable, net of allowance for doubtful accounts $ 311 Other long-term assets 17 Total $ 328 |
Impact of Tax Cuts and Jobs Act on Previously Reported Balances of Prior Period Income Tax Liabilities | As a result of the TCJA, we have recast certain prior period income tax liabilities on our consolidated balance sheets to conform to the current period presentation. Previously reported balances were impacted as follows: (In millions) As Previously Reported As Adjusted Balance Sheets June 30, 2017 Long-term income taxes $ 0 $ 13,485 Other long-term liabilities 17,034 3,549 |
Impacts of Adoption of Standards Related to Revenue Recognition and Leases to Previously Reported Results | Adoption of the standards related to revenue recognition and leases impacted our previously reported results as follows: (In millions, except per share amounts) As Previously Reported New Revenue Standard Adjustment As Restated Income Statements Three Months Ended March 31, 2017 Revenue $ 22,090 $ 1,122 $ 23,212 Provision for income taxes 1,115 493 1,608 Net income 4,801 685 5,486 Diluted earnings per share 0.61 0.09 0.70 Nine Months Ended March 31, 2017 Revenue $ 66,633 $ 4,333 $ 70,966 Provision for income taxes 2,913 1,610 4,523 Net income 14,691 2,729 17,420 Diluted earnings per share 1.87 0.35 2.22 (In millions) As Previously Reported New Revenue Standard Adjustment New Lease Standard Adjustment As Restated Balance Sheets June 30, 2017 Accounts receivable, net of allowance for doubtful accounts $ 19,792 $ 2,639 $ 0 $ 22,431 Operating lease right-of-use assets 0 0 6,555 6,555 Other current and long-term assets 11,147 32 0 11,179 Unearned revenue 44,479 (17,823 ) 0 26,656 Deferred income taxes 531 5,203 0 5,734 Operating lease liabilities 0 0 5,372 5,372 Other current and long-term liabilities 23,464 (26 ) 1,183 24,621 Stockholders' equity 72,394 15,317 0 87,711 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 9 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [Abstract] | |
Basic and Diluted Earnings Per Share | The components of basic and diluted EPS were as follows: (In millions, except per share amounts) Three Months Ended March 31, Nine Months Ended March 31, 2018 2017 2018 2017 Net income available for common shareholders (A) $ 7,424 $ 5,486 $ 7,698 $ 17,420 Weighted average outstanding shares of common stock (B) 7,698 7,725 7,706 7,756 Dilutive effect of stock-based awards 96 88 92 84 Common stock and common stock equivalents (C) 7,794 7,813 7,798 7,840 Earnings Per Share Basic (A/B) $ 0.96 $ 0.71 $ 1.00 $ 2.25 Diluted (A/C) $ 0.95 $ 0.70 $ 0.99 $ 2.22 |
OTHER INCOME (EXPENSE), NET (Ta
OTHER INCOME (EXPENSE), NET (Tables) | 9 Months Ended |
Mar. 31, 2018 | |
Other Income And Expenses [Abstract] | |
Components of Other Income (Expense), Net | The components of other income (expense), net were as follows: (In millions) Three Months Ended March 31, Nine Months Ended March 31, 2018 2017 2018 2017 Dividends and interest income $ 575 $ 380 $ 1,578 $ 984 Interest expense (691 ) (609 ) (2,061 ) (1,567 ) Net recognized gains on investments 510 790 1,851 1,893 Net losses on derivatives (72 ) (200 ) (206 ) (340 ) Net gains (losses) on foreign currency remeasurements 20 50 (49 ) (143 ) Other, net 7 (40 ) 2 (227 ) Total $ 349 $ 371 $ 1,115 $ 600 |
Net Recognized Gains (Losses) on Investments | Following are details of net recognized gains (losses) on investments during the periods reported: (In millions) Three Months Ended March 31, Nine Months Ended March 31, 2018 2017 2018 2017 Other-than-temporary impairments of investments $ (17 ) $ (15 ) $ (47 ) $ (54 ) Realized gains from sales of available-for-sale securities 875 938 2,612 2,272 Realized losses from sales of available-for-sale securities (348 ) (133 ) (714 ) (325 ) Total $ 510 $ 790 $ 1,851 $ 1,893 |
INVESTMENTS (Tables)
INVESTMENTS (Tables) | 9 Months Ended |
Mar. 31, 2018 | |
Investments Debt And Equity Securities [Abstract] | |
Investment Components, Including Associated Derivatives | The components of investments, including associated derivatives, were as follows: (In millions) Cost Basis Unrealized Gains Unrealized Losses Recorded Basis Cash and Cash Equivalents Short-term Investments Equity and Other Investments March 31, 2018 Cash $ 4,104 $ 0 $ 0 $ 4,104 $ 4,104 $ 0 $ 0 Mutual funds 683 0 0 683 683 0 0 Commercial paper 3,774 0 0 3,774 3,158 616 0 Certificates of deposit 2,022 0 0 2,022 1,156 866 0 U.S. government and agency securities 108,056 31 (1,239 ) 106,848 117 106,731 0 Foreign government bonds 4,671 3 (12 ) 4,662 3 4,659 0 Mortgage- and asset-backed securities 3,750 5 (12 ) 3,743 0 3,743 0 Corporate notes and bonds 6,139 27 (43 ) 6,123 0 6,123 0 Municipal securities 269 41 (1 ) 309 0 309 0 Common and preferred stock 1,324 917 (4 ) 2,237 0 0 2,237 Other investments 583 0 0 583 0 2 581 Total $ 135,375 $ 1,024 $ (1,311 ) $ 135,088 $ 9,221 $ 123,049 $ 2,818 (In millions) Cost Basis Unrealized Gains Unrealized Losses Recorded Basis Cash and Cash Equivalents Short-term Investments Equity and Other Investments June 30, 2017 Cash $ 3,624 $ 0 $ 0 $ 3,624 $ 3,624 $ 0 $ 0 Mutual funds 1,478 0 0 1,478 1,478 0 0 Commercial paper 319 0 0 319 69 250 0 Certificates of deposit 1,358 0 0 1,358 972 386 0 U.S. government and agency securities 112,119 85 (360 ) 111,844 16 111,828 0 Foreign government bonds 5,276 2 (13 ) 5,265 1,504 3,761 0 Mortgage- and asset-backed securities 3,921 14 (4 ) 3,931 0 3,931 0 Corporate notes and bonds 4,786 61 (12 ) 4,835 0 4,835 0 Municipal securities 284 43 0 327 0 327 0 Common and preferred stock 2,472 3,062 (34 ) 5,500 0 0 5,500 Other investments 523 0 0 523 0 0 523 Total $ 136,160 $ 3,267 $ (423 ) $ 139,004 $ 7,663 $ 125,318 $ 6,023 |
Unrealized Losses on Investments | Investments with continuous unrealized losses for less than 12 months and 12 months or greater and their related fair values were as follows: Less than 12 Months 12 Months or Greater Total (In millions) Fair Value Unrealized Fair Value Unrealized Total March 31, 2018 U.S. government and agency securities $ 95,908 $ (1,169 ) $ 2,031 $ (70 ) $ 97,939 $ (1,239 ) Foreign government bonds 1,261 (3 ) 26 (9 ) 1,287 (12 ) Mortgage- and asset-backed securities 1,614 (7 ) 147 (5 ) 1,761 (12 ) Corporate notes and bonds 2,463 (30 ) 430 (13 ) 2,893 (43 ) Municipal securities 36 (1 ) 0 0 36 (1 ) Common and preferred stock 19 0 23 (4 ) 42 (4 ) Total $ 101,301 $ (1,210 ) $ 2,657 $ (101 ) $ 103,958 $ (1,311 ) Less than 12 Months 12 Months or Greater Total (In millions) Fair Value Unrealized Fair Value Unrealized Total June 30, 2017 U.S. government and agency securities $ 87,558 $ (348 ) $ 371 $ (12 ) $ 87,929 $ (360 ) Foreign government bonds 4,006 (2 ) 23 (11 ) 4,029 (13 ) Mortgage- and asset-backed securities 1,068 (3 ) 198 (1 ) 1,266 (4 ) Corporate notes and bonds 669 (8 ) 177 (4 ) 846 (12 ) Common and preferred stock 69 (6 ) 148 (28 ) 217 (34 ) Total $ 93,370 $ (367 ) $ 917 $ (56 ) $ 94,287 $ (423 ) |
Debt Investment Maturities | Debt Investment Maturities (In millions) Cost Basis Estimated Fair Value March 31, 2018 Due in one year or less $ 16,698 $ 16,670 Due after one year through five years 94,607 93,722 Due after five years through 10 years 16,427 16,133 Due after 10 years 949 956 Total $ 128,681 $ 127,481 |
DERIVATIVES (Tables)
DERIVATIVES (Tables) | 9 Months Ended |
Mar. 31, 2018 | |
Fair Values of Derivative Instruments | The following table presents the fair values of derivative instruments designated as hedging instruments (“designated hedge derivatives”) and not designated as hedging instruments (“non-designated hedge derivatives”). The fair values exclude the impact of netting derivative assets and liabilities when a legally enforceable master netting agreement exists and fair value adjustments related to our own credit risk and counterparty credit risk: Assets Liabilities (In millions) Short-term Other Equity and Other Long-term Assets Other Other Long-term Liabilities March 31, 2018 Non-designated Hedge Derivatives Foreign exchange contracts $ 3 $ 67 $ 0 $ 59 $ (142 ) $ (9 ) Equity contracts 4 0 0 0 (4 ) 0 Interest rate contracts 15 0 0 0 (2 ) 0 Credit contracts 4 0 0 0 0 0 Total $ 26 $ 67 $ 0 $ 59 $ (148 ) $ (9 ) Designated Hedge Derivatives Foreign exchange contracts $ 10 $ 71 $ 0 $ 6 $ (70 ) $ (6 ) Equity contracts 0 0 12 0 (95 ) 0 Total $ 10 $ 71 $ 12 $ 6 $ (165 ) $ (6 ) Total gross amounts of derivatives $ 36 $ 138 $ 12 $ 65 $ (313 ) $ (15 ) Gross derivatives either offset or subject to an enforceable master netting agreement $ 31 $ 138 $ 12 $ 65 $ (313 ) $ (15 ) Gross amounts of derivatives offset on the balance sheet (34 ) (102 ) (12 ) (9 ) 150 9 Net amounts presented on the balance sheet (3 ) 36 0 56 (163 ) (6 ) Gross amounts of derivatives not offset on the balance sheet 0 0 0 0 0 0 Cash collateral received 0 0 0 0 (61 ) 0 Net amount $ (3 ) $ 36 $ 0 $ 56 $ (224 ) $ (6 ) Assets Liabilities (In millions) Short-term Other Equity and Other Long-term Assets Other Other Long-term Liabilities June 30, 2017 Non-designated Hedge Derivatives Foreign exchange contracts $ 9 $ 203 $ 0 $ 6 $ (134 ) $ (8 ) Equity contracts 3 0 0 0 (6 ) 0 Interest rate contracts 3 0 0 0 (7 ) 0 Credit contracts 5 0 0 0 (1 ) 0 Total $ 20 $ 203 $ 0 $ 6 $ (148 ) $ (8 ) Designated Hedge Derivatives Foreign exchange contracts $ 80 $ 133 $ 0 $ 0 $ (3 ) $ 0 Equity contracts 0 0 67 0 (186 ) 0 Total $ 80 $ 133 $ 67 $ 0 $ (189 ) $ 0 Total gross amounts of derivatives $ 100 $ 336 $ 67 $ 6 $ (337 ) $ (8 ) Gross derivatives either offset or subject to an enforceable master netting agreement $ 100 $ 336 $ 67 $ 6 $ (334 ) $ (8 ) Gross amounts of derivatives offset on the balance sheet (20 ) (132 ) (67 ) (8 ) 221 7 Net amounts presented on the balance sheet 80 204 0 (2 ) (113 ) (1 ) Gross amounts of derivatives not offset on the balance sheet 0 0 0 0 0 0 Cash collateral received 0 0 0 0 (228 ) 0 Net amount $ 80 $ 204 $ 0 $ (2 ) $ (341 ) $ (1 ) |
Non-designated Hedge Derivatives | |
Gains (Losses) on Derivative Instruments | Gains (losses) from changes in fair values of derivatives that are not designated as hedges are primarily recognized in other income (expense), net. These amounts are shown in the table below, with the exception of gains (losses) on derivatives presented in income statement line items other than other income (expense), net, which were immaterial for the periods presented. Other than those derivatives entered into for investment purposes, the gains (losses) below are generally economically offset by unrealized gains (losses) in the underlying available-for-sale securities and gains (losses) from foreign exchange rate changes on certain balance sheet amounts. (In millions) Three Months Ended March 31, Nine Months Ended March 31, 2018 2017 2018 2017 Foreign exchange contracts $ (64 ) $ (115 ) $ (248 ) $ (120 ) Equity contracts (11 ) (42 ) (89 ) (84 ) Interest-rate contracts (18 ) 8 (9 ) 2 Credit contracts 0 1 0 5 Other contracts 0 (18 ) 0 (18 ) Total $ (93 ) $ (166 ) $ (346 ) $ (215 ) |
Fair value hedging | |
Gains (Losses) on Derivative Instruments | We recognized in other income (expense), net the following gains (losses) on contracts designated as fair value hedges and their related hedged items: (In millions) Three Months Ended March 31, Nine Months Ended March 31, 2018 2017 2018 2017 Foreign Exchange Contracts Derivatives $ (260 ) $ (248 ) $ (224 ) $ 389 Hedged items 288 257 298 (349 ) Total amount of ineffectiveness $ 28 $ 9 $ 74 $ 40 Equity Contracts Derivatives $ 126 $ (19 ) $ (181 ) $ (36 ) Hedged items (126 ) 19 181 36 Total amount of ineffectiveness $ 0 $ 0 $ 0 $ 0 Amount of equity contracts excluded from effectiveness assessment $ 0 $ (25 ) $ 60 $ (29 ) |
Cash flow hedging | |
Gains (Losses) on Derivative Instruments | We recognized the following gains (losses) on foreign exchange contracts designated as cash flow hedges: (In millions) Three Months Ended March 31, Nine Months Ended March 31, 2018 2017 2018 2017 Effective Portion Gains (losses) recognized in other comprehensive income (loss) (net of tax of $7, , $8, $ 14 $ (60 ) $ 29 $ 424 Gains reclassified from accumulated other comprehensive income (loss) into revenue 8 167 138 414 Amount Excluded from Effectiveness Assessment and Ineffective Portion Losses recognized in other income (expense), net (62 ) (121 ) (226 ) (275 ) |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 9 Months Ended |
Mar. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Financial Assets and Liabilities Measured at Fair Value on Recurring Basis | The following tables present the fair value of our financial instruments that are measured at fair value on a recurring basis: (In millions) Level 1 Level 2 Level 3 Gross Fair Value Netting (a) Net Fair March 31, 2018 Assets Mutual funds $ 683 $ 0 $ 0 $ 683 $ 0 $ 683 Commercial paper 0 3,774 0 3,774 0 3,774 Certificates of deposit 0 2,022 0 2,022 0 2,022 U.S. government and agency securities 106,324 523 0 106,847 0 106,847 Foreign government bonds 20 4,699 0 4,719 0 4,719 Mortgage- and asset-backed securities 0 3,738 0 3,738 0 3,738 Corporate notes and bonds 0 6,067 7 6,074 0 6,074 Municipal securities 0 309 0 309 0 309 Common and preferred stock 1,188 0 18 1,206 0 1,206 Derivatives 4 246 1 251 (157 ) 94 Total $ 108,219 $ 21,378 $ 26 $ 129,623 $ (157 ) $ 129,466 Liabilities Derivatives and other $ 1 $ 327 $ 0 $ 328 $ (159 ) $ 169 (In millions) Level 1 Level 2 Level 3 Gross Fair Value Netting (a) Net Fair June 30, 2017 Assets Mutual funds $ 1,478 $ 0 $ 0 $ 1,478 $ 0 $ 1,478 Commercial paper 0 319 0 319 0 319 Certificates of deposit 0 1,358 0 1,358 0 1,358 U.S. government and agency securities 109,228 2,616 0 111,844 0 111,844 Foreign government bonds 0 5,187 0 5,187 0 5,187 Mortgage- and asset-backed securities 0 3,934 0 3,934 0 3,934 Corporate notes and bonds 0 4,829 1 4,830 0 4,830 Municipal securities 0 327 0 327 0 327 Common and preferred stock 2,414 1,994 18 4,426 0 4,426 Derivatives 1 508 0 509 (227 ) 282 Total $ 113,121 $ 21,072 $ 19 $ 134,212 $ (227 ) $ 133,985 Liabilities Derivatives and other $ 0 $ 345 $ 39 $ 384 $ (228 ) $ 156 (a) These amounts represent the impact of netting derivative assets and derivative liabilities when a legally enforceable master netting agreement exists and fair value adjustments related to our own credit risk and counterparty credit risk. |
Reconciliation of Total Assets Measured at Fair Value on Recurring Basis to Balance Sheet Presentation | The following table reconciles the total “Net Fair Value” of assets above to the balance sheet presentation of these same assets in Note 4 – Investments. (In millions) March 31, 2018 June 30, 2017 Net fair value of assets measured at fair value on a recurring basis $ 129,466 $ 133,985 Cash 4,104 3,624 Common and preferred stock measured at fair value on a nonrecurring basis 1,030 1,073 Other investments measured at fair value on a nonrecurring basis 581 523 Less derivative net assets classified as other current and long-term assets (92 ) (202 ) Other (1 ) 1 Recorded basis of investment components $ 135,088 $ 139,004 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 9 Months Ended |
Mar. 31, 2018 | |
Inventory Disclosure [Abstract] | |
Components of Inventories | The components of inventories were as follows: (In millions) March 31, 2018 June 30, 2017 Raw materials $ 627 $ 797 Work in process 67 145 Finished goods 1,390 1,239 Total $ 2,084 $ 2,181 |
GOODWILL (Tables)
GOODWILL (Tables) | 9 Months Ended |
Mar. 31, 2018 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Carrying Amount of Goodwill | Changes in the carrying amount of goodwill were as follows: (In millions) June 30, 2017 Acquisitions Other March 31, 2018 Productivity and Business Processes $ 23,739 $ 0 $ 85 $ 23,824 Intelligent Cloud 5,555 164 4 5,723 More Personal Computing 5,828 111 96 6,035 Total $ 35,122 $ 275 $ 185 $ 35,582 |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 9 Months Ended |
Mar. 31, 2018 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Finite-Lived Intangible Assets | The components of intangible assets, all of which are finite-lived, were as follows: (In millions) Gross Accumulated Net Gross Accumulated Net March 31, 2018 June 30, 2017 Technology-based (a) $ 7,183 $ (4,690 ) $ 2,493 $ 7,765 $ (4,318 ) $ 3,447 Customer-related 4,035 (1,073 ) 2,962 4,045 (692 ) 3,353 Marketing-related 4,031 (1,025 ) 3,006 4,016 (829 ) 3,187 Contract-based 667 (584 ) 83 841 (722 ) 119 Total $ 15,916 $ (7,372 ) $ 8,544 $ 16,667 $ (6,561 ) $ 10,106 (a) Technology-based intangible assets included $19 million and $59 million of net carrying amount of software to be sold, leased, or otherwise marketed as of March 31, 2018 and June 30, 2017, respectively. |
Estimated Future Amortization Expense Related to Intangible Assets | The following table outlines the estimated future amortization expense related to intangible assets held as of March 31, 2018: (In millions) Year Ending June 30, 2018 (excluding the nine months ended March 31, 2018) $ 562 2019 1,717 2020 1,210 2021 1,020 2022 941 Thereafter 3,094 Total $ 8,544 |
DEBT (Tables)
DEBT (Tables) | 9 Months Ended |
Mar. 31, 2018 | |
Debt Disclosure [Abstract] | |
Long-term Debt | The components of our long-term debt, including the current portion, and the associated interest rates were as follows: (In millions, except interest rates) Face Value March 31, 2018 Face Value June 30, 2017 Stated Interest Rate Effective Interest Rate Notes November 15, 2017 $ 0 $ 600 0.875% 1.084% May 1, 2018 450 450 1.000% 1.106% November 3, 2018 1,750 1,750 1.300% 1.396% December 6, 2018 1,250 1,250 1.625% 1.824% June 1, 2019 1,000 1,000 4.200% 4.379% August 8, 2019 2,500 2,500 1.100% 1.203% November 1, 2019 18 18 0.500% 0.500% February 6, 2020 1,500 1,500 1.850% 1.952% February 12, 2020 1,500 1,500 1.850% 1.935% October 1, 2020 1,000 1,000 3.000% 3.137% November 3, 2020 2,250 2,250 2.000% 2.093% February 8, 2021 500 500 4.000% 4.082% August 8, 2021 2,750 2,750 1.550% 1.642% December 6, 2021 (a) 2,153 1,996 2.125% 2.233% February 6, 2022 1,750 1,750 2.400% 2.520% February 12, 2022 1,500 1,500 2.375% 2.466% November 3, 2022 1,000 1,000 2.650% 2.717% November 15, 2022 750 750 2.125% 2.239% May 1, 2023 1,000 1,000 2.375% 2.465% August 8, 2023 1,500 1,500 2.000% 2.101% December 15, 2023 1,500 1,500 3.625% 3.726% February 6, 2024 2,250 2,250 2.875% 3.041% February 12, 2025 2,250 2,250 2.700% 2.772% November 3, 2025 3,000 3,000 3.125% 3.176% August 8, 2026 4,000 4,000 2.400% 2.464% February 6, 2027 4,000 4,000 3.300% 3.383% December 6, 2028 (a) 2,153 1,996 3.125% 3.218% May 2, 2033 ( a ) 676 627 2.625% 2.690% February 12, 2035 1,500 1,500 3.500% 3.604% November 3, 2035 1,000 1,000 4.200% 4.260% August 8, 2036 2,250 2,250 3.450% 3.510% February 6, 2037 2,500 2,500 4.100% 4.152% June 1, 2039 750 750 5.200% 5.240% October 1, 2040 1,000 1,000 4.500% 4.567% February 8, 2041 1,000 1,000 5.300% 5.361% November 15, 2042 900 900 3.500% 3.571% May 1, 2043 500 500 3.750% 3.829% December 15, 2043 500 500 4.875% 4.918% February 12, 2045 1,750 1,750 3.750% 3.800% November 3, 2045 3,000 3,000 4.450% 4.492% August 8, 2046 4,500 4,500 3.700% 3.743% February 6, 2047 3,000 3,000 4.250% 4.287% February 12, 2055 2,250 2,250 4.000% 4.063% November 3, 2055 1,000 1,000 4.750% 4.782% August 8, 2056 2,250 2,250 3.950% 4.033% February 6, 2057 2,000 2,000 4.500% 4.528% Total $ 77,600 $ 77,837 ( a ) Euro-denominated debt securities. |
RESTRUCTURING CHARGES (Tables)
RESTRUCTURING CHARGES (Tables) | 9 Months Ended |
Mar. 31, 2018 | |
Restructuring And Related Activities [Abstract] | |
Changes in Restructuring Liability | Changes in the restructuring liability were as follows: (In millions) Severance Other (a) Total Nine Months Ended March 31, 2018 Balance, beginning of period $ 373 $ 59 $ 432 Restructuring charges 0 0 0 Cash paid (373 ) (24 ) (397 ) Other 0 (7 ) (7 ) Balance, end of period $ 0 $ 28 $ 28 (a) Primarily reflects activities associated with the consolidation of our phone facilities, manufacturing operations, and contract termination costs. |
UNEARNED REVENUE (Tables)
UNEARNED REVENUE (Tables) | 9 Months Ended |
Mar. 31, 2018 | |
Revenue Recognition And Deferred Revenue [Abstract] | |
Unearned Revenue by Segment | Unearned revenue by segment was as follows: (In millions) March 31, June 30, Productivity and Business Processes $ 11,185 $ 12,692 Intelligent Cloud 9,987 11,152 More Personal Computing 2,783 2,812 Total $ 23,955 $ 26,656 |
Changes in Unearned Revenue | Changes in unearned revenue were as follows: (In millions) Nine Months Ended March 31, 2018 Balance, beginning of period $ 26,656 Deferral of revenue 37,217 Recognition of unearned revenue (39,918 ) Balance, end of period $ 23,955 |
LEASES (Tables)
LEASES (Tables) | 9 Months Ended |
Mar. 31, 2018 | |
Leases [Abstract] | |
Components of Lease Expense | The components of lease expense were as follows: (In millions) Three Months Ended March 31, Nine Months Ended March 31, 2018 2017 2018 2017 Operating lease cost $ 395 $ 321 $ 1,182 $ 1,015 Finance lease cost: Amortization of right-of-use assets $ 70 $ 29 $ 175 $ 67 Interest on lease liabilities 47 19 121 46 Total finance lease cost $ 117 $ 48 $ 296 $ 113 |
Supplemental Cash Flow Information Related to Leases | Supplemental cash flow information related to leases was as follows: (In millions) Three Months Ended March 31, Nine Months Ended March 31, 2018 2017 2018 2017 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 388 $ 331 $ 1,132 $ 912 Operating cash flows from finance leases 46 19 121 46 Financing cash flows from finance leases 37 14 93 29 Right-of-use assets obtained in exchange for lease obligations: Operating leases 570 130 1,269 304 Finance leases 412 296 1,790 1,061 |
Supplemental Balance Sheet Information Related to Leases | Supplemental balance sheet information related to leases was as follows: (In millions, except lease term and discount rate) March 31, June 30, Operating Leases Operating lease right-of-use assets $ 6,859 $ 6,555 Other current liabilities $ 1,382 $ 1,423 Operating lease liabilities 5,751 5,372 Total operating lease liabilities $ 7,133 $ 6,795 Finance Leases Property and equipment, gross $ 4,507 $ 2,658 Accumulated depreciation (336 ) (161 ) Property and equipment, net $ 4,171 $ 2,497 Other current liabilities $ 181 $ 113 Other long-term liabilities 4,150 2,425 Total finance lease liabilities $ 4,331 $ 2,538 Weighted Average Remaining Lease Term Operating leases 7 years 7 years Finance leases 14 years 13 years Weighted Average Discount Rate Operating leases 2.6% 2.5% Finance leases 5.3% 4.7% |
Maturities of Lease Liabilities | Maturities of lease liabilities were as follows: (In millions) Year Ending June 30, Operating Leases Finance Leases 2018 (excluding the nine months ended March 31, 2018) $ 388 $ 104 2019 1,472 384 2020 1,340 391 2021 1,076 399 2022 887 406 Thereafter 2,790 4,442 Total lease payments 7,953 6,126 Less imputed interest (820 ) (1,795 ) Total $ 7,133 $ 4,331 |
STOCKHOLDERS' EQUITY (Tables)
STOCKHOLDERS' EQUITY (Tables) | 9 Months Ended |
Mar. 31, 2018 | |
Equity [Abstract] | |
Share Repurchases | We repurchased the following shares of common stock under the share repurchase programs: (In millions) Shares Amount Shares Amount Fiscal Year 2018 2017 First Quarter 22 $ 1,600 63 $ 3,550 Second Quarter 22 1,800 59 3,533 Third Quarter 34 3,100 25 1,600 Total 78 $ 6,500 147 $ 8,683 |
Dividends Declared | Our Board of Directors declared the following dividends: Declaration Date Dividend Per Share Record Date Amount Payment Date Fiscal Year 2018 (in millions) September 19, 2017 $ 0.42 November 16, 2017 $ 3,238 December 14, 2017 November 29, 2017 0.42 February 15, 2018 3,232 March 8, 2018 March 12, 2018 0.42 May 17, 2018 3,230 June 14, 2018 Fiscal Year 2017 September 20, 2016 $ 0.39 November 17, 2016 $ 3,024 December 8, 2016 November 30, 2016 0.39 February 16, 2017 3,012 March 9, 2017 March 14, 2017 0.39 May 18, 2017 3,009 June 8, 2017 |
ACCUMULATED OTHER COMPREHENSI42
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Tables) | 9 Months Ended |
Mar. 31, 2018 | |
Equity [Abstract] | |
Summary of Changes in Accumulated Other Comprehensive Income (Loss) by Component | The following table summarizes the changes in accumulated other comprehensive income (loss) by component: (In millions) Three Months Ended March 31, Nine Months Ended March 31, 2018 2017 2018 2017 Derivatives Balance, beginning of period $ 21 $ 595 $ 134 $ 352 Unrealized gains (losses), net of tax of $7 $8 15 (60 ) 30 424 Reclassification adjustments for gains included in revenue (8 ) (167 ) (138 ) (414 ) Tax expense included in provision for income taxes 0 2 2 8 Amounts reclassified from accumulated other comprehensive income (8 ) (165 ) (136 ) (406 ) Net change related to derivatives, net of tax of $7 , $6 7 (225 ) (106 ) 18 Balance, end of period $ 28 $ 370 $ 28 $ 370 Investments Balance, beginning of period $ 659 $ 2,030 $ 1,825 $ 2,941 Unrealized gains (losses), net of tax of $(186) $(347) (644 ) 571 (961 ) 367 Reclassification adjustments for gains included in other income (expense), net (517 ) (779 ) (1,823 ) (1,867 ) Tax expense included in provision for income taxes 145 273 602 654 Amounts reclassified from accumulated other comprehensive income (372 ) (506 ) (1,221 ) (1,213 ) Net change related to investments, net of tax of $(331) $(949) (1,016 ) 65 (2,182 ) (846 ) Balance, end of period $ (357 ) $ 2,095 $ (357 ) $ 2,095 Translation Adjustments and Other Balance, beginning of period $ (1,079 ) $ (1,973 ) $ (1,332 ) $ (1,499 ) Translation adjustments and other, net of tax of $ 0 , $0, $(1) , 255 349 508 (125 ) Balance, end of period $ (824 ) $ (1,624 ) $ (824 ) $ (1,624 ) Accumulated other comprehensive income (loss), end of period $ (1,153 ) $ 841 $ (1,153 ) $ 841 |
SEGMENT INFORMATION AND GEOGR43
SEGMENT INFORMATION AND GEOGRAPHIC DATA (Tables) | 9 Months Ended |
Mar. 31, 2018 | |
Segment Reporting [Abstract] | |
Segment Revenue | Segment revenue and operating income were as follows during the periods presented: (In millions) Three Months Ended March 31, Nine Months Ended March 31, 2018 2017 2018 2017 Revenue Productivity and Business Processes $ 9,006 $ 7,707 $ 26,197 $ 21,322 Intelligent Cloud 7,896 6,730 22,613 19,585 More Personal Computing 9,917 8,775 31,465 30,059 Total $ 26,819 $ 23,212 $ 80,275 $ 70,966 Operating Income Productivity and Business Processes $ 3,115 $ 2,540 $ 9,458 $ 8,498 Intelligent Cloud 2,654 2,148 7,623 6,216 More Personal Computing 2,523 2,035 7,598 6,629 Total $ 8,292 $ 6,723 $ 24,679 $ 21,343 |
Segment Operating Income (Loss) | Segment revenue and operating income were as follows during the periods presented: (In millions) Three Months Ended March 31, Nine Months Ended March 31, 2018 2017 2018 2017 Revenue Productivity and Business Processes $ 9,006 $ 7,707 $ 26,197 $ 21,322 Intelligent Cloud 7,896 6,730 22,613 19,585 More Personal Computing 9,917 8,775 31,465 30,059 Total $ 26,819 $ 23,212 $ 80,275 $ 70,966 Operating Income Productivity and Business Processes $ 3,115 $ 2,540 $ 9,458 $ 8,498 Intelligent Cloud 2,654 2,148 7,623 6,216 More Personal Computing 2,523 2,035 7,598 6,629 Total $ 8,292 $ 6,723 $ 24,679 $ 21,343 |
Revenue Classified by Major Geographic Areas | Revenue, classified by the major geographic areas in which our customers are located, was as follows: (In millions) Three Months Ended March 31, Nine Months Ended March 31, 2018 2017 2018 2017 United States (a) $ 13,457 $ 12,298 $ 41,094 $ 37,628 Other countries 13,362 10,914 39,181 33,338 Total $ 26,819 $ 23,212 $ 80,275 $ 70,966 (a) Includes billings to original equipment manufacturers and certain multinational organizations because of the nature of these businesses and the impracticability of determining the geographic source of the revenue. |
Revenue Classified by Significant Product and Service Offerings | Revenue from external customers, classified by significant product and service offerings, was as follows: (In millions) Three Months Ended March 31, Nine Months Ended March 31, 2018 2017 2018 2017 Office products and cloud services $ 7,088 $ 6,234 $ 20,739 $ 18,655 Server products and cloud services 6,343 5,297 18,139 15,319 Windows 4,612 4,253 14,094 13,701 Gaming 2,251 1,906 8,067 7,409 Search advertising 1,784 1,599 5,243 4,633 Enterprise Services 1,489 1,383 4,295 4,109 Devices 1,219 958 3,851 4,017 1,335 976 3,795 1,204 Other 698 606 2,052 1,919 Total $ 26,819 $ 23,212 $ 80,275 $ 70,966 Our commercial cloud revenue, which primarily comprises Office 365 commercial, Azure, Dynamics 365, and other cloud properties, was $6.0 billion and $16.3 billion for the three and nine months ended March 31, 2018, respectively, and $3.8 billion and $10.4 billion for the three and nine months ended March 31, 2017, respectively. These amounts are primarily included in Office products and cloud services and server products and cloud services in the table above. |
Accounting Policies - Additiona
Accounting Policies - Additional Information (Detail) - USD ($) $ in Billions | 9 Months Ended | ||
Mar. 31, 2018 | Jun. 30, 2017 | Jul. 01, 2016 | |
Accounting Policies [Abstract] | |||
Current and long-term accounts receivable, net of allowance for doubtful accounts | $ 22.3 | ||
Long-term accounts receivable, net of allowance for doubtful accounts | $ 1.6 | $ 1.7 | |
Description of payment terms in contract with customer | Payment terms and conditions vary by contract type, although terms generally include a requirement of payment within 30 to 60 days. |
Allowance for Doubtful Accounts
Allowance for Doubtful Accounts (Detail) - Allowance for doubtful accounts $ in Millions | 9 Months Ended |
Mar. 31, 2018USD ($) | |
Valuation and Qualifying Accounts Disclosure [Line Items] | |
Balance, beginning of period | $ 361 |
Charged to costs and other | 41 |
Write-offs | (74) |
Balance, end of period | 328 |
Accounts receivable, net of allowance for doubtful accounts | |
Valuation and Qualifying Accounts Disclosure [Line Items] | |
Balance, end of period | 311 |
Other Long-term Assets | |
Valuation and Qualifying Accounts Disclosure [Line Items] | |
Balance, end of period | $ 17 |
Impact of Tax Cuts and Jobs Act
Impact of Tax Cuts and Jobs Act on Previously Reported Balances of Prior Period Income Tax Liabilities (Detail) - USD ($) $ in Millions | Mar. 31, 2018 | Jun. 30, 2017 |
Prior Period Adjustments Restatement [Line Items] | ||
Long-term income taxes | $ 30,669 | $ 13,485 |
Other long-term liabilities | $ 5,223 | 3,549 |
As Previously Reported | ||
Prior Period Adjustments Restatement [Line Items] | ||
Long-term income taxes | 0 | |
Other long-term liabilities | $ 17,034 |
Impacts of Adoption of Standard
Impacts of Adoption of Standards Related to Revenue Recognition and Leases to Previously Reported Results - (Detail) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | ||||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | Jun. 30, 2017 | Jul. 01, 2016 | |
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | ||||||
Revenue | $ 26,819 | $ 23,212 | $ 80,275 | $ 70,966 | ||
Provision for income taxes | 1,217 | 1,608 | 18,096 | 4,523 | ||
Net income | $ 7,424 | $ 5,486 | $ 7,698 | $ 17,420 | ||
Diluted earnings per share | $ 0.95 | $ 0.70 | $ 0.99 | $ 2.22 | ||
Balance Sheets | ||||||
Accounts receivable, net of allowance for doubtful accounts | $ 17,208 | $ 17,208 | $ 22,431 | |||
Operating lease right-of-use assets | 6,859 | 6,859 | 6,555 | |||
Other current and long-term assets | 11,179 | |||||
Unearned revenue | 23,955 | 23,955 | 26,656 | $ 22,200 | ||
Deferred income taxes | 2,417 | 2,417 | 5,734 | |||
Operating lease liabilities | 5,751 | 5,751 | 5,372 | |||
Other current and long-term liabilities | 24,621 | |||||
Stockholders' equity | $ 79,239 | $ 83,491 | $ 79,239 | $ 83,491 | 87,711 | |
As Previously Reported | ||||||
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | ||||||
Revenue | 22,090 | 66,633 | ||||
Provision for income taxes | 1,115 | 2,913 | ||||
Net income | $ 4,801 | $ 14,691 | ||||
Diluted earnings per share | $ 0.61 | $ 1.87 | ||||
Balance Sheets | ||||||
Accounts receivable, net of allowance for doubtful accounts | 19,792 | |||||
Operating lease right-of-use assets | 0 | |||||
Other current and long-term assets | 11,147 | |||||
Unearned revenue | 44,479 | |||||
Deferred income taxes | 531 | |||||
Operating lease liabilities | 0 | |||||
Other current and long-term liabilities | 23,464 | |||||
Stockholders' equity | 72,394 | |||||
New Revenue Standard Adjustment | Restatement Adjustment | ||||||
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | ||||||
Revenue | $ 1,122 | $ 4,333 | ||||
Provision for income taxes | 493 | 1,610 | ||||
Net income | $ 685 | $ 2,729 | ||||
Diluted earnings per share | $ 0.09 | $ 0.35 | ||||
Balance Sheets | ||||||
Accounts receivable, net of allowance for doubtful accounts | 2,639 | |||||
Operating lease right-of-use assets | 0 | |||||
Other current and long-term assets | 32 | |||||
Unearned revenue | (17,823) | |||||
Deferred income taxes | 5,203 | |||||
Operating lease liabilities | 0 | |||||
Other current and long-term liabilities | (26) | |||||
Stockholders' equity | 15,317 | |||||
New Lease Standard Adjustment | Restatement Adjustment | ||||||
Balance Sheets | ||||||
Accounts receivable, net of allowance for doubtful accounts | 0 | |||||
Operating lease right-of-use assets | 6,555 | |||||
Other current and long-term assets | 0 | |||||
Unearned revenue | 0 | |||||
Deferred income taxes | 0 | |||||
Operating lease liabilities | 5,372 | |||||
Other current and long-term liabilities | 1,183 | |||||
Stockholders' equity | $ 0 |
Basic and Diluted Earnings Per
Basic and Diluted Earnings Per Share (Detail) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | |
Earnings Per Share Basic And Diluted [Abstract] | ||||
Net income available for common shareholders (A) | $ 7,424 | $ 5,486 | $ 7,698 | $ 17,420 |
Weighted average outstanding shares of common stock (B) | 7,698 | 7,725 | 7,706 | 7,756 |
Dilutive effect of stock-based awards | 96 | 88 | 92 | 84 |
Common stock and common stock equivalents (C) | 7,794 | 7,813 | 7,798 | 7,840 |
Earnings Per Share | ||||
Basic (A/B) | $ 0.96 | $ 0.71 | $ 1 | $ 2.25 |
Diluted (A/C) | $ 0.95 | $ 0.70 | $ 0.99 | $ 2.22 |
Components of Other Income (Exp
Components of Other Income (Expense), Net (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | |
Other Income And Expenses [Abstract] | ||||
Dividends and interest income | $ 575 | $ 380 | $ 1,578 | $ 984 |
Interest expense | (691) | (609) | (2,061) | (1,567) |
Net recognized gains on investments | 510 | 790 | 1,851 | 1,893 |
Net losses on derivatives | (72) | (200) | (206) | (340) |
Net gains (losses) on foreign currency remeasurements | 20 | 50 | (49) | (143) |
Other, net | 7 | (40) | 2 | (227) |
Total | $ 349 | $ 371 | $ 1,115 | $ 600 |
Net Recognized Gains (Losses) o
Net Recognized Gains (Losses) on Investments (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | |
Other Income And Expenses [Abstract] | ||||
Other-than-temporary impairments of investments | $ (17) | $ (15) | $ (47) | $ (54) |
Realized gains from sales of available-for-sale securities | 875 | 938 | 2,612 | 2,272 |
Realized losses from sales of available-for-sale securities | (348) | (133) | (714) | (325) |
Total | $ 510 | $ 790 | $ 1,851 | $ 1,893 |
Investment Components, Includin
Investment Components, Including Associated Derivatives (Detail) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Jun. 30, 2016 |
Cash, Cash Equivalents and Investments [Line Items] | ||||||
Cost Basis | $ 135,375 | $ 136,160 | ||||
Unrealized Gains | 1,024 | 3,267 | ||||
Unrealized Losses | (1,311) | (423) | ||||
Recorded Basis | 135,088 | 139,004 | ||||
Cash and cash equivalents | 9,221 | $ 12,859 | 7,663 | $ 6,713 | $ 8,468 | $ 6,510 |
Short-term Investments | 123,049 | 125,318 | ||||
Equity and Other Investments | 2,818 | 6,023 | ||||
Cash | ||||||
Cash, Cash Equivalents and Investments [Line Items] | ||||||
Cash | 4,104 | 3,624 | ||||
Unrealized Gains | 0 | 0 | ||||
Unrealized Losses | 0 | 0 | ||||
Cash and cash equivalents | 4,104 | 3,624 | ||||
Short-term Investments | 0 | 0 | ||||
Equity and Other Investments | 0 | 0 | ||||
Mutual funds | ||||||
Cash, Cash Equivalents and Investments [Line Items] | ||||||
Cost Basis | 683 | 1,478 | ||||
Unrealized Gains | 0 | 0 | ||||
Unrealized Losses | 0 | 0 | ||||
Recorded Basis | 683 | 1,478 | ||||
Cash and cash equivalents | 683 | 1,478 | ||||
Short-term Investments | 0 | 0 | ||||
Equity and Other Investments | 0 | 0 | ||||
Commercial paper | ||||||
Cash, Cash Equivalents and Investments [Line Items] | ||||||
Cost Basis | 3,774 | 319 | ||||
Unrealized Gains | 0 | 0 | ||||
Unrealized Losses | 0 | 0 | ||||
Recorded Basis | 3,774 | 319 | ||||
Cash and cash equivalents | 3,158 | 69 | ||||
Short-term Investments | 616 | 250 | ||||
Equity and Other Investments | 0 | 0 | ||||
Certificates of deposit | ||||||
Cash, Cash Equivalents and Investments [Line Items] | ||||||
Cost Basis | 2,022 | 1,358 | ||||
Unrealized Gains | 0 | 0 | ||||
Unrealized Losses | 0 | 0 | ||||
Recorded Basis | 2,022 | 1,358 | ||||
Cash and cash equivalents | 1,156 | 972 | ||||
Short-term Investments | 866 | 386 | ||||
Equity and Other Investments | 0 | 0 | ||||
U.S. government and agency securities | ||||||
Cash, Cash Equivalents and Investments [Line Items] | ||||||
Cost Basis | 108,056 | 112,119 | ||||
Unrealized Gains | 31 | 85 | ||||
Unrealized Losses | (1,239) | (360) | ||||
Recorded Basis | 106,848 | 111,844 | ||||
Cash and cash equivalents | 117 | 16 | ||||
Short-term Investments | 106,731 | 111,828 | ||||
Equity and Other Investments | 0 | 0 | ||||
Foreign government bonds | ||||||
Cash, Cash Equivalents and Investments [Line Items] | ||||||
Cost Basis | 4,671 | 5,276 | ||||
Unrealized Gains | 3 | 2 | ||||
Unrealized Losses | (12) | (13) | ||||
Recorded Basis | 4,662 | 5,265 | ||||
Cash and cash equivalents | 3 | 1,504 | ||||
Short-term Investments | 4,659 | 3,761 | ||||
Equity and Other Investments | 0 | 0 | ||||
Mortgage- and asset-backed securities | ||||||
Cash, Cash Equivalents and Investments [Line Items] | ||||||
Cost Basis | 3,750 | 3,921 | ||||
Unrealized Gains | 5 | 14 | ||||
Unrealized Losses | (12) | (4) | ||||
Recorded Basis | 3,743 | 3,931 | ||||
Cash and cash equivalents | 0 | 0 | ||||
Short-term Investments | 3,743 | 3,931 | ||||
Equity and Other Investments | 0 | 0 | ||||
Corporate notes and bonds | ||||||
Cash, Cash Equivalents and Investments [Line Items] | ||||||
Cost Basis | 6,139 | 4,786 | ||||
Unrealized Gains | 27 | 61 | ||||
Unrealized Losses | (43) | (12) | ||||
Recorded Basis | 6,123 | 4,835 | ||||
Cash and cash equivalents | 0 | 0 | ||||
Short-term Investments | 6,123 | 4,835 | ||||
Equity and Other Investments | 0 | 0 | ||||
Municipal securities | ||||||
Cash, Cash Equivalents and Investments [Line Items] | ||||||
Cost Basis | 269 | 284 | ||||
Unrealized Gains | 41 | 43 | ||||
Unrealized Losses | (1) | 0 | ||||
Recorded Basis | 309 | 327 | ||||
Cash and cash equivalents | 0 | 0 | ||||
Short-term Investments | 309 | 327 | ||||
Equity and Other Investments | 0 | 0 | ||||
Common and preferred stock | ||||||
Cash, Cash Equivalents and Investments [Line Items] | ||||||
Cost Basis | 1,324 | 2,472 | ||||
Unrealized Gains | 917 | 3,062 | ||||
Unrealized Losses | (4) | (34) | ||||
Recorded Basis | 2,237 | 5,500 | ||||
Cash and cash equivalents | 0 | 0 | ||||
Short-term Investments | 0 | 0 | ||||
Equity and Other Investments | 2,237 | 5,500 | ||||
Other investments | ||||||
Cash, Cash Equivalents and Investments [Line Items] | ||||||
Cost Basis | 583 | 523 | ||||
Unrealized Gains | 0 | 0 | ||||
Unrealized Losses | 0 | 0 | ||||
Recorded Basis | 583 | 523 | ||||
Cash and cash equivalents | 0 | 0 | ||||
Short-term Investments | 2 | 0 | ||||
Equity and Other Investments | $ 581 | $ 523 |
Investments - Cost Method - Add
Investments - Cost Method - Additional Information (Detail) - USD ($) $ in Millions | Mar. 31, 2018 | Jun. 30, 2017 |
Fair Value, Measurements, Nonrecurring | ||
Schedule of Cost-method Investments [Line Items] | ||
Recorded basis of common and preferred stock that are restricted for more than one year or are not publicly traded | $ 1,030 | $ 1,073 |
Investments - Secured Borrowing
Investments - Secured Borrowings and Loaned Securities - Additional Information (Detail) - USD ($) $ in Billions | Mar. 31, 2018 | Jun. 30, 2017 |
U.S. Government and Agency Securities | ||
Investment [Line Items] | ||
Collateral received | $ 3 | $ 3.7 |
Unrealized Losses on Investment
Unrealized Losses on Investments (Detail) - USD ($) $ in Millions | Mar. 31, 2018 | Jun. 30, 2017 |
Unrealized Losses on Investments [Line Items] | ||
Less than 12 Months - Fair Value | $ 101,301 | $ 93,370 |
Less than 12 Months - Unrealized Losses | (1,210) | (367) |
12 Months or Greater - Fair Value | 2,657 | 917 |
12 Months or Greater - Unrealized Losses | (101) | (56) |
Total Fair Value | 103,958 | 94,287 |
Total Unrealized Losses | (1,311) | (423) |
U.S. government and agency securities | ||
Unrealized Losses on Investments [Line Items] | ||
Less than 12 Months - Fair Value | 95,908 | 87,558 |
Less than 12 Months - Unrealized Losses | (1,169) | (348) |
12 Months or Greater - Fair Value | 2,031 | 371 |
12 Months or Greater - Unrealized Losses | (70) | (12) |
Total Fair Value | 97,939 | 87,929 |
Total Unrealized Losses | (1,239) | (360) |
Foreign government bonds | ||
Unrealized Losses on Investments [Line Items] | ||
Less than 12 Months - Fair Value | 1,261 | 4,006 |
Less than 12 Months - Unrealized Losses | (3) | (2) |
12 Months or Greater - Fair Value | 26 | 23 |
12 Months or Greater - Unrealized Losses | (9) | (11) |
Total Fair Value | 1,287 | 4,029 |
Total Unrealized Losses | (12) | (13) |
Mortgage- and asset-backed securities | ||
Unrealized Losses on Investments [Line Items] | ||
Less than 12 Months - Fair Value | 1,614 | 1,068 |
Less than 12 Months - Unrealized Losses | (7) | (3) |
12 Months or Greater - Fair Value | 147 | 198 |
12 Months or Greater - Unrealized Losses | (5) | (1) |
Total Fair Value | 1,761 | 1,266 |
Total Unrealized Losses | (12) | (4) |
Corporate notes and bonds | ||
Unrealized Losses on Investments [Line Items] | ||
Less than 12 Months - Fair Value | 2,463 | 669 |
Less than 12 Months - Unrealized Losses | (30) | (8) |
12 Months or Greater - Fair Value | 430 | 177 |
12 Months or Greater - Unrealized Losses | (13) | (4) |
Total Fair Value | 2,893 | 846 |
Total Unrealized Losses | (43) | (12) |
Municipal securities | ||
Unrealized Losses on Investments [Line Items] | ||
Less than 12 Months - Fair Value | 36 | |
Less than 12 Months - Unrealized Losses | (1) | |
12 Months or Greater - Fair Value | 0 | |
12 Months or Greater - Unrealized Losses | 0 | |
Total Fair Value | 36 | |
Total Unrealized Losses | (1) | |
Common and preferred stock | ||
Unrealized Losses on Investments [Line Items] | ||
Less than 12 Months - Fair Value | 19 | 69 |
Less than 12 Months - Unrealized Losses | 0 | (6) |
12 Months or Greater - Fair Value | 23 | 148 |
12 Months or Greater - Unrealized Losses | (4) | (28) |
Total Fair Value | 42 | 217 |
Total Unrealized Losses | $ (4) | $ (34) |
Debt Investment Maturities (Det
Debt Investment Maturities (Detail) $ in Millions | Mar. 31, 2018USD ($) |
Cost Basis | |
Due in one year or less | $ 16,698 |
Due after one year through five years | 94,607 |
Due after five years through 10 years | 16,427 |
Due after 10 years | 949 |
Total | 128,681 |
Estimated Fair Value | |
Due in one year or less | 16,670 |
Due after one year through five years | 93,722 |
Due after five years through 10 years | 16,133 |
Due after 10 years | 956 |
Total | $ 127,481 |
Derivatives - Additional Inform
Derivatives - Additional Information (Detail) - USD ($) | 9 Months Ended | |
Mar. 31, 2018 | Jun. 30, 2017 | |
Derivative [Line Items] | ||
Maximum length of time hedged in cash flow hedge | 3 years | |
Minimum required liquidity under certain counterparty agreements | $ 1,000,000,000 | |
Minimum liquidity for the period as defined by certain counterparty agreements | 1,000,000,000 | |
Estimated derivative net gains (losses) included in AOCI that will be reclassified into earnings within 12 months | $ 34,000,000 | |
Senior Unsecured Obligations | ||
Derivative [Line Items] | ||
Debt instrument credit rating | AAA | |
Derivatives Sold | Foreign Exchange Contracts | Non-designated Hedge Derivatives | ||
Derivative [Line Items] | ||
Notional amounts | $ 9,700,000,000 | $ 10,600,000,000 |
Derivatives Sold | Equity Contracts | ||
Derivative [Line Items] | ||
Notional amounts | 820,000,000 | 2,400,000,000 |
Derivatives Sold | Equity Contracts | Designated Hedge Derivatives | ||
Derivative [Line Items] | ||
Notional amounts | 815,000,000 | 1,800,000,000 |
Derivatives Sold | Interest Rate Contracts | Non-designated Hedge Derivatives | ||
Derivative [Line Items] | ||
Notional amounts | 424,000,000 | 352,000,000 |
Derivatives Sold | Credit Contracts | Non-designated Hedge Derivatives | ||
Derivative [Line Items] | ||
Notional amounts | 31,000,000 | 63,000,000 |
Derivatives Sold | Cash flow hedging | Foreign Exchange Contracts | ||
Derivative [Line Items] | ||
Notional amounts | 7,500,000,000 | 8,900,000,000 |
Derivatives Sold | Fair value hedging | Foreign Exchange Contracts | ||
Derivative [Line Items] | ||
Notional amounts | 4,500,000,000 | 5,100,000,000 |
Derivatives Purchased | Foreign Exchange Contracts | Non-designated Hedge Derivatives | ||
Derivative [Line Items] | ||
Notional amounts | 9,100,000,000 | 8,800,000,000 |
Derivatives Purchased | Equity Contracts | ||
Derivative [Line Items] | ||
Notional amounts | 801,000,000 | 1,900,000,000 |
Derivatives Purchased | Equity Contracts | Designated Hedge Derivatives | ||
Derivative [Line Items] | ||
Notional amounts | 731,000,000 | 1,600,000,000 |
Derivatives Purchased | Interest Rate Contracts | Non-designated Hedge Derivatives | ||
Derivative [Line Items] | ||
Notional amounts | 620,000,000 | 233,000,000 |
Derivatives Purchased | Mortgage-backed securities | Non-designated Hedge Derivatives | ||
Derivative [Line Items] | ||
Notional amounts | 563,000,000 | 567,000,000 |
Derivatives Purchased | Credit Contracts | Non-designated Hedge Derivatives | ||
Derivative [Line Items] | ||
Notional amounts | $ 238,000,000 | $ 267,000,000 |
Fair Values of Derivative Instr
Fair Values of Derivative Instruments (Detail) - USD ($) $ in Millions | Mar. 31, 2018 | Jun. 30, 2017 |
Short-term Investments | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Assets | $ 36 | $ 100 |
Net amount, assets | (3) | 80 |
Short-term Investments | Eligible for Offsetting | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Assets | 31 | 100 |
Gross amounts of derivatives offset on the balance sheet, assets | (34) | (20) |
Net amounts presented on the balance sheet, assets | (3) | 80 |
Gross amounts of derivatives not offset on the balance sheet, assets | 0 | 0 |
Cash collateral received, assets | 0 | 0 |
Short-term Investments | Non-designated Hedge Derivatives | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Assets | 26 | 20 |
Short-term Investments | Non-designated Hedge Derivatives | Foreign Exchange Contracts | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Assets | 3 | 9 |
Short-term Investments | Non-designated Hedge Derivatives | Equity Contracts | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Assets | 4 | 3 |
Short-term Investments | Non-designated Hedge Derivatives | Interest Rate Contracts | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Assets | 15 | 3 |
Short-term Investments | Non-designated Hedge Derivatives | Credit Contracts | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Assets | 4 | 5 |
Short-term Investments | Designated Hedge Derivatives | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Assets | 10 | 80 |
Short-term Investments | Designated Hedge Derivatives | Foreign Exchange Contracts | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Assets | 10 | 80 |
Short-term Investments | Designated Hedge Derivatives | Equity Contracts | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Assets | 0 | 0 |
Other Current Assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Assets | 138 | 336 |
Net amount, assets | 36 | 204 |
Other Current Assets | Eligible for Offsetting | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Assets | 138 | 336 |
Gross amounts of derivatives offset on the balance sheet, assets | (102) | (132) |
Net amounts presented on the balance sheet, assets | 36 | 204 |
Gross amounts of derivatives not offset on the balance sheet, assets | 0 | 0 |
Cash collateral received, assets | 0 | 0 |
Other Current Assets | Non-designated Hedge Derivatives | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Assets | 67 | 203 |
Other Current Assets | Non-designated Hedge Derivatives | Foreign Exchange Contracts | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Assets | 67 | 203 |
Other Current Assets | Non-designated Hedge Derivatives | Equity Contracts | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Assets | 0 | 0 |
Other Current Assets | Non-designated Hedge Derivatives | Interest Rate Contracts | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Assets | 0 | 0 |
Other Current Assets | Non-designated Hedge Derivatives | Credit Contracts | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Assets | 0 | 0 |
Other Current Assets | Designated Hedge Derivatives | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Assets | 71 | 133 |
Other Current Assets | Designated Hedge Derivatives | Foreign Exchange Contracts | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Assets | 71 | 133 |
Other Current Assets | Designated Hedge Derivatives | Equity Contracts | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Assets | 0 | 0 |
Equity and Other Investments | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Assets | 12 | 67 |
Net amount, assets | 0 | 0 |
Equity and Other Investments | Eligible for Offsetting | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Assets | 12 | 67 |
Gross amounts of derivatives offset on the balance sheet, assets | (12) | (67) |
Net amounts presented on the balance sheet, assets | 0 | 0 |
Gross amounts of derivatives not offset on the balance sheet, assets | 0 | 0 |
Cash collateral received, assets | 0 | 0 |
Equity and Other Investments | Non-designated Hedge Derivatives | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Assets | 0 | 0 |
Equity and Other Investments | Non-designated Hedge Derivatives | Foreign Exchange Contracts | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Assets | 0 | 0 |
Equity and Other Investments | Non-designated Hedge Derivatives | Equity Contracts | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Assets | 0 | 0 |
Equity and Other Investments | Non-designated Hedge Derivatives | Interest Rate Contracts | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Assets | 0 | 0 |
Equity and Other Investments | Non-designated Hedge Derivatives | Credit Contracts | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Assets | 0 | 0 |
Equity and Other Investments | Designated Hedge Derivatives | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Assets | 12 | 67 |
Equity and Other Investments | Designated Hedge Derivatives | Foreign Exchange Contracts | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Assets | 0 | 0 |
Equity and Other Investments | Designated Hedge Derivatives | Equity Contracts | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Assets | 12 | 67 |
Other Long-term Assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Assets | 65 | 6 |
Net amount, assets | 56 | (2) |
Other Long-term Assets | Eligible for Offsetting | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Assets | 65 | 6 |
Gross amounts of derivatives offset on the balance sheet, assets | (9) | (8) |
Net amounts presented on the balance sheet, assets | 56 | (2) |
Gross amounts of derivatives not offset on the balance sheet, assets | 0 | 0 |
Cash collateral received, assets | 0 | 0 |
Other Long-term Assets | Non-designated Hedge Derivatives | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Assets | 59 | 6 |
Other Long-term Assets | Non-designated Hedge Derivatives | Foreign Exchange Contracts | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Assets | 59 | 6 |
Other Long-term Assets | Non-designated Hedge Derivatives | Equity Contracts | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Assets | 0 | 0 |
Other Long-term Assets | Non-designated Hedge Derivatives | Interest Rate Contracts | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Assets | 0 | 0 |
Other Long-term Assets | Non-designated Hedge Derivatives | Credit Contracts | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Assets | 0 | 0 |
Other Long-term Assets | Designated Hedge Derivatives | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Assets | 6 | 0 |
Other Long-term Assets | Designated Hedge Derivatives | Foreign Exchange Contracts | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Assets | 6 | 0 |
Other Long-term Assets | Designated Hedge Derivatives | Equity Contracts | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Assets | 0 | 0 |
Other Current Liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Liabilities | (313) | (337) |
Net amount, liabilities | (224) | (341) |
Other Current Liabilities | Eligible for Offsetting | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Liabilities | (313) | (334) |
Gross amounts of derivatives offset on the balance sheet, liabilities | 150 | 221 |
Net amounts presented on the balance sheet, liabilities | (163) | (113) |
Gross amounts of derivatives not offset on the balance sheet, liabilities | 0 | 0 |
Cash collateral received, liabilities | (61) | (228) |
Other Current Liabilities | Non-designated Hedge Derivatives | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Liabilities | (148) | (148) |
Other Current Liabilities | Non-designated Hedge Derivatives | Foreign Exchange Contracts | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Liabilities | (142) | (134) |
Other Current Liabilities | Non-designated Hedge Derivatives | Equity Contracts | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Liabilities | (4) | (6) |
Other Current Liabilities | Non-designated Hedge Derivatives | Interest Rate Contracts | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Liabilities | (2) | (7) |
Other Current Liabilities | Non-designated Hedge Derivatives | Credit Contracts | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Liabilities | 0 | (1) |
Other Current Liabilities | Designated Hedge Derivatives | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Liabilities | (165) | (189) |
Other Current Liabilities | Designated Hedge Derivatives | Foreign Exchange Contracts | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Liabilities | (70) | (3) |
Other Current Liabilities | Designated Hedge Derivatives | Equity Contracts | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Liabilities | (95) | (186) |
Other Long-term Liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Liabilities | (15) | (8) |
Net amount, liabilities | (6) | (1) |
Other Long-term Liabilities | Eligible for Offsetting | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Liabilities | (15) | (8) |
Gross amounts of derivatives offset on the balance sheet, liabilities | 9 | 7 |
Net amounts presented on the balance sheet, liabilities | (6) | (1) |
Gross amounts of derivatives not offset on the balance sheet, liabilities | 0 | 0 |
Cash collateral received, liabilities | 0 | 0 |
Other Long-term Liabilities | Non-designated Hedge Derivatives | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Liabilities | (9) | (8) |
Other Long-term Liabilities | Non-designated Hedge Derivatives | Foreign Exchange Contracts | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Liabilities | (9) | (8) |
Other Long-term Liabilities | Non-designated Hedge Derivatives | Equity Contracts | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Liabilities | 0 | 0 |
Other Long-term Liabilities | Non-designated Hedge Derivatives | Interest Rate Contracts | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Liabilities | 0 | 0 |
Other Long-term Liabilities | Non-designated Hedge Derivatives | Credit Contracts | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Liabilities | 0 | 0 |
Other Long-term Liabilities | Designated Hedge Derivatives | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Liabilities | (6) | 0 |
Other Long-term Liabilities | Designated Hedge Derivatives | Foreign Exchange Contracts | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Liabilities | (6) | 0 |
Other Long-term Liabilities | Designated Hedge Derivatives | Equity Contracts | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Liabilities | $ 0 | $ 0 |
Gains (Losses) on Fair Value He
Gains (Losses) on Fair Value Hedges and Related Hedged Items (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | |
Foreign Exchange Contracts | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Derivatives | $ (260) | $ (248) | $ (224) | $ 389 |
Hedged items | 288 | 257 | 298 | (349) |
Total amount of ineffectiveness | 28 | 9 | 74 | 40 |
Equity Contracts | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Derivatives | 126 | (19) | (181) | (36) |
Hedged items | (126) | 19 | 181 | 36 |
Total amount of ineffectiveness | 0 | 0 | 0 | 0 |
Amount of equity contracts excluded from effectiveness assessment | $ 0 | $ (25) | $ 60 | $ (29) |
Gains (Losses) Related to Cash
Gains (Losses) Related to Cash Flow Hedges (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | |
Effective Portion | ||||
Gains (losses) recognized in other comprehensive income (loss) (net of tax of $7, $3, $8, and $7) | $ 14 | $ (60) | $ 29 | $ 424 |
Designated Hedge Derivatives | Foreign Exchange Contracts | ||||
Effective Portion | ||||
Gains reclassified from accumulated other comprehensive income (loss) into revenue | 8 | 167 | 138 | 414 |
Amount Excluded from Effectiveness Assessment and Ineffective Portion | ||||
Losses recognized in other income (expense), net | $ (62) | $ (121) | $ (226) | $ (275) |
Gains (Losses) Related to Cas60
Gains (Losses) Related to Cash Flow Hedges (Parenthetical) (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | |
Designated Hedge Derivatives | Foreign Exchange Contracts | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gains (losses) recognized in other comprehensive income (loss), tax | $ 7 | $ 3 | $ 8 | $ 7 |
Non-designated Derivative Gains
Non-designated Derivative Gains (Losses) (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Changes in fair value of derivatives not designated as hedges | $ (93) | $ (166) | $ (346) | $ (215) |
Foreign Exchange Contracts | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Changes in fair value of derivatives not designated as hedges | (64) | (115) | (248) | (120) |
Equity Contracts | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Changes in fair value of derivatives not designated as hedges | (11) | (42) | (89) | (84) |
Interest Rate Contracts | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Changes in fair value of derivatives not designated as hedges | (18) | 8 | (9) | 2 |
Credit Contracts | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Changes in fair value of derivatives not designated as hedges | 0 | 1 | 0 | 5 |
Other Contracts | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Changes in fair value of derivatives not designated as hedges | $ 0 | $ (18) | $ 0 | $ (18) |
Financial Assets and Liabilitie
Financial Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) - USD ($) $ in Millions | Mar. 31, 2018 | Jun. 30, 2017 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets | $ 129,466 | $ 133,985 | |
Gross | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets | 129,623 | 134,212 | |
Gross | Derivatives and other | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Liabilities | 328 | 384 | |
Gross | Level 1 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets | 108,219 | 113,121 | |
Gross | Level 1 | Derivatives and other | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Liabilities | 1 | 0 | |
Gross | Level 2 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets | 21,378 | 21,072 | |
Gross | Level 2 | Derivatives and other | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Liabilities | 327 | 345 | |
Gross | Level 3 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets | 26 | 19 | |
Gross | Level 3 | Derivatives and other | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Liabilities | 0 | 39 | |
Gross | Mutual funds | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets | 683 | 1,478 | |
Gross | Mutual funds | Level 1 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets | 683 | 1,478 | |
Gross | Mutual funds | Level 2 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets | 0 | 0 | |
Gross | Mutual funds | Level 3 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets | 0 | 0 | |
Gross | Commercial paper | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets | 3,774 | 319 | |
Gross | Commercial paper | Level 1 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets | 0 | 0 | |
Gross | Commercial paper | Level 2 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets | 3,774 | 319 | |
Gross | Commercial paper | Level 3 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets | 0 | 0 | |
Gross | Certificates of deposit | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets | 2,022 | 1,358 | |
Gross | Certificates of deposit | Level 1 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets | 0 | 0 | |
Gross | Certificates of deposit | Level 2 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets | 2,022 | 1,358 | |
Gross | Certificates of deposit | Level 3 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets | 0 | 0 | |
Gross | U.S. government and agency securities | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets | 106,847 | 111,844 | |
Gross | U.S. government and agency securities | Level 1 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets | 106,324 | 109,228 | |
Gross | U.S. government and agency securities | Level 2 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets | 523 | 2,616 | |
Gross | U.S. government and agency securities | Level 3 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets | 0 | 0 | |
Gross | Foreign government bonds | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets | 4,719 | 5,187 | |
Gross | Foreign government bonds | Level 1 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets | 20 | 0 | |
Gross | Foreign government bonds | Level 2 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets | 4,699 | 5,187 | |
Gross | Foreign government bonds | Level 3 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets | 0 | 0 | |
Gross | Mortgage- and asset-backed securities | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets | 3,738 | 3,934 | |
Gross | Mortgage- and asset-backed securities | Level 1 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets | 0 | 0 | |
Gross | Mortgage- and asset-backed securities | Level 2 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets | 3,738 | 3,934 | |
Gross | Mortgage- and asset-backed securities | Level 3 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets | 0 | 0 | |
Gross | Corporate notes and bonds | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets | 6,074 | 4,830 | |
Gross | Corporate notes and bonds | Level 1 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets | 0 | 0 | |
Gross | Corporate notes and bonds | Level 2 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets | 6,067 | 4,829 | |
Gross | Corporate notes and bonds | Level 3 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets | 7 | 1 | |
Gross | Municipal securities | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets | 309 | 327 | |
Gross | Municipal securities | Level 1 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets | 0 | 0 | |
Gross | Municipal securities | Level 2 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets | 309 | 327 | |
Gross | Municipal securities | Level 3 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets | 0 | 0 | |
Gross | Common and preferred stock | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets | 1,206 | 4,426 | |
Gross | Common and preferred stock | Level 1 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets | 1,188 | 2,414 | |
Gross | Common and preferred stock | Level 2 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets | 0 | 1,994 | |
Gross | Common and preferred stock | Level 3 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets | 18 | 18 | |
Gross | Derivatives | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets | 251 | 509 | |
Gross | Derivatives | Level 1 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets | 4 | 1 | |
Gross | Derivatives | Level 2 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets | 246 | 508 | |
Gross | Derivatives | Level 3 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets | 1 | 0 | |
Netting | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets | [1] | (157) | (227) |
Netting | Derivatives and other | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Liabilities | [1] | (159) | (228) |
Netting | Mutual funds | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets | [1] | 0 | 0 |
Netting | Commercial paper | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets | [1] | 0 | 0 |
Netting | Certificates of deposit | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets | [1] | 0 | 0 |
Netting | U.S. government and agency securities | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets | [1] | 0 | 0 |
Netting | Foreign government bonds | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets | [1] | 0 | 0 |
Netting | Mortgage- and asset-backed securities | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets | [1] | 0 | 0 |
Netting | Corporate notes and bonds | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets | [1] | 0 | 0 |
Netting | Municipal securities | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets | [1] | 0 | 0 |
Netting | Common and preferred stock | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets | [1] | 0 | 0 |
Netting | Derivatives | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets | [1] | (157) | (227) |
Net | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets | 129,466 | 133,985 | |
Net | Derivatives and other | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Liabilities | 169 | 156 | |
Net | Mutual funds | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets | 683 | 1,478 | |
Net | Commercial paper | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets | 3,774 | 319 | |
Net | Certificates of deposit | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets | 2,022 | 1,358 | |
Net | U.S. government and agency securities | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets | 106,847 | 111,844 | |
Net | Foreign government bonds | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets | 4,719 | 5,187 | |
Net | Mortgage- and asset-backed securities | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets | 3,738 | 3,934 | |
Net | Corporate notes and bonds | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets | 6,074 | 4,830 | |
Net | Municipal securities | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets | 309 | 327 | |
Net | Common and preferred stock | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets | 1,206 | 4,426 | |
Net | Derivatives | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets | $ 94 | $ 282 | |
[1] | These amounts represent the impact of netting derivative assets and derivative liabilities when a legally enforceable master netting agreement exists and fair value adjustments related to our own credit risk and counterparty credit risk. |
Reconciliation of Total Assets
Reconciliation of Total Assets Measured at Fair Value on Recurring Basis to Balance Sheet Presentation (Detail) - USD ($) $ in Millions | Mar. 31, 2018 | Jun. 30, 2017 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Net fair value of assets measured at fair value on a recurring basis | $ 129,466 | $ 133,985 |
Other liabilities | (1) | |
Other assets | 1 | |
Recorded basis of investment components | 135,088 | 139,004 |
Other Current and Long-term Assets | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Less derivative net assets classified as other current and long-term assets | (92) | (202) |
Fair Value, Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash | 4,104 | 3,624 |
Fair Value, Measurements, Nonrecurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Common and preferred stock measured at fair value on a nonrecurring basis | 1,030 | 1,073 |
Other investments measured at fair value on a nonrecurring basis | $ 581 | $ 523 |
Components of Inventories (Deta
Components of Inventories (Detail) - USD ($) $ in Millions | Mar. 31, 2018 | Jun. 30, 2017 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 627 | $ 797 |
Work in process | 67 | 145 |
Finished goods | 1,390 | 1,239 |
Total | $ 2,084 | $ 2,181 |
Business Combinations - Additio
Business Combinations - Additional Information (Detail) - LinkedIn Corporation - USD ($) $ in Billions | Dec. 08, 2016 | Mar. 31, 2018 |
Business Acquisition [Line Items] | ||
Acquisition date | Dec. 8, 2016 | |
Name of acquired entity | ||
Total purchase price | $ 27 | |
Cash paid to acquire the business | $ 26.9 |
Carrying Amount of Goodwill (De
Carrying Amount of Goodwill (Detail) $ in Millions | 9 Months Ended |
Mar. 31, 2018USD ($) | |
Goodwill [Line Items] | |
Beginning Balance | $ 35,122 |
Acquisitions | 275 |
Other | 185 |
Ending Balance | 35,582 |
Productivity and Business Processes | |
Goodwill [Line Items] | |
Beginning Balance | 23,739 |
Acquisitions | 0 |
Other | 85 |
Ending Balance | 23,824 |
Intelligent Cloud | |
Goodwill [Line Items] | |
Beginning Balance | 5,555 |
Acquisitions | 164 |
Other | 4 |
Ending Balance | 5,723 |
More Personal Computing | |
Goodwill [Line Items] | |
Beginning Balance | 5,828 |
Acquisitions | 111 |
Other | 96 |
Ending Balance | $ 6,035 |
Finite-Lived Intangible Assets
Finite-Lived Intangible Assets (Detail) - USD ($) $ in Millions | Mar. 31, 2018 | Jun. 30, 2017 | |
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | $ 15,916 | $ 16,667 | |
Accumulated Amortization | (7,372) | (6,561) | |
Net Carrying Amount | 8,544 | 10,106 | |
Technology-based | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | [1] | 7,183 | 7,765 |
Accumulated Amortization | [1] | (4,690) | (4,318) |
Net Carrying Amount | [1] | 2,493 | 3,447 |
Customer-related | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | 4,035 | 4,045 | |
Accumulated Amortization | (1,073) | (692) | |
Net Carrying Amount | 2,962 | 3,353 | |
Marketing-related | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | 4,031 | 4,016 | |
Accumulated Amortization | (1,025) | (829) | |
Net Carrying Amount | 3,006 | 3,187 | |
Contract-based | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | 667 | 841 | |
Accumulated Amortization | (584) | (722) | |
Net Carrying Amount | $ 83 | $ 119 | |
[1] | Technology-based intangible assets included $19 million and $59 million of net carrying amount of software to be sold, leased, or otherwise marketed as of March 31, 2018 and June 30, 2017, respectively. |
Finite-Lived Intangible Asset68
Finite-Lived Intangible Assets (Parenthetical) (Detail) - USD ($) $ in Millions | Mar. 31, 2018 | Jun. 30, 2017 |
Technology-based | ||
Finite-Lived Intangible Assets [Line Items] | ||
Net carrying amount of software to be sold, leased, or otherwise marketed | $ 19 | $ 59 |
Intangible Assets - Additional
Intangible Assets - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | |
Goodwill And Intangible Assets Disclosure [Abstract] | ||||
Intangible assets amortization expense | $ 560 | $ 560 | $ 1,700 | $ 1,100 |
Estimated Future Amortization E
Estimated Future Amortization Expense Related to Intangible Assets (Detail) - USD ($) $ in Millions | Mar. 31, 2018 | Jun. 30, 2017 |
Goodwill And Intangible Assets Disclosure [Abstract] | ||
Year Ending June 30, 2018 (excluding the nine months ended March 31, 2018) | $ 562 | |
Year Ending June 30, 2019 | 1,717 | |
Year Ending June 30, 2020 | 1,210 | |
Year Ending June 30, 2021 | 1,020 | |
Year Ending June 30, 2022 | 941 | |
Thereafter | 3,094 | |
Net Carrying Amount | $ 8,544 | $ 10,106 |
Debt - Additional Information (
Debt - Additional Information (Detail) - USD ($) | 1 Months Ended | 9 Months Ended | 12 Months Ended |
Oct. 31, 2017 | Mar. 31, 2018 | Jun. 30, 2017 | |
Debt Instrument [Line Items] | |||
Commercial paper | $ 231,000,000 | $ 9,100,000,000 | |
Credit facility, financial covenant | As of March 31, 2018, we were in compliance with the only financial covenant in both credit agreements, which requires us to maintain a coverage ratio of at least three times earnings before interest, taxes, depreciation, and amortization to interest expense, as defined in the credit agreements. | ||
Credit facility, drawn | $ 0 | 0 | |
Long-term debt | 76,900,000,000 | 77,100,000,000 | |
Long-term debt fair value | 78,900,000,000 | 80,300,000,000 | |
Debt issuance costs and unamortized discount | $ 673,000,000 | $ 715,000,000 | |
Credit Facility Expire on October 30th 2018 | |||
Debt Instrument [Line Items] | |||
Credit facility | $ 5,000,000,000 | ||
Credit facility, expiration date | Oct. 30, 2018 | ||
Credit Facility Expire on October 31st 2022 | |||
Debt Instrument [Line Items] | |||
Credit facility | $ 5,000,000,000 | ||
Credit facility, expiration date | Oct. 31, 2022 | ||
Commercial paper | |||
Debt Instrument [Line Items] | |||
Commercial paper, weighted average interest rate | 1.43% | 1.01% | |
Commercial paper | Lower Limit | |||
Debt Instrument [Line Items] | |||
Commercial paper, maturity term | 139 days | 25 days | |
Commercial paper | Upper Limit | |||
Debt Instrument [Line Items] | |||
Commercial paper, maturity term | 196 days | 264 days |
Long-term Debt (Detail)
Long-term Debt (Detail) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended | |
Mar. 31, 2018 | Jun. 30, 2017 | ||
Debt Instrument [Line Items] | |||
Face Value | $ 77,600 | $ 77,837 | |
Notes 0.875 Percent Due November 15th 2017 | |||
Debt Instrument [Line Items] | |||
Debt maturity date | Nov. 15, 2017 | Nov. 15, 2017 | |
Face Value | $ 0 | $ 600 | |
Stated Interest Rate | 0.875% | 0.875% | |
Effective Interest Rate | 1.084% | 1.084% | |
Notes 1.0 Percent Due May 1st 2018 | |||
Debt Instrument [Line Items] | |||
Debt maturity date | May 1, 2018 | May 1, 2018 | |
Face Value | $ 450 | $ 450 | |
Stated Interest Rate | 1.00% | 1.00% | |
Effective Interest Rate | 1.106% | 1.106% | |
Notes 1.30 Percent Due November 3rd 2018 | |||
Debt Instrument [Line Items] | |||
Debt maturity date | Nov. 3, 2018 | Nov. 3, 2018 | |
Face Value | $ 1,750 | $ 1,750 | |
Stated Interest Rate | 1.30% | 1.30% | |
Effective Interest Rate | 1.396% | 1.396% | |
Notes 1.625 Percent Due December 6th 2018 | |||
Debt Instrument [Line Items] | |||
Debt maturity date | Dec. 6, 2018 | Dec. 6, 2018 | |
Face Value | $ 1,250 | $ 1,250 | |
Stated Interest Rate | 1.625% | 1.625% | |
Effective Interest Rate | 1.824% | 1.824% | |
Notes 4.2 Percent Due June 1st 2019 | |||
Debt Instrument [Line Items] | |||
Debt maturity date | Jun. 1, 2019 | Jun. 1, 2019 | |
Face Value | $ 1,000 | $ 1,000 | |
Stated Interest Rate | 4.20% | 4.20% | |
Effective Interest Rate | 4.379% | 4.379% | |
Notes 1.1 Percent Due August 8th 2019 | |||
Debt Instrument [Line Items] | |||
Debt maturity date | Aug. 8, 2019 | Aug. 8, 2019 | |
Face Value | $ 2,500 | $ 2,500 | |
Stated Interest Rate | 1.10% | 1.10% | |
Effective Interest Rate | 1.203% | 1.203% | |
Notes 0.500 Percent Due November 1st 2019 | |||
Debt Instrument [Line Items] | |||
Debt maturity date | Nov. 1, 2019 | Nov. 1, 2019 | |
Face Value | $ 18 | $ 18 | |
Stated Interest Rate | 0.50% | 0.50% | |
Effective Interest Rate | 0.50% | 0.50% | |
Notes 1.850 Percent Due February 6th 2020 | |||
Debt Instrument [Line Items] | |||
Debt maturity date | Feb. 6, 2020 | Feb. 6, 2020 | |
Face Value | $ 1,500 | $ 1,500 | |
Stated Interest Rate | 1.85% | 1.85% | |
Effective Interest Rate | 1.952% | 1.952% | |
Notes 1.850 Percent Due February 12th 2020 | |||
Debt Instrument [Line Items] | |||
Debt maturity date | Feb. 12, 2020 | Feb. 12, 2020 | |
Face Value | $ 1,500 | $ 1,500 | |
Stated Interest Rate | 1.85% | 1.85% | |
Effective Interest Rate | 1.935% | 1.935% | |
Notes 3.0 Percent Due October 1st 2020 | |||
Debt Instrument [Line Items] | |||
Debt maturity date | Oct. 1, 2020 | Oct. 1, 2020 | |
Face Value | $ 1,000 | $ 1,000 | |
Stated Interest Rate | 3.00% | 3.00% | |
Effective Interest Rate | 3.137% | 3.137% | |
Notes 2.0 Percent Due November 3rd 2020 | |||
Debt Instrument [Line Items] | |||
Debt maturity date | Nov. 3, 2020 | Nov. 3, 2020 | |
Face Value | $ 2,250 | $ 2,250 | |
Stated Interest Rate | 2.00% | 2.00% | |
Effective Interest Rate | 2.093% | 2.093% | |
Notes 4.0 Percent Due February 8th 2021 | |||
Debt Instrument [Line Items] | |||
Debt maturity date | Feb. 8, 2021 | Feb. 8, 2021 | |
Face Value | $ 500 | $ 500 | |
Stated Interest Rate | 4.00% | 4.00% | |
Effective Interest Rate | 4.082% | 4.082% | |
Notes 1.55 Percent Due August 8th 2021 | |||
Debt Instrument [Line Items] | |||
Debt maturity date | Aug. 8, 2021 | Aug. 8, 2021 | |
Face Value | $ 2,750 | $ 2,750 | |
Stated Interest Rate | 1.55% | 1.55% | |
Effective Interest Rate | 1.642% | 1.642% | |
Notes 2.125 Percent Due December 6th 2021 | |||
Debt Instrument [Line Items] | |||
Debt maturity date | [1] | Dec. 6, 2021 | Dec. 6, 2021 |
Face Value | [1] | $ 2,153 | $ 1,996 |
Stated Interest Rate | [1] | 2.125% | 2.125% |
Effective Interest Rate | [1] | 2.233% | 2.233% |
Notes 2.40 Percent Due February 6th 2022 | |||
Debt Instrument [Line Items] | |||
Debt maturity date | Feb. 6, 2022 | Feb. 6, 2022 | |
Face Value | $ 1,750 | $ 1,750 | |
Stated Interest Rate | 2.40% | 2.40% | |
Effective Interest Rate | 2.52% | 2.52% | |
Notes 2.375 Percent Due February 12th 2022 | |||
Debt Instrument [Line Items] | |||
Debt maturity date | Feb. 12, 2022 | Feb. 12, 2022 | |
Face Value | $ 1,500 | $ 1,500 | |
Stated Interest Rate | 2.375% | 2.375% | |
Effective Interest Rate | 2.466% | 2.466% | |
Notes 2.65 Percent Due November 3rd 2022 | |||
Debt Instrument [Line Items] | |||
Debt maturity date | Nov. 3, 2022 | Nov. 3, 2022 | |
Face Value | $ 1,000 | $ 1,000 | |
Stated Interest Rate | 2.65% | 2.65% | |
Effective Interest Rate | 2.717% | 2.717% | |
Notes 2.125 Percent Due November 15th 2022 | |||
Debt Instrument [Line Items] | |||
Debt maturity date | Nov. 15, 2022 | Nov. 15, 2022 | |
Face Value | $ 750 | $ 750 | |
Stated Interest Rate | 2.125% | 2.125% | |
Effective Interest Rate | 2.239% | 2.239% | |
Notes 2.375 Percent Due May 1st 2023 | |||
Debt Instrument [Line Items] | |||
Debt maturity date | May 1, 2023 | May 1, 2023 | |
Face Value | $ 1,000 | $ 1,000 | |
Stated Interest Rate | 2.375% | 2.375% | |
Effective Interest Rate | 2.465% | 2.465% | |
Notes 2.0 Percent Due August 8th 2023 | |||
Debt Instrument [Line Items] | |||
Debt maturity date | Aug. 8, 2023 | Aug. 8, 2023 | |
Face Value | $ 1,500 | $ 1,500 | |
Stated Interest Rate | 2.00% | 2.00% | |
Effective Interest Rate | 2.101% | 2.101% | |
Notes 3.625 Percent Due December 15th 2023 | |||
Debt Instrument [Line Items] | |||
Debt maturity date | Dec. 15, 2023 | Dec. 15, 2023 | |
Face Value | $ 1,500 | $ 1,500 | |
Stated Interest Rate | 3.625% | 3.625% | |
Effective Interest Rate | 3.726% | 3.726% | |
Notes 2.875 Percent Due February 6th 2024 | |||
Debt Instrument [Line Items] | |||
Debt maturity date | Feb. 6, 2024 | Feb. 6, 2024 | |
Face Value | $ 2,250 | $ 2,250 | |
Stated Interest Rate | 2.875% | 2.875% | |
Effective Interest Rate | 3.041% | 3.041% | |
Notes 2.70 Percent Due February 12th 2025 | |||
Debt Instrument [Line Items] | |||
Debt maturity date | Feb. 12, 2025 | Feb. 12, 2025 | |
Face Value | $ 2,250 | $ 2,250 | |
Stated Interest Rate | 2.70% | 2.70% | |
Effective Interest Rate | 2.772% | 2.772% | |
Notes 3.125 Percent Due November 3rd 2025 | |||
Debt Instrument [Line Items] | |||
Debt maturity date | Nov. 3, 2025 | Nov. 3, 2025 | |
Face Value | $ 3,000 | $ 3,000 | |
Stated Interest Rate | 3.125% | 3.125% | |
Effective Interest Rate | 3.176% | 3.176% | |
Notes 2.4 Percent Due August 8th 2026 | |||
Debt Instrument [Line Items] | |||
Debt maturity date | Aug. 8, 2026 | Aug. 8, 2026 | |
Face Value | $ 4,000 | $ 4,000 | |
Stated Interest Rate | 2.40% | 2.40% | |
Effective Interest Rate | 2.464% | 2.464% | |
Notes 3.3 Percent Due February 6th 2027 | |||
Debt Instrument [Line Items] | |||
Debt maturity date | Feb. 6, 2027 | Feb. 6, 2027 | |
Face Value | $ 4,000 | $ 4,000 | |
Stated Interest Rate | 3.30% | 3.30% | |
Effective Interest Rate | 3.383% | 3.383% | |
Notes 3.125 Percent Due December 6th 2028 | |||
Debt Instrument [Line Items] | |||
Debt maturity date | [1] | Dec. 6, 2028 | Dec. 6, 2028 |
Face Value | [1] | $ 2,153 | $ 1,996 |
Stated Interest Rate | [1] | 3.125% | 3.125% |
Effective Interest Rate | [1] | 3.218% | 3.218% |
Notes 2.625 Percent Due May 2nd 2033 | |||
Debt Instrument [Line Items] | |||
Debt maturity date | [1] | May 2, 2033 | May 2, 2033 |
Face Value | [1] | $ 676 | $ 627 |
Stated Interest Rate | [1] | 2.625% | 2.625% |
Effective Interest Rate | [1] | 2.69% | 2.69% |
Notes 3.50 Percent Due February 12th 2035 | |||
Debt Instrument [Line Items] | |||
Debt maturity date | Feb. 12, 2035 | Feb. 12, 2035 | |
Face Value | $ 1,500 | $ 1,500 | |
Stated Interest Rate | 3.50% | 3.50% | |
Effective Interest Rate | 3.604% | 3.604% | |
Notes 4.2 Percent Due November 3rd 2035 | |||
Debt Instrument [Line Items] | |||
Debt maturity date | Nov. 3, 2035 | Nov. 3, 2035 | |
Face Value | $ 1,000 | $ 1,000 | |
Stated Interest Rate | 4.20% | 4.20% | |
Effective Interest Rate | 4.26% | 4.26% | |
Notes 3.45 Percent Due August 8th 2036 | |||
Debt Instrument [Line Items] | |||
Debt maturity date | Aug. 8, 2036 | Aug. 8, 2036 | |
Face Value | $ 2,250 | $ 2,250 | |
Stated Interest Rate | 3.45% | 3.45% | |
Effective Interest Rate | 3.51% | 3.51% | |
Notes 4.1 Percent Due February 6th 2037 | |||
Debt Instrument [Line Items] | |||
Debt maturity date | Feb. 6, 2037 | Feb. 6, 2037 | |
Face Value | $ 2,500 | $ 2,500 | |
Stated Interest Rate | 4.10% | 4.10% | |
Effective Interest Rate | 4.152% | 4.152% | |
Notes 5.2 Percent Due June 1st 2039 | |||
Debt Instrument [Line Items] | |||
Debt maturity date | Jun. 1, 2039 | Jun. 1, 2039 | |
Face Value | $ 750 | $ 750 | |
Stated Interest Rate | 5.20% | 5.20% | |
Effective Interest Rate | 5.24% | 5.24% | |
Notes 4.5 Percent Due October 1st 2040 | |||
Debt Instrument [Line Items] | |||
Debt maturity date | Oct. 1, 2040 | Oct. 1, 2040 | |
Face Value | $ 1,000 | $ 1,000 | |
Stated Interest Rate | 4.50% | 4.50% | |
Effective Interest Rate | 4.567% | 4.567% | |
Notes 5.3 Percent Due February 8th 2041 | |||
Debt Instrument [Line Items] | |||
Debt maturity date | Feb. 8, 2041 | Feb. 8, 2041 | |
Face Value | $ 1,000 | $ 1,000 | |
Stated Interest Rate | 5.30% | 5.30% | |
Effective Interest Rate | 5.361% | 5.361% | |
Notes 3.5 Percent Due November 15th 2042 | |||
Debt Instrument [Line Items] | |||
Debt maturity date | Nov. 15, 2042 | Nov. 15, 2042 | |
Face Value | $ 900 | $ 900 | |
Stated Interest Rate | 3.50% | 3.50% | |
Effective Interest Rate | 3.571% | 3.571% | |
Notes 3.750 Percent Due May 1st 2043 | |||
Debt Instrument [Line Items] | |||
Debt maturity date | May 1, 2043 | May 1, 2043 | |
Face Value | $ 500 | $ 500 | |
Stated Interest Rate | 3.75% | 3.75% | |
Effective Interest Rate | 3.829% | 3.829% | |
Notes 4.875 Percent Due December 15th 2043 | |||
Debt Instrument [Line Items] | |||
Debt maturity date | Dec. 15, 2043 | Dec. 15, 2043 | |
Face Value | $ 500 | $ 500 | |
Stated Interest Rate | 4.875% | 4.875% | |
Effective Interest Rate | 4.918% | 4.918% | |
Notes 3.750 Percent Due February 12th 2045 | |||
Debt Instrument [Line Items] | |||
Debt maturity date | Feb. 12, 2045 | Feb. 12, 2045 | |
Face Value | $ 1,750 | $ 1,750 | |
Stated Interest Rate | 3.75% | 3.75% | |
Effective Interest Rate | 3.80% | 3.80% | |
Notes 4.45 Percent Due November 3rd 2045 | |||
Debt Instrument [Line Items] | |||
Debt maturity date | Nov. 3, 2045 | Nov. 3, 2045 | |
Face Value | $ 3,000 | $ 3,000 | |
Stated Interest Rate | 4.45% | 4.45% | |
Effective Interest Rate | 4.492% | 4.492% | |
Notes 3.7 Percent Due August 8th 2046 | |||
Debt Instrument [Line Items] | |||
Debt maturity date | Aug. 8, 2046 | Aug. 8, 2046 | |
Face Value | $ 4,500 | $ 4,500 | |
Stated Interest Rate | 3.70% | 3.70% | |
Effective Interest Rate | 3.743% | 3.743% | |
Notes 4.25 Percent Due February 6th 2047 | |||
Debt Instrument [Line Items] | |||
Debt maturity date | Feb. 6, 2047 | Feb. 6, 2047 | |
Face Value | $ 3,000 | $ 3,000 | |
Stated Interest Rate | 4.25% | 4.25% | |
Effective Interest Rate | 4.287% | 4.287% | |
Notes 4.0 Percent Due February 12th 2055 | |||
Debt Instrument [Line Items] | |||
Debt maturity date | Feb. 12, 2055 | Feb. 12, 2055 | |
Face Value | $ 2,250 | $ 2,250 | |
Stated Interest Rate | 4.00% | 4.00% | |
Effective Interest Rate | 4.063% | 4.063% | |
Notes 4.75 Percent Due November 3rd 2055 | |||
Debt Instrument [Line Items] | |||
Debt maturity date | Nov. 3, 2055 | Nov. 3, 2055 | |
Face Value | $ 1,000 | $ 1,000 | |
Stated Interest Rate | 4.75% | 4.75% | |
Effective Interest Rate | 4.782% | 4.782% | |
Notes 3.95 Percent Due August 8th 2056 | |||
Debt Instrument [Line Items] | |||
Debt maturity date | Aug. 8, 2056 | Aug. 8, 2056 | |
Face Value | $ 2,250 | $ 2,250 | |
Stated Interest Rate | 3.95% | 3.95% | |
Effective Interest Rate | 4.033% | 4.033% | |
Notes 4.5 Percent Due February 6th 2057 | |||
Debt Instrument [Line Items] | |||
Debt maturity date | Feb. 6, 2057 | Feb. 6, 2057 | |
Face Value | $ 2,000 | $ 2,000 | |
Stated Interest Rate | 4.50% | 4.50% | |
Effective Interest Rate | 4.528% | 4.528% | |
[1] | Euro-denominated debt securities. |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | |||||
Mar. 31, 2018 | Dec. 31, 2017 | Mar. 31, 2017 | Jun. 30, 2018 | Dec. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Income Taxes [Line Items] | |||||||||
Effective tax rate | 14.00% | 23.00% | 70.00% | 21.00% | |||||
U.S. federal statutory tax rate | 35.00% | ||||||||
Provision for income taxes | $ 1,217 | $ 1,608 | $ 18,096 | $ 4,523 | |||||
Long-term income taxes | 30,669 | 30,669 | $ 13,485 | ||||||
Forecast | |||||||||
Income Taxes [Line Items] | |||||||||
U.S. federal statutory tax rate | 21.00% | 28.00% | |||||||
Tax Cuts and Jobs Act | |||||||||
Income Taxes [Line Items] | |||||||||
One-time transition tax on deferred foreign income, cash and other net current assets | 15.50% | ||||||||
One-time transition tax on deferred foreign income, remaining | 8.00% | ||||||||
Provision for income taxes | $ 13,800 | ||||||||
Charge related to transition tax | 17,800 | ||||||||
Benefit from impact of changes in tax rate | 4,000 | ||||||||
Benefit of deferred taxes related to GILTI | $ 454 | ||||||||
Tax Contingencies and Other Income Tax Liabilities | |||||||||
Income Taxes [Line Items] | |||||||||
Long-term income taxes | $ 14,500 | $ 14,500 | $ 13,500 |
Income Taxes - Additional Inf74
Income Taxes - Additional Information Regarding Examinations (Detail) | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2017 | Sep. 30, 2015 | Mar. 31, 2011 | Mar. 31, 2018 | |
Earliest Tax Year | Foreign Country | ||||
Income Tax Examination [Line Items] | ||||
Tax years subject to examination | 1,996 | |||
Latest Tax Year | Foreign Country | ||||
Income Tax Examination [Line Items] | ||||
Tax years subject to examination | 2,017 | |||
Internal Revenue Service (IRS) | Earliest Tax Year | ||||
Income Tax Examination [Line Items] | ||||
Tax years under audit | 2,010 | 2,007 | 2,004 | |
Tax years subject to examination | 2,010 | |||
Internal Revenue Service (IRS) | Latest Tax Year | ||||
Income Tax Examination [Line Items] | ||||
Tax years under audit | 2,013 | 2,009 | 2,006 | |
Tax years subject to examination | 2,016 |
Restructuring Charges - Additio
Restructuring Charges - Additional Information (Detail) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Jun. 30, 2017 | |
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | $ 0 | |
2017 Restructuring Plan | ||
Restructuring Cost and Reserve [Line Items] | ||
Completion date | Jun. 30, 2018 | |
Severance | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | $ 0 | |
Severance | 2017 Restructuring Plan | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | $ 306 |
Changes in Restructuring Liabil
Changes in Restructuring Liability (Detail) $ in Millions | 9 Months Ended | |
Mar. 31, 2018USD ($) | ||
Restructuring Cost and Reserve [Line Items] | ||
Balance, beginning of period | $ 432 | |
Restructuring charges | 0 | |
Cash paid | (397) | |
Other | (7) | |
Balance, end of period | 28 | |
Severance | ||
Restructuring Cost and Reserve [Line Items] | ||
Balance, beginning of period | 373 | |
Restructuring charges | 0 | |
Cash paid | (373) | |
Other | 0 | |
Balance, end of period | 0 | |
Other | ||
Restructuring Cost and Reserve [Line Items] | ||
Balance, beginning of period | 59 | [1] |
Restructuring charges | 0 | [1] |
Cash paid | (24) | [1] |
Other | (7) | [1] |
Balance, end of period | $ 28 | [1] |
[1] | Primarily reflects activities associated with the consolidation of our phone facilities, manufacturing operations, and contract termination costs. |
Unearned Revenue by Segment (De
Unearned Revenue by Segment (Detail) - USD ($) $ in Millions | Mar. 31, 2018 | Jun. 30, 2017 | Jul. 01, 2016 |
Deferred Revenue Arrangement [Line Items] | |||
Unearned revenue | $ 23,955 | $ 26,656 | $ 22,200 |
Productivity and Business Processes | |||
Deferred Revenue Arrangement [Line Items] | |||
Unearned revenue | 11,185 | 12,692 | |
Intelligent Cloud | |||
Deferred Revenue Arrangement [Line Items] | |||
Unearned revenue | 9,987 | 11,152 | |
More Personal Computing | |||
Deferred Revenue Arrangement [Line Items] | |||
Unearned revenue | $ 2,783 | $ 2,812 |
Unearned Revenue - Additional I
Unearned Revenue - Additional Information (Detail) - USD ($) $ in Millions | 9 Months Ended | ||
Mar. 31, 2018 | Jun. 30, 2017 | Jul. 01, 2016 | |
Revenue Recognition And Deferred Revenue [Abstract] | |||
Unearned revenue | $ 23,955 | $ 26,656 | $ 22,200 |
Revenue allocated to remaining performance obligations | $ 61,000 | ||
Revenue allocated to remaining performance obligations, percentage of revenue expected to be recognized over the next 12 months | 60.00% | ||
Revenue allocated to remaining performance obligations, expected timing of satisfaction | we expect to recognize approximately 60% of the revenue over the next 12 months and the remainder thereafter. |
Changes in Unearned Revenue (De
Changes in Unearned Revenue (Detail) $ in Millions | 9 Months Ended |
Mar. 31, 2018USD ($) | |
Revenue Recognition And Deferred Revenue [Abstract] | |
Balance, beginning of period | $ 26,656 |
Deferral of revenue | 37,217 |
Recognition of unearned revenue | (39,918) |
Balance, end of period | $ 23,955 |
Leases - Additional Information
Leases - Additional Information (Detail) $ in Millions | 9 Months Ended |
Mar. 31, 2018USD ($) | |
Operating Lease | |
Leases [Line Items] | |
Additional leases, primarily for datacenters, that have not yet commenced | $ 845 |
Finance Lease | |
Leases [Line Items] | |
Additional leases, primarily for datacenters, that have not yet commenced | $ 1,500 |
Lower Limit | |
Leases [Line Items] | |
Operating and Finance leases, remaining lease terms | 1 year |
Additional operating leases that have not yet commenced, lease terms | 1 year |
Additional finance leases that have not yet commenced, lease terms | 1 year |
Upper Limit | |
Leases [Line Items] | |
Operating and Finance leases, remaining lease terms | 20 years |
Operating leases, options to extend leases term | 5 years |
Finance leases, options to extend leases term | 5 years |
Operating and Finance leases, options to terminate leases term | 1 year |
Additional operating leases that have not yet commenced, lease terms | 20 years |
Additional finance leases that have not yet commenced, lease terms | 20 years |
Components of Lease Expense (De
Components of Lease Expense (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | |
Leases [Abstract] | ||||
Operating lease cost | $ 395 | $ 321 | $ 1,182 | $ 1,015 |
Finance lease cost: | ||||
Amortization of right-of-use assets | 70 | 29 | 175 | 67 |
Interest on lease liabilities | 47 | 19 | 121 | 46 |
Total finance lease cost | $ 117 | $ 48 | $ 296 | $ 113 |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information Related to Leases (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | |
Cash paid for amounts included in the measurement of lease liabilities: | ||||
Operating cash flows from operating leases | $ 388 | $ 331 | $ 1,132 | $ 912 |
Operating cash flows from finance leases | 46 | 19 | 121 | 46 |
Financing cash flows from finance leases | 37 | 14 | 93 | 29 |
Right-of-use assets obtained in exchange for lease obligations: | ||||
Operating leases | 570 | 130 | 1,269 | 304 |
Finance leases | $ 412 | $ 296 | $ 1,790 | $ 1,061 |
Supplemental Balance Sheet Info
Supplemental Balance Sheet Information Related to Leases (Detail) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Jun. 30, 2017 | |
Operating Leases | ||
Operating lease right-of-use assets | $ 6,859 | $ 6,555 |
Total operating lease liabilities | 7,133 | 6,795 |
Finance Leases | ||
Accumulated depreciation | (28,377) | (24,179) |
Property and equipment, net | 27,929 | 23,734 |
Total finance lease liabilities | $ 4,331 | $ 2,538 |
Weighted Average Remaining Lease Term | ||
Operating leases | 7 years | 7 years |
Finance leases | 14 years | 13 years |
Weighted Average Discount Rate | ||
Operating leases | 2.60% | 2.50% |
Finance leases | 5.30% | 4.70% |
Finance Lease | ||
Finance Leases | ||
Property and equipment, gross | $ 4,507 | $ 2,658 |
Accumulated depreciation | (336) | (161) |
Property and equipment, net | 4,171 | 2,497 |
Other Current Liabilities | ||
Operating Leases | ||
Total operating lease liabilities | 1,382 | 1,423 |
Finance Leases | ||
Total finance lease liabilities | 181 | 113 |
Operating Lease Liabilities | ||
Operating Leases | ||
Total operating lease liabilities | 5,751 | 5,372 |
Other Long-term Liabilities | ||
Finance Leases | ||
Total finance lease liabilities | $ 4,150 | $ 2,425 |
Maturities of lease liabilities
Maturities of lease liabilities (Detail) - USD ($) $ in Millions | Mar. 31, 2018 | Jun. 30, 2017 |
Leases [Abstract] | ||
Operating Leases, Year Ending June 30, 2018 (excluding the nine months ended March 31, 2018) | $ 388 | |
Operating Leases, Year Ending June 30, 2019 | 1,472 | |
Operating Leases, Year Ending June 30, 2020 | 1,340 | |
Operating Leases, Year Ending June 30, 2021 | 1,076 | |
Operating Leases, Year Ending June 30, 2022 | 887 | |
Operating Leases, Thereafter | 2,790 | |
Operating Leases, Total lease payments | 7,953 | |
Operating Leases, Less imputed interest | (820) | |
Operating Leases | 7,133 | $ 6,795 |
Finance Leases, Year Ending June 30, 2018 (excluding the nine months ended March 31, 2018) | 104 | |
Finance Leases, Year Ending June 30, 2019 | 384 | |
Finance Leases, Year Ending June 30, 2020 | 391 | |
Finance Leases, Year Ending June 30, 2021 | 399 | |
Finance Leases, Year Ending June 30, 2022 | 406 | |
Finance Leases, Thereafter | 4,442 | |
Finance Leases, Total lease payments | 6,126 | |
Finance Leases, Less imputed interest | (1,795) | |
Finance Leases | $ 4,331 | $ 2,538 |
Contingencies - Additional Info
Contingencies - Additional Information (Detail) $ in Millions | Mar. 31, 2018USD ($) |
Commitments And Contingencies Disclosure [Abstract] | |
Accrual for disclosed loss contingencies, current, ending balance | $ 371 |
Amount not accrued for estimated maximum losses for disclosed loss contingencies | $ 1,300 |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Detail) - USD ($) | Mar. 31, 2018 | Sep. 20, 2016 | Sep. 16, 2013 |
Share Repurchase Program 2013 | |||
Share Repurchases [Line Items] | |||
Amount available for repurchase under the share repurchase program approved by the company's Board of Directors | $ 40,000,000,000 | ||
Share Repurchase Program 2016 | |||
Share Repurchases [Line Items] | |||
Amount available for repurchase under the share repurchase program approved by the company's Board of Directors | $ 40,000,000,000 | ||
Unused amount of share repurchase program | $ 30,300,000,000 |
Share Repurchases (Detail)
Share Repurchases (Detail) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||||||
Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Mar. 31, 2018 | Mar. 31, 2017 | |
Share Repurchases [Line Items] | ||||||||
Shares of common stock repurchased | 147 | |||||||
Value of common stock repurchased | $ 8,683 | |||||||
Share Repurchase Program 2016 | ||||||||
Share Repurchases [Line Items] | ||||||||
Shares of common stock repurchased | 34 | 22 | 22 | 25 | 78 | |||
Value of common stock repurchased | $ 3,100 | $ 1,800 | $ 1,600 | $ 1,600 | $ 6,500 | |||
Share Repurchase Program 2013 | ||||||||
Share Repurchases [Line Items] | ||||||||
Shares of common stock repurchased | 59 | 63 | ||||||
Value of common stock repurchased | $ 3,533 | $ 3,550 |
Dividends Declared (Detail)
Dividends Declared (Detail) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | ||||||
Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Mar. 31, 2018 | Mar. 31, 2017 | |
Equity [Abstract] | ||||||||
Declaration Date | Mar. 12, 2018 | Nov. 29, 2017 | Sep. 19, 2017 | Mar. 14, 2017 | Nov. 30, 2016 | Sep. 20, 2016 | ||
Dividend Per Share | $ 0.42 | $ 0.42 | $ 0.42 | $ 0.39 | $ 0.39 | $ 0.39 | $ 1.26 | $ 1.17 |
Record Date | May 17, 2018 | Feb. 15, 2018 | Nov. 16, 2017 | May 18, 2017 | Feb. 16, 2017 | Nov. 17, 2016 | ||
Amount | $ 3,230 | $ 3,232 | $ 3,238 | $ 3,009 | $ 3,012 | $ 3,024 | ||
Payment Date | Jun. 14, 2018 | Mar. 8, 2018 | Dec. 14, 2017 | Jun. 8, 2017 | Mar. 9, 2017 | Dec. 8, 2016 |
Summary of Changes in Accumulat
Summary of Changes in Accumulated Other Comprehensive Income (Loss) by Component (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Balance, beginning of period | $ 87,711 | |||
Net change related to other comprehensive income (loss) | $ (754) | $ 189 | (1,780) | $ (953) |
Balance, end of period | 79,239 | 83,491 | 79,239 | 83,491 |
Derivatives | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Balance, beginning of period | 21 | 595 | 134 | 352 |
Unrealized gains (losses), net of tax | 15 | (60) | 30 | 424 |
Tax expense included in provision for income taxes | 0 | 2 | 2 | 8 |
Amounts reclassified from accumulated other comprehensive income | (8) | (165) | (136) | (406) |
Net change related to other comprehensive income (loss) | 7 | (225) | (106) | 18 |
Balance, end of period | 28 | 370 | 28 | 370 |
Derivatives | Revenue | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Reclassification adjustments for gains | (8) | (167) | (138) | (414) |
Investments | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Balance, beginning of period | 659 | 2,030 | 1,825 | 2,941 |
Unrealized gains (losses), net of tax | (644) | 571 | (961) | 367 |
Tax expense included in provision for income taxes | 145 | 273 | 602 | 654 |
Amounts reclassified from accumulated other comprehensive income | (372) | (506) | (1,221) | (1,213) |
Net change related to other comprehensive income (loss) | (1,016) | 65 | (2,182) | (846) |
Balance, end of period | (357) | 2,095 | (357) | 2,095 |
Investments | Other income (expense), net | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Reclassification adjustments for gains | (517) | (779) | (1,823) | (1,867) |
Translation adjustments and other | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Balance, beginning of period | (1,079) | (1,973) | (1,332) | (1,499) |
Net change related to other comprehensive income (loss) | 255 | 349 | 508 | (125) |
Balance, end of period | (824) | (1,624) | (824) | (1,624) |
Accumulated other comprehensive income | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Balance, beginning of period | (399) | 652 | 627 | 1,794 |
Net change related to other comprehensive income (loss) | (754) | 189 | (1,780) | (953) |
Balance, end of period | $ (1,153) | $ 841 | $ (1,153) | $ 841 |
Summary of Changes in Accumul90
Summary of Changes in Accumulated Other Comprehensive Income (Loss) by Component (Parenthetical) (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | |
Derivatives | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Unrealized gains (losses), tax | $ 7 | $ 3 | $ 8 | $ 7 |
Net change related to other comprehensive income (loss), tax | 7 | 1 | 6 | (1) |
Investments | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Unrealized gains (losses), tax | (186) | 307 | (347) | 197 |
Net change related to other comprehensive income (loss), tax | (331) | 34 | (949) | (457) |
Translation adjustments and other | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Net change related to other comprehensive income (loss), tax | $ 0 | $ 0 | $ (1) | $ 7 |
Segment Revenue (Detail)
Segment Revenue (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | |
Segment Reporting Information [Line Items] | ||||
Revenue | $ 26,819 | $ 23,212 | $ 80,275 | $ 70,966 |
Productivity and Business Processes | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 9,006 | 7,707 | 26,197 | 21,322 |
Intelligent Cloud | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 7,896 | 6,730 | 22,613 | 19,585 |
More Personal Computing | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | $ 9,917 | $ 8,775 | $ 31,465 | $ 30,059 |
Operating Income (Loss) by Segm
Operating Income (Loss) by Segment (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | |
Segment Reporting Information [Line Items] | ||||
Operating income (loss) | $ 8,292 | $ 6,723 | $ 24,679 | $ 21,343 |
Productivity and Business Processes | ||||
Segment Reporting Information [Line Items] | ||||
Operating income (loss) | 3,115 | 2,540 | 9,458 | 8,498 |
Intelligent Cloud | ||||
Segment Reporting Information [Line Items] | ||||
Operating income (loss) | 2,654 | 2,148 | 7,623 | 6,216 |
More Personal Computing | ||||
Segment Reporting Information [Line Items] | ||||
Operating income (loss) | $ 2,523 | $ 2,035 | $ 7,598 | $ 6,629 |
Segment Information and Geogr93
Segment Information and Geographic Data - Additional Information (Detail) | 9 Months Ended |
Mar. 31, 2018 | |
Segment Reporting [Abstract] | |
Sales to an individual customer | No sales to an individual customer or country other than the United States accounted for more than 10% of revenue for the three or nine months ended March 31, 2018 or 2017. |
Revenue Classified by Major Geo
Revenue Classified by Major Geographic Areas (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | ||
Geographic Information [Line Items] | |||||
Revenues | $ 26,819 | $ 23,212 | $ 80,275 | $ 70,966 | |
United States | |||||
Geographic Information [Line Items] | |||||
Revenues | [1] | 13,457 | 12,298 | 41,094 | 37,628 |
Other Countries | |||||
Geographic Information [Line Items] | |||||
Revenues | $ 13,362 | $ 10,914 | $ 39,181 | $ 33,338 | |
[1] | Includes billings to original equipment manufacturers and certain multinational organizations because of the nature of these businesses and the impracticability of determining the geographic source of the revenue. |
Revenue Classified by Significa
Revenue Classified by Significant Product and Service Offerings (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | |
Revenue from External Customer [Line Items] | ||||
Revenue | $ 26,819 | $ 23,212 | $ 80,275 | $ 70,966 |
Office Products and Cloud Services | ||||
Revenue from External Customer [Line Items] | ||||
Revenue | 7,088 | 6,234 | 20,739 | 18,655 |
Server Products and Cloud Services | ||||
Revenue from External Customer [Line Items] | ||||
Revenue | 6,343 | 5,297 | 18,139 | 15,319 |
Windows | ||||
Revenue from External Customer [Line Items] | ||||
Revenue | 4,612 | 4,253 | 14,094 | 13,701 |
Gaming | ||||
Revenue from External Customer [Line Items] | ||||
Revenue | 2,251 | 1,906 | 8,067 | 7,409 |
Search Advertising | ||||
Revenue from External Customer [Line Items] | ||||
Revenue | 1,784 | 1,599 | 5,243 | 4,633 |
Enterprise Services | ||||
Revenue from External Customer [Line Items] | ||||
Revenue | 1,489 | 1,383 | 4,295 | 4,109 |
Devices | ||||
Revenue from External Customer [Line Items] | ||||
Revenue | 1,219 | 958 | 3,851 | 4,017 |
Revenue from External Customer [Line Items] | ||||
Revenue | 1,335 | 976 | 3,795 | 1,204 |
Other products and services | ||||
Revenue from External Customer [Line Items] | ||||
Revenue | $ 698 | $ 606 | $ 2,052 | $ 1,919 |
Revenue Classified by Signifi96
Revenue Classified by Significant Product and Service Offerings (Parenthetical) (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | |
Revenue from External Customer [Line Items] | ||||
Revenue | $ 26,819 | $ 23,212 | $ 80,275 | $ 70,966 |
Commercial Cloud | ||||
Revenue from External Customer [Line Items] | ||||
Revenue | $ 6,000 | $ 3,800 | $ 16,300 | $ 10,400 |