Document and Entity Information
Document and Entity Information - $ / shares | 6 Months Ended | |
Dec. 31, 2022 | Jan. 19, 2023 | |
Entity Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Dec. 31, 2022 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q2 | |
Entity Registrant Name | MICROSOFT CORPORATION | |
Entity Central Index Key | 0000789019 | |
Current Fiscal Year End Date | --06-30 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity File Number | 001-37845 | |
Entity Incorporation, State or Country Code | WA | |
Entity Tax Identification Number | 91-1144442 | |
Entity Address, Address Line One | ONE MICROSOFT WAY | |
Entity Address, City or Town | REDMOND | |
Entity Address, State or Province | WA | |
Entity Address, Postal Zip Code | 98052-6399 | |
City Area Code | 425 | |
Local Phone Number | 882-8080 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity Common Stock, Shares Outstanding | 7,443,803,533 | |
Entity Common Stock, Par Value Per Share | $ 0.00000625 | |
Common Stock | ||
Entity Information [Line Items] | ||
Trading Symbol | MSFT | |
Title of 12(b) Security | Common stock, $0.00000625 par value per share | |
Security Exchange Name | NASDAQ | |
3.125% Notes Due 2028 | ||
Entity Information [Line Items] | ||
Trading Symbol | MSFT | |
Title of 12(b) Security | 3.125% Notes due 2028 | |
Security Exchange Name | NASDAQ | |
2.625% Notes Due 2033 | ||
Entity Information [Line Items] | ||
Trading Symbol | MSFT | |
Title of 12(b) Security | 2.625% Notes due 2033 | |
Security Exchange Name | NASDAQ |
INCOME STATEMENTS
INCOME STATEMENTS - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Revenue | $ 52,747 | $ 51,728 | $ 102,869 | $ 97,045 |
Cost of revenue | 17,488 | 16,960 | 32,940 | 30,606 |
Gross margin | 35,259 | 34,768 | 69,929 | 66,439 |
Research and development | 6,844 | 5,758 | 13,472 | 11,357 |
Sales and marketing | 5,679 | 5,379 | 10,805 | 9,926 |
General and administrative | 2,337 | 1,384 | 3,735 | 2,671 |
Operating income | 20,399 | 22,247 | 41,917 | 42,485 |
Other income (expense), net | (60) | 268 | (6) | 554 |
Income before income taxes | 20,339 | 22,515 | 41,911 | 43,039 |
Provision for income taxes | 3,914 | 3,750 | 7,930 | 3,769 |
Net income | $ 16,425 | $ 18,765 | $ 33,981 | $ 39,270 |
Earnings per share: | ||||
Basic | $ 2.20 | $ 2.50 | $ 4.56 | $ 5.23 |
Diluted | $ 2.20 | $ 2.48 | $ 4.54 | $ 5.19 |
Weighted average shares outstanding: | ||||
Basic | 7,451 | 7,505 | 7,454 | 7,509 |
Diluted | 7,473 | 7,555 | 7,479 | 7,561 |
Product | ||||
Revenue | $ 16,517 | $ 20,779 | $ 32,258 | $ 37,410 |
Cost of revenue | 5,690 | 6,331 | 9,992 | 10,123 |
Service and Other | ||||
Revenue | 36,230 | 30,949 | 70,611 | 59,635 |
Cost of revenue | $ 11,798 | $ 10,629 | $ 22,948 | $ 20,483 |
COMPREHENSIVE INCOME STATEMENTS
COMPREHENSIVE INCOME STATEMENTS - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Statement Of Income And Comprehensive Income [Abstract] | ||||
Net income | $ 16,425 | $ 18,765 | $ 33,981 | $ 39,270 |
Other comprehensive income (loss), net of tax: | ||||
Net change related to derivatives | (32) | 0 | (25) | 2 |
Net change related to investments | 348 | (743) | (1,549) | (1,165) |
Translation adjustments and other | 570 | (103) | (205) | (222) |
Other comprehensive income (loss) | 886 | (846) | (1,779) | (1,385) |
Comprehensive income | $ 17,311 | $ 17,919 | $ 32,202 | $ 37,885 |
BALANCE SHEETS
BALANCE SHEETS - USD ($) $ in Millions | Dec. 31, 2022 | Jun. 30, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 15,646 | $ 13,931 |
Short-term investments | 83,862 | 90,826 |
Total cash, cash equivalents, and short-term investments | 99,508 | 104,757 |
Accounts receivable, net of allowance for doubtful accounts of $485 and $633 | 35,833 | 44,261 |
Inventories | 2,980 | 3,742 |
Other current assets | 19,502 | 16,924 |
Total current assets | 157,823 | 169,684 |
Property and equipment, net of accumulated depreciation of $63,459 and $59,660 | 82,755 | 74,398 |
Operating lease right-of-use assets | 13,624 | 13,148 |
Equity investments | 7,097 | 6,891 |
Goodwill | 67,905 | 67,524 |
Intangible assets, net | 10,354 | 11,298 |
Other long-term assets | 24,994 | 21,897 |
Total assets | 364,552 | 364,840 |
Current liabilities: | ||
Accounts payable | 15,354 | 19,000 |
Current portion of long-term debt | 3,997 | 2,749 |
Accrued compensation | 9,030 | 10,661 |
Short-term income taxes | 3,553 | 4,067 |
Short-term unearned revenue | 36,982 | 45,538 |
Other current liabilities | 12,802 | 13,067 |
Total current liabilities | 81,718 | 95,082 |
Long-term debt | 44,119 | 47,032 |
Long-term income taxes | 24,169 | 26,069 |
Long-term unearned revenue | 2,644 | 2,870 |
Deferred income taxes | 289 | 230 |
Operating lease liabilities | 11,998 | 11,489 |
Other long-term liabilities | 16,479 | 15,526 |
Total liabilities | 181,416 | 198,298 |
Commitments and contingencies | ||
Stockholders’ equity: | ||
Common stock and paid-in capital – shares authorized 24,000; outstanding 7,447 and 7,464 | 90,225 | 86,939 |
Retained earnings | 99,368 | 84,281 |
Accumulated other comprehensive loss | (6,457) | (4,678) |
Total stockholders’ equity | 183,136 | 166,542 |
Total liabilities and stockholders’ equity | $ 364,552 | $ 364,840 |
BALANCE SHEETS (Parenthetical)
BALANCE SHEETS (Parenthetical) - USD ($) $ in Millions | Dec. 31, 2022 | Jun. 30, 2022 |
Statement Of Financial Position [Abstract] | ||
Accounts receivable, allowance for doubtful accounts | $ 485 | $ 633 |
Property and equipment, accumulated depreciation | $ 63,459 | $ 59,660 |
Common stock, shares authorized | 24,000,000,000 | 24,000,000,000 |
Common stock, outstanding | 7,447,000,000 | 7,464,000,000 |
CASH FLOWS STATEMENTS
CASH FLOWS STATEMENTS - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Operations | ||||
Net income | $ 16,425 | $ 18,765 | $ 33,981 | $ 39,270 |
Adjustments to reconcile net income to net cash from operations: | ||||
Depreciation, amortization, and other | 3,648 | 3,496 | 6,438 | 6,708 |
Stock-based compensation expense | 2,538 | 1,897 | 4,730 | 3,599 |
Net recognized losses (gains) on investments and derivatives | 214 | (307) | 192 | (671) |
Deferred income taxes | (1,305) | 183 | (2,496) | (5,787) |
Changes in operating assets and liabilities: | ||||
Accounts receivable | (3,164) | (5,543) | 8,565 | 4,943 |
Inventories | 1,305 | 394 | 762 | (383) |
Other current assets | (392) | 830 | (724) | 1,770 |
Other long-term assets | (65) | (908) | (731) | (1,506) |
Accounts payable | (2,058) | 235 | (3,625) | (236) |
Unearned revenue | (5,186) | (4,343) | (8,508) | (7,228) |
Income taxes | (2,863) | (2,057) | (2,453) | 596 |
Other current liabilities | 1,819 | 1,745 | (2,205) | (2,398) |
Other long-term liabilities | 257 | 93 | 445 | 343 |
Net cash from operations | 11,173 | 14,480 | 34,371 | 39,020 |
Financing | ||||
Repayments of debt | (750) | 0 | (1,750) | (4,826) |
Common stock issued | 243 | 291 | 818 | 903 |
Common stock repurchased | (5,459) | (7,433) | (11,032) | (15,117) |
Common stock cash dividends paid | (5,066) | (4,652) | (9,687) | (8,858) |
Other, net | (317) | (192) | (581) | (364) |
Net cash used in financing | (11,349) | (11,986) | (22,232) | (28,262) |
Investing | ||||
Additions to property and equipment | (6,274) | (5,865) | (12,557) | (11,675) |
Acquisition of companies, net of cash acquired, and purchases of intangible and other assets | (679) | (850) | (1,028) | (2,056) |
Purchases of investments | (11,599) | (2,505) | (16,612) | (12,814) |
Maturities of investments | 6,928 | 5,253 | 13,590 | 14,115 |
Sales of investments | 4,775 | 2,895 | 7,486 | 8,525 |
Other, net | (301) | (89) | (1,161) | (506) |
Net cash used in investing | (7,150) | (1,161) | (10,282) | (4,411) |
Effect of foreign exchange rates on cash and cash equivalents | 88 | 106 | (142) | 33 |
Net change in cash and cash equivalents | (7,238) | 1,439 | 1,715 | 6,380 |
Cash and cash equivalents, beginning of period | 22,884 | 19,165 | 13,931 | 14,224 |
Cash and cash equivalents, end of period | $ 15,646 | $ 20,604 | $ 15,646 | $ 20,604 |
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, 2021 | $ 83,111 | $ 57,055 | $ 1,822 | |
Common stock cash dividends | $ (4,652) | |||
Balance, end of period at Sep. 30, 2021 | 83,751 | 66,944 | 1,283 | |
Cash dividends declared per common share | $ 0.62 | |||
Balance, beginning of period at Jun. 30, 2021 | 83,111 | 57,055 | 1,822 | |
Common stock issued | 903 | |||
Net income | $ 39,270 | 39,270 | ||
Other comprehensive income (loss) | (1,385) | (1,385) | ||
Common stock cash dividends | (9,297) | (9,297) | ||
Common stock repurchased | (3,088) | (11,983) | ||
Stock-based compensation expense | 3,599 | |||
Other, net | 3 | |||
Balance, end of period at Dec. 31, 2021 | $ 160,010 | 84,528 | 75,045 | 437 |
Cash dividends declared per common share | $ 1.24 | |||
Balance, beginning of period at Sep. 30, 2021 | 83,751 | 66,944 | 1,283 | |
Common stock issued | 291 | |||
Net income | $ 18,765 | 18,765 | ||
Other comprehensive income (loss) | (846) | (846) | ||
Common stock cash dividends | (4,645) | (4,646) | ||
Common stock repurchased | (1,411) | (6,018) | ||
Stock-based compensation expense | 1,897 | |||
Other, net | 0 | |||
Balance, end of period at Dec. 31, 2021 | $ 160,010 | 84,528 | 75,045 | 437 |
Cash dividends declared per common share | $ 0.62 | |||
Balance, beginning of period at Jun. 30, 2022 | $ 166,542 | 86,939 | 84,281 | (4,678) |
Common stock cash dividends | $ (5,066) | |||
Balance, end of period at Sep. 30, 2022 | 88,535 | 92,374 | (7,343) | |
Cash dividends declared per common share | $ 0.68 | |||
Balance, beginning of period at Jun. 30, 2022 | $ 166,542 | 86,939 | 84,281 | (4,678) |
Common stock issued | 818 | |||
Net income | 33,981 | 33,981 | ||
Other comprehensive income (loss) | (1,779) | (1,779) | ||
Common stock cash dividends | (10,130) | (10,123) | ||
Common stock repurchased | (2,261) | (8,771) | ||
Stock-based compensation expense | 4,730 | |||
Other, net | (1) | |||
Balance, end of period at Dec. 31, 2022 | $ 183,136 | 90,225 | 99,368 | (6,457) |
Cash dividends declared per common share | $ 1.36 | |||
Balance, beginning of period at Sep. 30, 2022 | 88,535 | 92,374 | (7,343) | |
Common stock issued | 243 | |||
Net income | $ 16,425 | 16,425 | ||
Other comprehensive income (loss) | 886 | 886 | ||
Common stock cash dividends | (5,064) | (5,059) | ||
Common stock repurchased | (1,090) | (4,372) | ||
Stock-based compensation expense | 2,538 | |||
Other, net | (1) | |||
Balance, end of period at Dec. 31, 2022 | $ 183,136 | $ 90,225 | $ 99,368 | $ (6,457) |
Cash dividends declared per common share | $ 0.68 |
ACCOUNTING POLICIES
ACCOUNTING POLICIES | 6 Months Ended |
Dec. 31, 2022 | |
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 fiscal year 2022 Form 10-K filed with the U.S. Securities and Exchange Commission on July 28, 2022. Principles of Consolidation The consolidated financial statements include the accounts of Microsoft Corporation and its subsidiaries. Intercompany transactions and balances have been eliminated. 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 uncertain tax positions that have been recognized in our consolidated financial statements or tax returns; and determining the timing and amount of impairments for investments. Actual results and outcomes may differ from management’s estimates and assumptions due to risks and uncertainties. In July 2022, we completed an assessment of the useful lives of our server and network equipment. Due to investments in software that increased efficiencies in how we operate our server and network equipment, as well as advances in technology, we determined we should increase the estimated useful lives of both server and network equipment from four years to six years. This change in accounting estimate was effective beginning fiscal year 2023. Based on the carrying amount of server and network equipment included in property and equipment, net as of June 30, 2022, the effect of this change in estimate for the three months ended December 31, 2022 was an increase in operating income of $945 million and net income of $768 million, or $0.10 per both basic and diluted share. The effect of this change for the six months ended December 31, 2022 was an increase in operating income of $2.0 billion and net income of $1.6 billion, or $0.22 per both basic and diluted share. Financial Instruments Investments We consider all highly liquid interest-earning investments with a maturity of three months or less at the date of purchase to be cash equivalents. The fair values of these investments approximate their carrying values. In general, investments with original maturities of greater than three months and remaining maturities of less than one year are classified as short-term investments. Investments with maturities beyond one year may be classified as short-term based on their highly liquid nature and because such marketable securities represent the investment of cash that is available for current operations. Debt investments are classified as available-for-sale and realized gains and losses are recorded using the specific identification method. Changes in fair value, excluding credit losses and impairments, are recorded in other comprehensive income . Fair value is calculated based on publicly available market information or other estimates determined by management. If the cost of an investment exceeds its fair value, we evaluate, among other factors, general market conditions, credit quality of debt instrument issuers, and the extent to which the fair value is less than cost. To determine credit losses, we employ a systematic methodology that considers available quantitative and qualitative evidence . In addition, we consider specific adverse conditions related to the financial health of , and business outlook for , the investee . If we have plans to sell the security or it is more likely than not that we will be required to sell the security before recovery, then a decline in fair value below cost is recorded as an impairment charge in other income (expense), net and a new cost basis in the investment is established. If market, industry, and/or investee conditions deteriorate, we may incur future impairments. Equity investments with readily determinable fair values are measured at fair value. Equity investments without readily determinable fair values are measured using the equity method or measured at cost with adjustments for observable changes in price or impairments (referred to as the measurement alternative). We perform a qualitative assessment on a periodic basis and recognize an impairment if there are sufficient indicators that the fair value of the investment is less than carrying value. Changes in value are recorded in other income (expense), net. Derivatives Derivative instruments are recognized as either assets or liabilities and 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, gains and losses are recognized in other income (expense), net with offsetting gains and losses on the hedged items. Gains and losses representing hedge components excluded from the assessment of effectiveness are recognized in other income (expense), net. For derivative instruments designated as cash flow hedges, gains and losses are initially reported as a component of other comprehensive income and subsequently recognized in other income (expense), net with the corresponding hedged item. Gains and losses representing hedge components excluded from the assessment of effectiveness are recognized in other income (expense), net. For derivative instruments that are not designated as hedges, gains and losses from changes in fair values are primarily recognized in 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 investments include U.S. government securities, common and preferred stock, 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 investments include commercial paper, certificates of deposit, U.S. agency securities, foreign government bonds, mortgage- and asset-backed securities, corporate notes and bonds, and municipal securities. Our Level 2 derivative assets and liabilities include certain over-the-counter forward, 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 assets and liabilities include investments in corporate notes and bonds , municipal securities , 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 equity investments without readily determinable fair values on a nonrecurring basis. 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. Our other current financial assets and current financial liabilities have fair values that approximate their carrying values. Contract Balances and Other Receivables As of December 31, 2022 and June 30, 2022, other receivables due from suppliers were $545 million and $1.0 billion, respectively, and are included in accounts receivable, net in our consolidated balance sheets. As of both December 31, 2022 and June 30, 2022, long-term accounts receivable, net of allowance for doubtful accounts, was $4.2 billion and $3.8 billion, respectively, and is included in other long-term assets in our consolidated balance sheets. We record financing receivables when we offer certain of our customers the option to acquire our software products and services offerings through a financing program in a limited number of countries. As of December 31, 2022 and June 30, 2022, our financing receivables, net were $3.1 billion and $4.1 billion, respectively, for short-term and long-term financing receivables, which are included in other current assets and other long-term assets in our consolidated balance sheets. We record an allowance to cover expected losses based on troubled accounts, historical experience, and other currently available evidence. Employee Severance On January 18, 2023, we announced a decision to reduce our overall workforce by approximately 10,000 jobs through the third quarter of fiscal year 2023. During the three months ended December 31, 2022, we recorded $800 million of employee severance expenses related to these job eliminations as part of an ongoing employee benefit plan. These employee severance expenses were included in general and administrative expenses in our consolidated income statements and allocated to our segments based on relative gross margin. Refer to Note 17 – |
EARNINGS PER SHARE
EARNINGS PER SHARE | 6 Months Ended |
Dec. 31, 2022 | |
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 earnings per share) Three Months Ended December 31, Six Months Ended December 31, 2022 2021 2022 2021 Net income available for common shareholders (A) $ 16,425 $ 18,765 $ 33,981 $ 39,270 Weighted average outstanding shares of common stock (B) 7,451 7,505 7,454 7,509 Dilutive effect of stock-based awards 22 50 25 52 Common stock and common stock equivalents (C) 7,473 7,555 7,479 7,561 Earnings Per Share Basic (A/B) $ 2.20 $ 2.50 $ 4.56 $ 5.23 Diluted (A/C) $ 2.20 $ 2.48 $ 4.54 $ 5.19 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 | 6 Months Ended |
Dec. 31, 2022 | |
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 December 31, Six Months Ended December 31, 2022 2021 2022 2021 Interest and dividends income $ 700 $ 503 $ 1,341 $ 1,023 Interest expense (490 ) (525 ) (990 ) (1,064 ) Net recognized gains (losses) on investments (15 ) 300 (2 ) 671 Net gains (losses) on derivatives (199 ) 7 (190 ) 0 Net losses on foreign currency remeasurements (18 ) (13 ) (96 ) (78 ) Other, net (38 ) (4 ) (69 ) 2 Total $ (60 ) $ 268 $ (6 ) $ 554 Net Recognized Gains (Losses) on Investments Net recognized gains (losses) on debt investments were as follows: (In millions) Three Months Ended December 31, Six Months Ended December 31, 2022 2021 2022 2021 Realized gains from sales of available-for-sale securities $ 27 $ 12 $ 30 $ 31 Realized losses from sales of available-for-sale securities (23 ) (6 ) (43 ) (13 ) Impairments and allowance for credit losses 5 (5 ) (13 ) (8 ) Total $ 9 $ 1 $ (26 ) $ 10 Net recognized gains (losses) on equity investments were as follows: (In millions) Three Months Ended December 31, Six Months Ended December 31, 2022 2021 2022 2021 Net realized gains (losses) on investments sold $ (8 ) $ 31 $ 75 $ 68 Net unrealized gains (losses) on investments still held (7 ) 268 (35 ) 593 Impairments of investments (9 ) 0 (16 ) 0 Total $ (24 ) $ 299 $ 24 $ 661 |
INVESTMENTS
INVESTMENTS | 6 Months Ended |
Dec. 31, 2022 | |
Investments Debt And Equity Securities [Abstract] | |
INVESTMENTS | NOTE 4 — INVESTMENTS Investment Components The components of investments were as follows: (In millions) Fair Value Level Adjusted Cost Basis Unrealized Gains Unrealized Losses Recorded Basis Cash and Cash Equivalents Short-term Investments Equity Investments December 31, 2022 Changes in Fair Value Recorded in Other Comprehensive Income Commercial paper Level 2 $ 6,423 $ 0 $ 0 $ 6,423 $ 3,307 $ 3,116 $ 0 Certificates of deposit Level 2 2,694 0 0 2,694 2,250 444 0 U.S. government securities Level 1 67,941 0 (3,963 ) 63,978 1,029 62,949 0 U.S. agency securities Level 2 5,525 0 (6 ) 5,519 674 4,845 0 Foreign government bonds Level 2 491 1 (27 ) 465 0 465 0 Mortgage- and asset-backed securities Level 2 883 1 (43 ) 841 0 841 0 Corporate notes and bonds Level 2 11,310 8 (676 ) 10,642 0 10,642 0 Corporate notes and bonds Level 3 88 1 0 89 0 89 0 Municipal securities Level 2 370 8 (17 ) 361 0 361 0 Municipal securities Level 3 104 0 (7 ) 97 0 97 0 Total debt investments $ 95,829 $ 19 $ (4,739 ) $ 91,109 $ 7,260 $ 83,849 $ 0 Changes in Fair Value Recorded in Net Income Equity investments Level 1 $ 1,521 $ 1,082 $ 0 $ 439 Equity investments Other 6,658 0 0 6,658 Total equity investments $ 8,179 $ 1,082 $ 0 $ 7,097 Cash $ 7,304 $ 7,304 $ 0 $ 0 Derivatives, net (a) 13 0 13 0 Total $ 106,605 $ 15,646 $ 83,862 $ 7,097 (In millions) Fair Value Level Adjusted Cost Basis Unrealized Gains Unrealized Losses Recorded Basis Cash and Cash Equivalents Short-term Investments Equity Investments June 30, 2022 Changes in Fair Value Recorded in Other Comprehensive Income Commercial paper Level 2 $ 2,500 $ 0 $ 0 $ 2,500 $ 2,498 $ 2 $ 0 Certificates of deposit Level 2 2,071 0 0 2,071 2,032 39 0 U.S. government securities Level 1 79,696 29 (2,178 ) 77,547 9 77,538 0 U.S. agency securities Level 2 419 0 (9 ) 410 0 410 0 Foreign government bonds Level 2 506 0 (24 ) 482 0 482 0 Mortgage- and asset-backed securities Level 2 727 1 (30 ) 698 0 698 0 Corporate notes and bonds Level 2 11,661 4 (554 ) 11,111 0 11,111 0 Corporate notes and bonds Level 3 67 0 0 67 0 67 0 Municipal securities Level 2 368 19 (13 ) 374 0 374 0 Municipal securities Level 3 103 0 (6 ) 97 0 97 0 Total debt investments $ 98,118 $ 53 $ (2,814 ) $ 95,357 $ 4,539 $ 90,818 $ 0 Changes in Fair Value Recorded in Net Income Equity investments Level 1 $ 1,590 $ 1,134 $ 0 $ 456 Equity investments Other 6,435 0 0 6,435 Total equity investments $ 8,025 $ 1,134 $ 0 $ 6,891 Cash $ 8,258 $ 8,258 $ 0 $ 0 Derivatives, net (a) 8 0 8 0 Total $ 111,648 $ 13,931 $ 90,826 $ 6,891 (a) Refer to Note 5 – Derivatives for further information on the fair value of our derivative instruments. Equity investments presented as “Other” in the tables above include investments without readily determinable fair values measured using the equity method or measured at cost with adjustments for observable changes in price or impairments, and investments measured at fair value using net asset value as a practical expedient which are not categorized in the fair value hierarchy. As of both December 31, 2022 and June 30, 2022, equity investments without readily determinable fair values measured at cost with adjustments for observable changes in price or impairments were $3.8 billion. Unrealized Losses on Debt Investments Debt 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 December 31, 2022 U.S. government and agency securities $ 40,516 $ (2,586 ) $ 8,890 $ (1,383 ) $ 49,406 $ (3,969 ) Foreign government bonds 365 (14 ) 94 (13 ) 459 (27 ) Mortgage- and asset-backed securities 396 (22 ) 148 (21 ) 544 (43 ) Corporate notes and bonds 6,908 (337 ) 3,204 (339 ) 10,112 (676 ) Municipal securities 125 (5 ) 149 (19 ) 274 (24 ) Total $ 48,310 $ (2,964 ) $ 12,485 $ (1,775 ) $ 60,795 $ (4,739 ) Less than 12 Months 12 Months or Greater Total (In millions) Fair Value Unrealized Fair Value Unrealized Total June 30, 2022 U.S. government and agency securities $ 59,092 $ (1,835 ) $ 2,210 $ (352 ) $ 61,302 $ (2,187 ) Foreign government bonds 418 (18 ) 27 (6 ) 445 (24 ) Mortgage- and asset-backed securities 510 (26 ) 41 (4 ) 551 (30 ) Corporate notes and bonds 9,443 (477 ) 786 (77 ) 10,229 (554 ) Municipal securities 178 (12 ) 74 (7 ) 252 (19 ) Total $ 69,641 $ (2,368 ) $ 3,138 $ (446 ) $ 72,779 $ (2,814 ) Unrealized losses from fixed-income securities are primarily attributable to changes in interest rates. Management does not believe any remaining unrealized losses represent impairments based on our evaluation of available evidence. Debt Investment Maturities (In millions) Adjusted Cost Basis Estimated Fair Value December 31, 2022 Due in one year or less $ 28,885 $ 28,758 Due after one year through five years 50,751 48,134 Due after five years through 10 years 14,845 13,012 Due after 10 years 1,348 1,205 Total $ 95,829 $ 91,109 |
DERIVATIVES
DERIVATIVES | 6 Months Ended |
Dec. 31, 2022 | |
Derivative Instruments And Hedging Activities Disclosure [Abstract] | |
DERIVATIVES | NOTE 5 — DERIVATIVES We use derivative instruments to manage risks related to foreign currencies, interest rates, equity prices, 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. Foreign Currencies 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. Foreign currency risks related to certain non-U.S. dollar-denominated investments are hedged using foreign exchange forward contracts that are designated as fair value hedging instruments. Foreign currency risks related to certain Euro-denominated debt are hedged using foreign exchange forward contracts that are designated as cash flow hedging instruments. 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. Interest Rate Interest rate risks related to certain fixed-rate debt are hedged using interest rate swaps that are designated as fair value hedging instruments to effectively convert the fixed interest rates to floating interest rates. 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 . These contracts are not designated as hedging instruments and are included in “O ther contracts ” in the tables below. Equity Securities held in our equity investments portfolio are subject to market price risk. At times, we may hold options, futures, and swap contracts. These contracts are not designated as hedging instruments and are included in “Other contracts” in the tables below. Credit Our fixed-income portfolio is diversified and consists primarily of investment-grade securities. We use credit default swap contracts to manage credit exposures relative to broad-based indices and to facilitate portfolio diversification. These contracts are not designated as hedging instruments and are included in “Other contracts” in the tables below. 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 December 31, 2022, 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. The following table presents the notional amounts of our outstanding derivative instruments measured in U.S. dollar equivalents: (In millions) December 31, 2022 June 30, 2022 Designated as Hedging Instruments Foreign exchange contracts purchased $ 1,492 $ 635 Interest rate contracts purchased 1,089 1,139 Not Designated as Hedging Instruments Foreign exchange contracts purchased 7,042 10,322 Foreign exchange contracts sold 17,653 21,606 Other contracts purchased 4,803 2,773 Other contracts sold 1,023 544 Fair Values of Derivative Instruments The following table presents our derivative instruments: Derivative Derivative Derivative Derivative (In millions) Assets Liabilities Assets Liabilities December 31, 2022 June 30, 2022 Designated as Hedging Instruments Foreign exchange contracts $ 13 $ (79 ) $ 0 $ (77 ) Interest rate contracts 0 (3 ) 3 0 Not Designated as Hedging Instruments Foreign exchange contracts 195 (599 ) 333 (362 ) Other contracts 41 (305 ) 20 (112 ) Gross amounts of derivatives 249 (986 ) 356 (551 ) Gross amounts of derivatives offset in the balance sheet (203 ) 206 (130 ) 133 Cash collateral received 0 (12 ) 0 (75 ) Net amounts of derivatives $ 46 $ (792 ) $ 226 $ (493 ) Reported as Short-term investments $ 13 $ 0 $ 8 $ 0 Other current assets 27 0 218 0 Other long-term assets 6 0 0 0 Other current liabilities 0 (607 ) 0 (298 ) Other long-term liabilities 0 (185 ) 0 (195 ) Total $ 46 $ (792 ) $ 226 $ (493 ) Gross derivative assets and liabilities subject to legally enforceable master netting agreements for which we have elected to offset were $239 million and $793 million, respectively, as of December 31, 2022, and $343 million and $550 million, respectively, as of June 30, 2022. The following table presents the fair value of our derivatives instruments on a gross basis: (In millions) Level 1 Level 2 Level 3 Total December 31, 2022 Derivative assets $ 0 $ 241 $ 8 $ 249 Derivative liabilities 0 (986 ) 0 (986 ) June 30, 2022 Derivative assets 1 349 6 356 Derivative liabilities 0 (551 ) 0 (551 ) Gains (losses) on derivative instruments recognized in other income (expense), net were as follows: (In millions) Three Months Ended December 31, Six Months Ended December 31, 2022 2021 2022 2021 Designated as Fair Value Hedging Instruments Foreign exchange contracts Derivatives $ 0 $ 46 $ 0 $ 49 Hedged items 0 (45 ) 0 (50 ) Excluded from effectiveness assessment 0 0 0 4 Interest rate contracts Derivatives 5 (11 ) (38 ) (14 ) Hedged items (8 ) 15 35 22 Designated as Cash Flow Hedging Instruments Foreign exchange contracts Amount reclassified from accumulated other comprehensive income (loss) 103 (14 ) 44 (29 ) Not Designated as Hedging Instruments Foreign exchange contracts (250 ) 96 (10 ) 273 Other contracts (206 ) 6 (204 ) (12 ) Losses, net of tax, on derivative instruments recognized in our consolidated comprehensive income statements were as follows: (In millions) Three Months Ended December 31, Six Months Ended December 31, 2022 2021 2022 2021 Designated as Cash Flow Hedging Instruments Foreign exchange contracts Included in effectiveness assessment $ 49 $ (11 ) $ 9 $ (21 ) |
INVENTORIES
INVENTORIES | 6 Months Ended |
Dec. 31, 2022 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | NOTE 6 — INVENTORIES The components of inventories were as follows: (In millions) December 31, 2022 June 30, 2022 Raw materials $ 1,060 $ 1,144 Work in process 38 82 Finished goods 1,882 2,516 Total $ 2,980 $ 3,742 |
BUSINESS COMBINATIONS
BUSINESS COMBINATIONS | 6 Months Ended |
Dec. 31, 2022 | |
Business Combinations [Abstract] | |
BUSINESS COMBINATIONS | NOTE 7 — BUSINESS COMBINATIONS Nuance Communications, Inc. On March 4, 2022, we completed our acquisition of Nuance Communications, Inc. (“Nuance”) for a total purchase price of $18.8 billion, consisting primarily of cash. Nuance is a cloud and artificial intelligence (“AI”) software provider with healthcare and enterprise AI experience, and the acquisition will build on our industry-specific cloud offerings. The financial results of Nuance have been included in our consolidated financial statements since the date of the acquisition. Nuance is reported as part of our Intelligent Cloud segment. The allocation of the purchase price to goodwill was completed as of December 31, 2022. The major classes of assets and liabilities to which we have allocated the purchase price were as follows: (In millions) Goodwill (a) $ 16,326 Intangible assets 4,365 Other assets 42 Other liabilities (b) (1,972 ) Total $ 18,761 (a) Goodwill was assigned to our Intelligent Cloud segment and was primarily attributed to increased synergies that are expected to be achieved from the integration of Nuance. None of the goodwill is expected to be deductible for income tax purposes (b) Includes $986 million of convertible senior notes issued by Nuance in 2015 and 2017, substantially all of which have been redeemed. Following are the details of the purchase price allocated to the intangible assets acquired: (In millions, except average life) Amount Weighted Average Life Customer-related $ 2,610 9 years Technology-based 1,540 5 years Marketing-related 215 4 years Total $ 4,365 7 years Activision Blizzard, Inc. On January 18, 2022, we entered into a definitive agreement to acquire Activision Blizzard, Inc. (“Activision Blizzard”) for $95.00 per share in an all-cash transaction valued at $68.7 billion, inclusive of Activision Blizzard’s net cash. Activision Blizzard is a leader in game development and an interactive entertainment content publisher. The acquisition will accelerate the growth in our gaming business across mobile, PC, console, and cloud gaming. The has been approved by Activision Blizzard’s shareholders. We are continuing to engage with regulators reviewing the transaction and are working toward closing it obtaining required satisfaction of |
GOODWILL
GOODWILL | 6 Months Ended |
Dec. 31, 2022 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
GOODWILL | NOTE 8 — GOODWILL Changes in the carrying amount of goodwill were as follows: (In millions) June 30, 2022 Acquisitions Other December 31, 2022 Productivity and Business Processes $ 24,811 $ 11 $ (15 ) $ 24,807 Intelligent Cloud 30,182 183 87 30,452 More Personal Computing 12,531 0 115 12,646 Total $ 67,524 $ 194 $ 187 $ 67,905 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 table above. Also included in “Other” are business dispositions and transfers between segments due to reorganizations, as applicable. |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 6 Months Ended |
Dec. 31, 2022 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS | NOTE 9 — INTANGIBLE ASSETS The components of intangible assets, all of which are finite-lived, were as follows: (In millions) Gross Accumulated Net Gross Accumulated Net Carrying Amount December 31, 2022 June 30, 2022 Technology-based $ 11,093 $ (7,073 ) $ 4,020 $ 11,277 $ (6,958 ) $ 4,319 Customer-related 7,352 (3,646 ) 3,706 7,342 (3,171 ) 4,171 Marketing-related 4,942 (2,324 ) 2,618 4,942 (2,143 ) 2,799 Contract-based 21 (11 ) 10 16 (7 ) 9 Total $ 23,408 $ (13,054 ) $ 10,354 $ 23,577 $ (12,279 ) $ 11,298 Intangible assets amortization expense was $632 million and $1.3 billion for the three and six months ended December 31, 2022, respectively, and $446 million and $885 million for the three and six months ended December 31, 2021, respectively. The following table outlines the estimated future amortization expense related to intangible assets held as of December 31, 2022: (In millions) Year Ending June 30, 2023 (excluding the six months ended December 31, 2022) $ 1,256 2024 2,377 2025 1,826 2026 1,309 2027 874 Thereafter 2,712 Total $ 10,354 |
DEBT
DEBT | 6 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
DEBT | NOTE 10 — DEBT The components of debt were as follows: (In millions, issuance by calendar year) Maturities (calendar year) Stated Interest Rate Effective Interest Rate December 31, 2022 June 30, 2022 2009 issuance of $3.8 billion 2039 5.20% 5.24% $ 520 $ 520 2010 issuance of $4.8 billion 2040 4.50% 4.57% 486 486 2011 issuance of $2.3 billion 2041 5.30% 5.36% 718 718 2012 issuance of $2.3 billion 2022 – 2042 2.13% – 3.50% 2.24% – 3.57% 454 1,204 2013 issuance of $5.2 billion 2023 – 2043 2.38% – 4.88% 2.47% – 4.92% 2,814 2,814 2013 issuance of €4.1 billion 2028 – 2033 2.63% – 3.13% 2.69% – 3.22% 2,455 2,404 2015 issuance of $23.8 billion 2025 – 2055 2.70% – 4.75% 2.77% – 4.78% 9,805 10,805 2016 issuance of $19.8 billion 2023 – 2056 2.00% – 3.95% 2.10% – 4.03% 9,430 9,430 2017 issuance of $17.0 billion 2024 – 2057 2.88% – 4.50% 3.04% – 4.53% 8,945 8,945 2020 issuance of $10.0 billion 2050 – 2060 2.53% – 2.68% 2.53% – 2.68% 10,000 10,000 2021 issuance of $8.2 billion 2052 – 2062 2.92% – 3.04% 2.92% – 3.04% 8,185 8,185 Total face value 53,812 55,511 Unamortized discount and issuance costs (455 ) (471 ) Hedge fair value adjustments ( a ) (103 ) (68 ) Premium on debt exchange (5,138 ) (5,191 ) Total debt 48,116 49,781 Current portion of long-term debt (3,997 ) (2,749 ) Long-term debt $ 44,119 $ 47,032 ( a ) Refer to Note 5 – Derivatives for further information on the interest rate swaps related to fixed-rate debt. As of December 31, 2022 and June 30, 2022, the estimated fair value of long-term debt, including the current portion, was $46.4 billion and $50.9 billion, respectively. The estimated fair values are based on Level 2 inputs. Debt in the table above is comprised of senior unsecured obligations and ranks equally with our other outstanding obligations. Interest is paid semi-annually, except for the Euro-denominated debt, which is paid annually. The following table outlines maturities of our long-term debt , including the current portion, (In millions) Year Ending June 30, 2023 (excluding the six months ended December 31, 2022) $ 1,000 2024 5,250 2025 2,250 2026 3,000 2027 8,000 Thereafter 34,312 Total $ 53,812 |
INCOME TAXES
INCOME TAXES | 6 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 11 — INCOME TAXES Effective Tax Rate Our effective tax rate was 19% and 17% for the three months ended December 31, 2022 and 2021, respectively, and 19% and 9% for the six months ended December 31, 2022 and 2021, respectively. The increase in our effective tax rate for the three months ended December 31, 2022 compared to the prior year was primarily due to a decrease in tax benefits relating to stock-based compensation. The increase in our effective tax rate for the six months ended December 31, 2022 compared to the prior year was primarily due to a $3.3 billion net income tax benefit in the first quarter of fiscal year 2022 related to the transfer of intangible properties and a decrease in tax benefits relating to stock-based compensation. In the first quarter of fiscal year 2022, we transferred certain intangible properties from our Puerto Rico subsidiary to the U.S. The transfer of intangible properties resulted in a $3.3 billion net income tax benefit in the first quarter of fiscal year 2022, as the value of future U.S. tax deductions exceeded the current tax liability from the U.S. global intangible low-taxed income tax. Our effective tax rate was lower than the U.S. federal statutory rate for the three and six months ended December 31, 2022, 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 center in Ireland. Uncertain Tax Positions As of December 31, 2022 and June 30, 2022, unrecognized tax benefits and other income tax liabilities were $ 17.1 16.3 We settled a portion of the Internal Revenue Service (“IRS”) audit for tax years 2004 to 2006 in fiscal year 2011. In February 2012, the IRS withdrew its 2011 Revenue Agents Report related to unresolved issues for tax years 2004 to 2006 and reopened the audit phase of the examination. We also settled a portion of the IRS audit for tax years 2007 to 2009 in fiscal year 2016, and a portion of the IRS audit for tax years 2010 to 2013 in fiscal year 2018. In the second quarter of fiscal year 2021, we settled an additional portion of the IRS audits for tax years 2004 to 2013 and made a payment of $1.7 billion, including tax and interest. We remain under audit for tax years 2004 to 2017. As of December 31, 2022, the primary unresolved issues for the IRS audits relate to transfer pricing, which could have a material impact in our consolidated financial statements when the matters are resolved. We believe our allowances for income tax contingencies are adequate. We have not received a proposed assessment for the unresolved key transfer pricing 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 2022, some of which are currently under audit by local tax authorities. The resolution of each of these audits is not expected to be material to our consolidated financial statements. |
UNEARNED REVENUE
UNEARNED REVENUE | 6 Months Ended |
Dec. 31, 2022 | |
Revenue From Contract With Customer [Abstract] | |
UNEARNED REVENUE | NOTE 12 — UNEARNED REVENUE Unearned revenue by segment was as follows: (In millions) December 31, 2022 June 30, Productivity and Business Processes $ 20,120 $ 24,558 Intelligent Cloud 15,822 19,371 More Personal Computing 3,684 4,479 Total $ 39,626 $ 48,408 Changes in unearned revenue were as follows: (In millions) Six Months Ended December 31, 2022 Balance, beginning of period $ 48,408 Deferral of revenue 48,188 Recognition of unearned revenue (56,970 ) Balance, end of period $ 39,626 Revenue allocated to remaining performance obligations, which includes unearned revenue and amounts that will be invoiced and recognized as revenue in future periods, was $193 billion as of December 31, 2022, of which $189 billion is related to the commercial portion of revenue. We expect to recognize approximately 45% of this revenue over the next 12 months and the remainder thereafter. |
LEASES
LEASES | 6 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
LEASES | NOTE 13 — LEASES We have operating and finance leases for datacenters, corporate offices, research and development facilities, Microsoft Experience Centers, and certain equipment. Our leases have remaining lease terms of less than 1 year to 19 years, some of which include options to extend the leases for up to 5 years The components of lease expense were as follows: (In millions) Three Months Ended December 31, Six Months Ended December 31, 2022 2021 2022 2021 Operating lease cost $ 684 $ 469 $ 1,346 $ 1,057 Finance lease cost: Amortization of right-of-use assets $ 457 $ 264 $ 646 $ 490 Interest on lease liabilities 119 107 232 211 Total finance lease cost $ 576 $ 371 $ 878 $ 701 Supplemental cash flow information related to leases was as follows: (In millions) Three Months Ended December 31, Six Months Ended December 31, 2022 2021 2022 2021 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 645 $ 441 $ 1,299 $ 1,007 Operating cash flows from finance leases 119 107 232 211 Financing cash flows from finance leases 262 222 518 422 Right-of-use assets obtained in exchange for lease obligations: Operating leases 525 1,559 1,714 2,730 Finance leases 598 985 1,209 2,374 Supplemental balance sheet information related to leases was as follows: (In millions, except lease term and discount rate) December 31, 2022 June 30, 2022 Operating Leases Operating lease right-of-use assets $ 13,624 $ 13,148 Other current liabilities $ 2,287 $ 2,228 Operating lease liabilities 11,998 11,489 Total operating lease liabilities $ 14,285 $ 13,717 Finance Leases Property and equipment, at cost $ 18,514 $ 17,388 Accumulated depreciation (3,920 ) (3,285 ) Property and equipment, net $ 14,594 $ 14,103 Other current liabilities $ 1,105 $ 1,060 Other long-term liabilities 14,479 13,842 Total finance lease liabilities $ 15,584 $ 14,902 Weighted Average Remaining Lease Term Operating leases 8 years 8 years Finance leases 11 years 12 years Weighted Average Discount Rate Operating leases 2.5% 2.1% Finance leases 3.2% 3.1% The following table outlines maturities of our lease liabilities as of December 31, 2022: (In millions) Year Ending June 30, Operating Leases Finance Leases 2023 (excluding the six months ended December 31, 2022) $ 1,320 $ 790 2024 2,498 1,598 2025 2,217 1,912 2026 1,847 1,595 2027 1,533 1,603 Thereafter 6,528 11,196 Total lease payments 15,943 18,694 Less imputed interest (1,658 ) (3,110 ) Total $ 14,285 $ 15,584 As of December 31, 2022, we have additional operating and finance leases, primarily for datacenters, that have not yet commenced of $6.3 billion and $19.7 billion, respectively. These operating and finance leases will commence between fiscal year 2023 and fiscal year 2028 with lease terms of less than 1 year 18 years |
CONTINGENCIES
CONTINGENCIES | 6 Months Ended |
Dec. 31, 2022 | |
Commitments And Contingencies Disclosure [Abstract] | |
CONTINGENCIES | NOTE 14 — CONTINGENCIES U.S. Cell Phone Litigation Microsoft Mobile Oy, a subsidiary of Microsoft, along with other handset manufacturers and network operators, is a defendant in 46 lawsuits, including 45 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, the defendants in the consolidated cases moved to exclude the 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 the defendants’ motion to exclude the plaintiffs’ general causation experts. The defendants filed an interlocutory appeal to the District of Columbia Court of Appeals challenging the standard for evaluating expert scientific evidence. In October 2016, the Court of Appeals issued its decision adopting the standard advocated by the defendants and remanding the cases to the trial court for further proceedings under that standard. The plaintiffs have filed supplemental expert evidence, portions of which were stricken by the court. A hearing on general causation took place in September of 2022. 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 in 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 December 31, 2022, we accrued aggregate legal liabilities of $181 million. While we intend to defend these matters vigorously, adverse outcomes that we estimate could reach approximately $500 million in aggregate beyond recorded amounts are reasonably possible. Were unfavorable final outcomes to occur, there exists the possibility of a material adverse impact in our consolidated financial statements for the period in which the effects become reasonably estimable. |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 6 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
STOCKHOLDERS' EQUITY | NOTE 15 — STOCKHOLDERS’ EQUITY Share Repurchases On September 18, 2019, our Board of Directors approved a share repurchase program authorizing up to $40.0 billion in share repurchases. This share repurchase program commenced in February 2020 and was completed in November 2021. On September 14, 2021, our Board of Directors approved a share repurchase program authorizing up to $60.0 billion in share repurchases. This share repurchase program commenced in November 2021, following completion of the program approved on September 18, 2019, has no expiration date, and may be terminated at any time. As of December 31, 2022, $31.5 billion remained of this $60.0 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 2023 2022 First Quarter 17 $ 4,600 21 $ 6,200 Second Quarter 20 4,600 20 6,233 Total 37 $ 9,200 41 $ 12,433 All repurchases were made using cash resources. Shares repurchased during fiscal year 2023 were under the share repurchase program approved on September 14, 2021. Shares repurchased during the second quarter of fiscal year 2022 were under the share repurchase programs approved on both September 14, 2021 and September 18, 2019. Shares repurchased during the first quarter of fiscal year 2022 were under the share repurchase program approved on September 18, 2019. The above table excludes shares repurchased to settle employee tax withholding related to the vesting of stock awards of $859 million and $1.8 billion for the three and six months ended December 31, 2022, respectively, and $1.2 billion and $2.7 billion for the three and six months ended December 31, 2021, respectively. Dividends Our Board of Directors declared the following dividends: Declaration Date Record Date Payment Date Dividend Per Share Amount Fiscal Year 2023 (In millions) September 20, 2022 November 17, 2022 December 8, 2022 $ 0.68 $ 5,066 November 29, 2022 February 16, 2023 March 9, 2023 0.68 5,064 Total $ 1.36 $ 10,130 Fiscal Year 2022 September 14, 2021 November December $ 0.62 $ 4,652 December 7, 2021 February 17, 2022 March 10, 2022 0.62 4,645 Total $ 1.24 $ 9,297 The dividend declared on November 29, 2022 was included in other current liabilities as of December 31, 2022. |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | 6 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | NOTE 16 — ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) The following table summarizes the changes in accumulated other comprehensive income (loss) by component: (In millions) Three Months Ended December 31, Six Months Ended December 31, 2022 2021 2022 2021 Derivatives Balance, beginning of period $ (6 ) $ (17 ) $ (13 ) $ (19 ) Unrealized gains (losses), net of tax of $13 $2 49 (11 ) 9 (21 ) Reclassification adjustments for (gains) losses included in other income (expense), net (103 ) 14 (44 ) 29 Tax expense (benefit) included in provision for income taxes 22 (3 ) 10 (6 ) Amounts reclassified from accumulated other comprehensive income (loss) (81 ) 11 (34 ) 23 Net change related to derivatives, net of tax of $(9) , $(8) (32 ) 0 (25 ) 2 Balance, end of period $ (38 ) $ (17 ) $ (38 ) $ (17 ) Investments Balance, beginning of period $ (4,035 ) $ 2,800 $ (2,138 ) $ 3,222 Unrealized gains (losses), net of tax of $89 $(421) 340 (742 ) (1,585 ) (1,157 ) Reclassification adjustments for (gains) losses included in other income (expense), net 10 (1 ) 45 (10 ) Tax expense (benefit) included in provision for income taxes (2 ) 0 (9 ) 2 Amounts reclassified from accumulated other comprehensive income (loss) 8 (1 ) 36 (8 ) Net change related to investments, net of tax of $91 $(412) 348 (743 ) (1,549 ) (1,165 ) Balance, end of period $ (3,687 ) $ 2,057 $ (3,687 ) $ 2,057 Translation Adjustments and Other Balance, beginning of period $ (3,302 ) $ (1,500 ) $ (2,527 ) $ (1,381 ) Translation adjustments and other, net of tax of $0 , $0, $0 , 570 (103 ) (205 ) (222 ) Balance, end of period $ (2,732 ) $ (1,603 ) $ (2,732 ) $ (1,603 ) Accumulated other comprehensive income (loss), end of period $ (6,457 ) $ 437 $ (6,457 ) $ 437 |
SEGMENT INFORMATION AND GEOGRAP
SEGMENT INFORMATION AND GEOGRAPHIC DATA | 6 Months Ended |
Dec. 31, 2022 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION AND GEOGRAPHIC DATA | NOTE 17 — 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. We have recast certain prior period amounts to conform to the way we internally manage and monitor our business. 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 (Office 365 subscriptions, the Office 365 portion of Microsoft 365 Commercial subscriptions, and Office licensed on-premises), comprising Office, Exchange, SharePoint, Microsoft Teams, Office 365 Security and Compliance, and Microsoft Viva. • Office Consumer, including Microsoft 365 Consumer subscriptions, Office licensed on-premises, and other Office services. • LinkedIn, including Talent Solutions, Marketing Solutions, Premium Subscriptions, and Sales Solutions. • Dynamics business solutions, including Dynamics 365, comprising a set of intelligent, cloud-based applications across ERP, CRM, Customer Insights, Power Apps, and Power Automate; and on-premises ERP and CRM applications. Intelligent Cloud Our Intelligent Cloud segment consists of our public, private, and hybrid server products and cloud services that can power modern business and developers. This segment primarily comprises: • Server products and cloud services, including Azure and other cloud services; SQL Server, Windows Server, Visual Studio, System Center, and related Client Access Licenses (“CALs”); and Nuance and GitHub. • Enterprise Services, including Enterprise Support Services, Microsoft Consulting Services, and Nuance professional services. More Personal Computing Our More Personal Computing segment consists of products and services that put customers at the center of the experience with our technology. This segment primarily comprises: • Windows, including Windows original equipment manufacturer (“OEM”) 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; and Windows Internet of Things. • Devices, including Surface, HoloLens, and PC accessories. • Gaming, including Xbox hardware and Xbox content and services, comprising first- and third-party content (including games and in-game content), Xbox Game Pass and other subscriptions, Xbox Cloud Gaming, third-party disc royalties, advertising, and other cloud services. • Search and news 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 benefit our segments are allocated to them. These allocated costs include legal, including settlements and fines, information technology, human resources, finance, excise taxes, field selling, shared facilities services, customer service and support, and severance. Each allocation is measured differently based on the specific facts and circumstances of the costs being allocated and is generally based on relative gross margin or relative headcount. Segment revenue and operating income were as follows during the periods presented: (In millions) Three Months Ended December 31, Six Months Ended December 31, 2022 2021 2022 2021 Revenue Productivity and Business Processes $ 17,002 $ 15,936 $ 33,467 $ 30,975 Intelligent Cloud 21,508 18,262 41,833 35,174 More Personal Computing 14,237 17,530 27,569 30,896 Total $ 52,747 $ 51,728 $ 102,869 $ 97,045 Operating Income Productivity and Business Processes $ 8,175 $ 7,688 $ 16,498 $ 15,269 Intelligent Cloud 8,904 8,323 17,882 16,004 More Personal Computing 3,320 6,236 7,537 11,212 Total $ 20,399 $ 22,247 $ 41,917 $ 42,485 No sales to an individual customer or country other than the United States accounted for more than 10% of revenue for the three or six months ended December 31, 2022 or 2021. Revenue, classified by the major geographic areas in which our customers were located, was as follows: (In millions) Three Months Ended December 31, Six Months Ended December 31, 2022 2021 2022 2021 United States (a) $ 26,976 $ 26,463 $ 52,843 $ 49,293 Other countries 25,771 25,265 50,026 47,752 Total $ 52,747 $ 51,728 $ 102,869 $ 97,045 (a) Includes billings to OEMs 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, was as follows: (In millions) Three Months Ended December 31, Six Months Ended December 31, 2022 2021 2022 2021 Server products and cloud services $ 19,594 $ 16,382 $ 37,982 $ 31,452 Office products and cloud services 11,837 11,251 23,385 22,059 Windows 4,808 6,594 10,121 12,268 Gaming 4,758 5,442 8,368 9,035 3,876 3,531 7,539 6,667 Search and news advertising 3,223 3,064 6,151 5,720 Enterprise Services 1,862 1,823 3,738 3,614 Devices 1,430 2,357 2,878 3,771 Other 1,359 1,284 2,707 2,459 Total $ 52,747 $ 51,728 $ 102,869 $ 97,045 Our Microsoft Cloud revenue, which includes Azure and other cloud services, Office 365 Commercial, the commercial portion of LinkedIn, Dynamics 365, and other commercial cloud properties, was $27.1 billion and $52.8 billion for the three and six months ended December 31, 2022, respectively , and 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) | 6 Months Ended |
Dec. 31, 2022 | |
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 fiscal year 2022 Form 10-K filed with the U.S. Securities and Exchange Commission on July 28, 2022. |
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. |
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 uncertain tax positions that have been recognized in our consolidated financial statements or tax returns; and determining the timing and amount of impairments for investments. Actual results and outcomes may differ from management’s estimates and assumptions due to risks and uncertainties. In July 2022, we completed an assessment of the useful lives of our server and network equipment. Due to investments in software that increased efficiencies in how we operate our server and network equipment, as well as advances in technology, we determined we should increase the estimated useful lives of both server and network equipment from four years to six years. This change in accounting estimate was effective beginning fiscal year 2023. Based on the carrying amount of server and network equipment included in property and equipment, net as of June 30, 2022, the effect of this change in estimate for the three months ended December 31, 2022 was an increase in operating income of $945 million and net income of $768 million, or $0.10 per both basic and diluted share. The effect of this change for the six months ended December 31, 2022 was an increase in operating income of $2.0 billion and net income of $1.6 billion, or $0.22 per both basic and diluted share. |
Investments | Investments We consider all highly liquid interest-earning investments with a maturity of three months or less at the date of purchase to be cash equivalents. The fair values of these investments approximate their carrying values. In general, investments with original maturities of greater than three months and remaining maturities of less than one year are classified as short-term investments. Investments with maturities beyond one year may be classified as short-term based on their highly liquid nature and because such marketable securities represent the investment of cash that is available for current operations. Debt investments are classified as available-for-sale and realized gains and losses are recorded using the specific identification method. Changes in fair value, excluding credit losses and impairments, are recorded in other comprehensive income . Fair value is calculated based on publicly available market information or other estimates determined by management. If the cost of an investment exceeds its fair value, we evaluate, among other factors, general market conditions, credit quality of debt instrument issuers, and the extent to which the fair value is less than cost. To determine credit losses, we employ a systematic methodology that considers available quantitative and qualitative evidence . In addition, we consider specific adverse conditions related to the financial health of , and business outlook for , the investee . If we have plans to sell the security or it is more likely than not that we will be required to sell the security before recovery, then a decline in fair value below cost is recorded as an impairment charge in other income (expense), net and a new cost basis in the investment is established. If market, industry, and/or investee conditions deteriorate, we may incur future impairments. Equity investments with readily determinable fair values are measured at fair value. Equity investments without readily determinable fair values are measured using the equity method or measured at cost with adjustments for observable changes in price or impairments (referred to as the measurement alternative). We perform a qualitative assessment on a periodic basis and recognize an impairment if there are sufficient indicators that the fair value of the investment is less than carrying value. Changes in value are recorded in other income (expense), net. |
Derivatives | Derivatives Derivative instruments are recognized as either assets or liabilities and 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, gains and losses are recognized in other income (expense), net with offsetting gains and losses on the hedged items. Gains and losses representing hedge components excluded from the assessment of effectiveness are recognized in other income (expense), net. For derivative instruments designated as cash flow hedges, gains and losses are initially reported as a component of other comprehensive income and subsequently recognized in other income (expense), net with the corresponding hedged item. Gains and losses representing hedge components excluded from the assessment of effectiveness are recognized in other income (expense), net. For derivative instruments that are not designated as hedges, gains and losses from changes in fair values are primarily recognized in other income (expense), net. |
Fair Value Measurements | 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 investments include U.S. government securities, common and preferred stock, 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 investments include commercial paper, certificates of deposit, U.S. agency securities, foreign government bonds, mortgage- and asset-backed securities, corporate notes and bonds, and municipal securities. Our Level 2 derivative assets and liabilities include certain over-the-counter forward, 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 assets and liabilities include investments in corporate notes and bonds , municipal securities , 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 equity investments without readily determinable fair values on a nonrecurring basis. 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. Our other current financial assets and current financial liabilities have fair values that approximate their carrying values. |
Contract Balances and Other Receivables | Contract Balances and Other Receivables As of December 31, 2022 and June 30, 2022, other receivables due from suppliers were $545 million and $1.0 billion, respectively, and are included in accounts receivable, net in our consolidated balance sheets. As of both December 31, 2022 and June 30, 2022, long-term accounts receivable, net of allowance for doubtful accounts, was $4.2 billion and $3.8 billion, respectively, and is included in other long-term assets in our consolidated balance sheets. We record financing receivables when we offer certain of our customers the option to acquire our software products and services offerings through a financing program in a limited number of countries. As of December 31, 2022 and June 30, 2022, our financing receivables, net were $3.1 billion and $4.1 billion, respectively, for short-term and long-term financing receivables, which are included in other current assets and other long-term assets in our consolidated balance sheets. We record an allowance to cover expected losses based on troubled accounts, historical experience, and other currently available evidence. |
Employee Severance | Employee Severance On January 18, 2023, we announced a decision to reduce our overall workforce by approximately 10,000 jobs through the third quarter of fiscal year 2023. During the three months ended December 31, 2022, we recorded $800 million of employee severance expenses related to these job eliminations as part of an ongoing employee benefit plan. These employee severance expenses were included in general and administrative expenses in our consolidated income statements and allocated to our segments based on relative gross margin. Refer to Note 17 – |
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. |
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 benefit our segments are allocated to them. These allocated costs include legal, including settlements and fines, information technology, human resources, finance, excise taxes, field selling, shared facilities services, customer service and support, and severance. Each allocation is measured differently based on the specific facts and circumstances of the costs being allocated and is generally based on relative gross margin or relative headcount. 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. |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 6 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share [Abstract] | |
Basic and Diluted Earnings Per Share | The components of basic and diluted EPS were as follows: (In millions, except earnings per share) Three Months Ended December 31, Six Months Ended December 31, 2022 2021 2022 2021 Net income available for common shareholders (A) $ 16,425 $ 18,765 $ 33,981 $ 39,270 Weighted average outstanding shares of common stock (B) 7,451 7,505 7,454 7,509 Dilutive effect of stock-based awards 22 50 25 52 Common stock and common stock equivalents (C) 7,473 7,555 7,479 7,561 Earnings Per Share Basic (A/B) $ 2.20 $ 2.50 $ 4.56 $ 5.23 Diluted (A/C) $ 2.20 $ 2.48 $ 4.54 $ 5.19 |
OTHER INCOME (EXPENSE), NET (Ta
OTHER INCOME (EXPENSE), NET (Tables) | 6 Months Ended |
Dec. 31, 2022 | |
Components of Other Income (Expense), Net | The components of other income (expense), net were as follows: (In millions) Three Months Ended December 31, Six Months Ended December 31, 2022 2021 2022 2021 Interest and dividends income $ 700 $ 503 $ 1,341 $ 1,023 Interest expense (490 ) (525 ) (990 ) (1,064 ) Net recognized gains (losses) on investments (15 ) 300 (2 ) 671 Net gains (losses) on derivatives (199 ) 7 (190 ) 0 Net losses on foreign currency remeasurements (18 ) (13 ) (96 ) (78 ) Other, net (38 ) (4 ) (69 ) 2 Total $ (60 ) $ 268 $ (6 ) $ 554 |
Debt Securities | |
Net Recognized Gains (Losses) on Investments | Net recognized gains (losses) on debt investments were as follows: (In millions) Three Months Ended December 31, Six Months Ended December 31, 2022 2021 2022 2021 Realized gains from sales of available-for-sale securities $ 27 $ 12 $ 30 $ 31 Realized losses from sales of available-for-sale securities (23 ) (6 ) (43 ) (13 ) Impairments and allowance for credit losses 5 (5 ) (13 ) (8 ) Total $ 9 $ 1 $ (26 ) $ 10 |
Equity Securities | |
Net Recognized Gains (Losses) on Investments | Net recognized gains (losses) on equity investments were as follows: (In millions) Three Months Ended December 31, Six Months Ended December 31, 2022 2021 2022 2021 Net realized gains (losses) on investments sold $ (8 ) $ 31 $ 75 $ 68 Net unrealized gains (losses) on investments still held (7 ) 268 (35 ) 593 Impairments of investments (9 ) 0 (16 ) 0 Total $ (24 ) $ 299 $ 24 $ 661 |
INVESTMENTS (Tables)
INVESTMENTS (Tables) | 6 Months Ended |
Dec. 31, 2022 | |
Investments Debt And Equity Securities [Abstract] | |
Investment Components | The components of investments were as follows: (In millions) Fair Value Level Adjusted Cost Basis Unrealized Gains Unrealized Losses Recorded Basis Cash and Cash Equivalents Short-term Investments Equity Investments December 31, 2022 Changes in Fair Value Recorded in Other Comprehensive Income Commercial paper Level 2 $ 6,423 $ 0 $ 0 $ 6,423 $ 3,307 $ 3,116 $ 0 Certificates of deposit Level 2 2,694 0 0 2,694 2,250 444 0 U.S. government securities Level 1 67,941 0 (3,963 ) 63,978 1,029 62,949 0 U.S. agency securities Level 2 5,525 0 (6 ) 5,519 674 4,845 0 Foreign government bonds Level 2 491 1 (27 ) 465 0 465 0 Mortgage- and asset-backed securities Level 2 883 1 (43 ) 841 0 841 0 Corporate notes and bonds Level 2 11,310 8 (676 ) 10,642 0 10,642 0 Corporate notes and bonds Level 3 88 1 0 89 0 89 0 Municipal securities Level 2 370 8 (17 ) 361 0 361 0 Municipal securities Level 3 104 0 (7 ) 97 0 97 0 Total debt investments $ 95,829 $ 19 $ (4,739 ) $ 91,109 $ 7,260 $ 83,849 $ 0 Changes in Fair Value Recorded in Net Income Equity investments Level 1 $ 1,521 $ 1,082 $ 0 $ 439 Equity investments Other 6,658 0 0 6,658 Total equity investments $ 8,179 $ 1,082 $ 0 $ 7,097 Cash $ 7,304 $ 7,304 $ 0 $ 0 Derivatives, net (a) 13 0 13 0 Total $ 106,605 $ 15,646 $ 83,862 $ 7,097 (In millions) Fair Value Level Adjusted Cost Basis Unrealized Gains Unrealized Losses Recorded Basis Cash and Cash Equivalents Short-term Investments Equity Investments June 30, 2022 Changes in Fair Value Recorded in Other Comprehensive Income Commercial paper Level 2 $ 2,500 $ 0 $ 0 $ 2,500 $ 2,498 $ 2 $ 0 Certificates of deposit Level 2 2,071 0 0 2,071 2,032 39 0 U.S. government securities Level 1 79,696 29 (2,178 ) 77,547 9 77,538 0 U.S. agency securities Level 2 419 0 (9 ) 410 0 410 0 Foreign government bonds Level 2 506 0 (24 ) 482 0 482 0 Mortgage- and asset-backed securities Level 2 727 1 (30 ) 698 0 698 0 Corporate notes and bonds Level 2 11,661 4 (554 ) 11,111 0 11,111 0 Corporate notes and bonds Level 3 67 0 0 67 0 67 0 Municipal securities Level 2 368 19 (13 ) 374 0 374 0 Municipal securities Level 3 103 0 (6 ) 97 0 97 0 Total debt investments $ 98,118 $ 53 $ (2,814 ) $ 95,357 $ 4,539 $ 90,818 $ 0 Changes in Fair Value Recorded in Net Income Equity investments Level 1 $ 1,590 $ 1,134 $ 0 $ 456 Equity investments Other 6,435 0 0 6,435 Total equity investments $ 8,025 $ 1,134 $ 0 $ 6,891 Cash $ 8,258 $ 8,258 $ 0 $ 0 Derivatives, net (a) 8 0 8 0 Total $ 111,648 $ 13,931 $ 90,826 $ 6,891 (a) Refer to Note 5 – Derivatives for further information on the fair value of our derivative instruments. |
Unrealized Losses on Debt Investments | Debt 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 December 31, 2022 U.S. government and agency securities $ 40,516 $ (2,586 ) $ 8,890 $ (1,383 ) $ 49,406 $ (3,969 ) Foreign government bonds 365 (14 ) 94 (13 ) 459 (27 ) Mortgage- and asset-backed securities 396 (22 ) 148 (21 ) 544 (43 ) Corporate notes and bonds 6,908 (337 ) 3,204 (339 ) 10,112 (676 ) Municipal securities 125 (5 ) 149 (19 ) 274 (24 ) Total $ 48,310 $ (2,964 ) $ 12,485 $ (1,775 ) $ 60,795 $ (4,739 ) Less than 12 Months 12 Months or Greater Total (In millions) Fair Value Unrealized Fair Value Unrealized Total June 30, 2022 U.S. government and agency securities $ 59,092 $ (1,835 ) $ 2,210 $ (352 ) $ 61,302 $ (2,187 ) Foreign government bonds 418 (18 ) 27 (6 ) 445 (24 ) Mortgage- and asset-backed securities 510 (26 ) 41 (4 ) 551 (30 ) Corporate notes and bonds 9,443 (477 ) 786 (77 ) 10,229 (554 ) Municipal securities 178 (12 ) 74 (7 ) 252 (19 ) Total $ 69,641 $ (2,368 ) $ 3,138 $ (446 ) $ 72,779 $ (2,814 ) |
Debt Investment Maturities | Debt Investment Maturities (In millions) Adjusted Cost Basis Estimated Fair Value December 31, 2022 Due in one year or less $ 28,885 $ 28,758 Due after one year through five years 50,751 48,134 Due after five years through 10 years 14,845 13,012 Due after 10 years 1,348 1,205 Total $ 95,829 $ 91,109 |
DERIVATIVES (Tables)
DERIVATIVES (Tables) | 6 Months Ended |
Dec. 31, 2022 | |
Notional Amounts of Outstanding Derivative Instruments Measured in U.S. Dollar Equivalents | The following table presents the notional amounts of our outstanding derivative instruments measured in U.S. dollar equivalents: (In millions) December 31, 2022 June 30, 2022 Designated as Hedging Instruments Foreign exchange contracts purchased $ 1,492 $ 635 Interest rate contracts purchased 1,089 1,139 Not Designated as Hedging Instruments Foreign exchange contracts purchased 7,042 10,322 Foreign exchange contracts sold 17,653 21,606 Other contracts purchased 4,803 2,773 Other contracts sold 1,023 544 |
Fair Values of Derivative Instruments | The following table presents our derivative instruments: Derivative Derivative Derivative Derivative (In millions) Assets Liabilities Assets Liabilities December 31, 2022 June 30, 2022 Designated as Hedging Instruments Foreign exchange contracts $ 13 $ (79 ) $ 0 $ (77 ) Interest rate contracts 0 (3 ) 3 0 Not Designated as Hedging Instruments Foreign exchange contracts 195 (599 ) 333 (362 ) Other contracts 41 (305 ) 20 (112 ) Gross amounts of derivatives 249 (986 ) 356 (551 ) Gross amounts of derivatives offset in the balance sheet (203 ) 206 (130 ) 133 Cash collateral received 0 (12 ) 0 (75 ) Net amounts of derivatives $ 46 $ (792 ) $ 226 $ (493 ) Reported as Short-term investments $ 13 $ 0 $ 8 $ 0 Other current assets 27 0 218 0 Other long-term assets 6 0 0 0 Other current liabilities 0 (607 ) 0 (298 ) Other long-term liabilities 0 (185 ) 0 (195 ) Total $ 46 $ (792 ) $ 226 $ (493 ) The following table presents the fair value of our derivatives instruments on a gross basis: (In millions) Level 1 Level 2 Level 3 Total December 31, 2022 Derivative assets $ 0 $ 241 $ 8 $ 249 Derivative liabilities 0 (986 ) 0 (986 ) June 30, 2022 Derivative assets 1 349 6 356 Derivative liabilities 0 (551 ) 0 (551 ) |
Gains (Losses) on Derivative Instruments | Gains (losses) on derivative instruments recognized in other income (expense), net were as follows: (In millions) Three Months Ended December 31, Six Months Ended December 31, 2022 2021 2022 2021 Designated as Fair Value Hedging Instruments Foreign exchange contracts Derivatives $ 0 $ 46 $ 0 $ 49 Hedged items 0 (45 ) 0 (50 ) Excluded from effectiveness assessment 0 0 0 4 Interest rate contracts Derivatives 5 (11 ) (38 ) (14 ) Hedged items (8 ) 15 35 22 Designated as Cash Flow Hedging Instruments Foreign exchange contracts Amount reclassified from accumulated other comprehensive income (loss) 103 (14 ) 44 (29 ) Not Designated as Hedging Instruments Foreign exchange contracts (250 ) 96 (10 ) 273 Other contracts (206 ) 6 (204 ) (12 ) |
Cash Flow Hedges | Other Comprehensive Income (Loss) | |
Gains (Losses) on Derivative Instruments | Losses, net of tax, on derivative instruments recognized in our consolidated comprehensive income statements were as follows: (In millions) Three Months Ended December 31, Six Months Ended December 31, 2022 2021 2022 2021 Designated as Cash Flow Hedging Instruments Foreign exchange contracts Included in effectiveness assessment $ 49 $ (11 ) $ 9 $ (21 ) |
INVENTORIES (Tables)
INVENTORIES (Tables) | 6 Months Ended |
Dec. 31, 2022 | |
Inventory Disclosure [Abstract] | |
Components of Inventories | The components of inventories were as follows: (In millions) December 31, 2022 June 30, 2022 Raw materials $ 1,060 $ 1,144 Work in process 38 82 Finished goods 1,882 2,516 Total $ 2,980 $ 3,742 |
BUSINESS COMBINATIONS (Tables)
BUSINESS COMBINATIONS (Tables) - Nuance Communications Inc. | 6 Months Ended |
Dec. 31, 2022 | |
Major Classes of Assets and Liabilities Allocated Purchase Price | The allocation of the purchase price to goodwill was completed as of December 31, 2022. The major classes of assets and liabilities to which we have allocated the purchase price were as follows: (In millions) Goodwill (a) $ 16,326 Intangible assets 4,365 Other assets 42 Other liabilities (b) (1,972 ) Total $ 18,761 (a) Goodwill was assigned to our Intelligent Cloud segment and was primarily attributed to increased synergies that are expected to be achieved from the integration of Nuance. None of the goodwill is expected to be deductible for income tax purposes (b) Includes $986 million of convertible senior notes issued by Nuance in 2015 and 2017, substantially all of which have been redeemed. |
Acquired Intangible Assets | Following are the details of the purchase price allocated to the intangible assets acquired: (In millions, except average life) Amount Weighted Average Life Customer-related $ 2,610 9 years Technology-based 1,540 5 years Marketing-related 215 4 years Total $ 4,365 7 years |
GOODWILL (Tables)
GOODWILL (Tables) | 6 Months Ended |
Dec. 31, 2022 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Carrying Amount of Goodwill | Changes in the carrying amount of goodwill were as follows: (In millions) June 30, 2022 Acquisitions Other December 31, 2022 Productivity and Business Processes $ 24,811 $ 11 $ (15 ) $ 24,807 Intelligent Cloud 30,182 183 87 30,452 More Personal Computing 12,531 0 115 12,646 Total $ 67,524 $ 194 $ 187 $ 67,905 |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 6 Months Ended |
Dec. 31, 2022 | |
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 Carrying Amount December 31, 2022 June 30, 2022 Technology-based $ 11,093 $ (7,073 ) $ 4,020 $ 11,277 $ (6,958 ) $ 4,319 Customer-related 7,352 (3,646 ) 3,706 7,342 (3,171 ) 4,171 Marketing-related 4,942 (2,324 ) 2,618 4,942 (2,143 ) 2,799 Contract-based 21 (11 ) 10 16 (7 ) 9 Total $ 23,408 $ (13,054 ) $ 10,354 $ 23,577 $ (12,279 ) $ 11,298 |
Estimated Future Amortization Expense Related to Intangible Assets | The following table outlines the estimated future amortization expense related to intangible assets held as of December 31, 2022: (In millions) Year Ending June 30, 2023 (excluding the six months ended December 31, 2022) $ 1,256 2024 2,377 2025 1,826 2026 1,309 2027 874 Thereafter 2,712 Total $ 10,354 |
DEBT (Tables)
DEBT (Tables) | 6 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
Debt | The components of debt were as follows: (In millions, issuance by calendar year) Maturities (calendar year) Stated Interest Rate Effective Interest Rate December 31, 2022 June 30, 2022 2009 issuance of $3.8 billion 2039 5.20% 5.24% $ 520 $ 520 2010 issuance of $4.8 billion 2040 4.50% 4.57% 486 486 2011 issuance of $2.3 billion 2041 5.30% 5.36% 718 718 2012 issuance of $2.3 billion 2022 – 2042 2.13% – 3.50% 2.24% – 3.57% 454 1,204 2013 issuance of $5.2 billion 2023 – 2043 2.38% – 4.88% 2.47% – 4.92% 2,814 2,814 2013 issuance of €4.1 billion 2028 – 2033 2.63% – 3.13% 2.69% – 3.22% 2,455 2,404 2015 issuance of $23.8 billion 2025 – 2055 2.70% – 4.75% 2.77% – 4.78% 9,805 10,805 2016 issuance of $19.8 billion 2023 – 2056 2.00% – 3.95% 2.10% – 4.03% 9,430 9,430 2017 issuance of $17.0 billion 2024 – 2057 2.88% – 4.50% 3.04% – 4.53% 8,945 8,945 2020 issuance of $10.0 billion 2050 – 2060 2.53% – 2.68% 2.53% – 2.68% 10,000 10,000 2021 issuance of $8.2 billion 2052 – 2062 2.92% – 3.04% 2.92% – 3.04% 8,185 8,185 Total face value 53,812 55,511 Unamortized discount and issuance costs (455 ) (471 ) Hedge fair value adjustments ( a ) (103 ) (68 ) Premium on debt exchange (5,138 ) (5,191 ) Total debt 48,116 49,781 Current portion of long-term debt (3,997 ) (2,749 ) Long-term debt $ 44,119 $ 47,032 ( a ) Refer to Note 5 – Derivatives for further information on the interest rate swaps related to fixed-rate debt. |
Maturities of Long-term Debt Including Current Portion | The following table outlines maturities of our long-term debt , including the current portion, (In millions) Year Ending June 30, 2023 (excluding the six months ended December 31, 2022) $ 1,000 2024 5,250 2025 2,250 2026 3,000 2027 8,000 Thereafter 34,312 Total $ 53,812 |
UNEARNED REVENUE (Tables)
UNEARNED REVENUE (Tables) | 6 Months Ended |
Dec. 31, 2022 | |
Revenue From Contract With Customer [Abstract] | |
Unearned Revenue by Segment | Unearned revenue by segment was as follows: (In millions) December 31, 2022 June 30, Productivity and Business Processes $ 20,120 $ 24,558 Intelligent Cloud 15,822 19,371 More Personal Computing 3,684 4,479 Total $ 39,626 $ 48,408 |
Changes in Unearned Revenue | Changes in unearned revenue were as follows: (In millions) Six Months Ended December 31, 2022 Balance, beginning of period $ 48,408 Deferral of revenue 48,188 Recognition of unearned revenue (56,970 ) Balance, end of period $ 39,626 |
LEASES (Tables)
LEASES (Tables) | 6 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
Components of Lease Expense | The components of lease expense were as follows: (In millions) Three Months Ended December 31, Six Months Ended December 31, 2022 2021 2022 2021 Operating lease cost $ 684 $ 469 $ 1,346 $ 1,057 Finance lease cost: Amortization of right-of-use assets $ 457 $ 264 $ 646 $ 490 Interest on lease liabilities 119 107 232 211 Total finance lease cost $ 576 $ 371 $ 878 $ 701 |
Supplemental Cash Flow Information Related to Leases | Supplemental cash flow information related to leases was as follows: (In millions) Three Months Ended December 31, Six Months Ended December 31, 2022 2021 2022 2021 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 645 $ 441 $ 1,299 $ 1,007 Operating cash flows from finance leases 119 107 232 211 Financing cash flows from finance leases 262 222 518 422 Right-of-use assets obtained in exchange for lease obligations: Operating leases 525 1,559 1,714 2,730 Finance leases 598 985 1,209 2,374 |
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) December 31, 2022 June 30, 2022 Operating Leases Operating lease right-of-use assets $ 13,624 $ 13,148 Other current liabilities $ 2,287 $ 2,228 Operating lease liabilities 11,998 11,489 Total operating lease liabilities $ 14,285 $ 13,717 Finance Leases Property and equipment, at cost $ 18,514 $ 17,388 Accumulated depreciation (3,920 ) (3,285 ) Property and equipment, net $ 14,594 $ 14,103 Other current liabilities $ 1,105 $ 1,060 Other long-term liabilities 14,479 13,842 Total finance lease liabilities $ 15,584 $ 14,902 Weighted Average Remaining Lease Term Operating leases 8 years 8 years Finance leases 11 years 12 years Weighted Average Discount Rate Operating leases 2.5% 2.1% Finance leases 3.2% 3.1% |
Maturities of Lease Liabilities | The following table outlines maturities of our lease liabilities as of December 31, 2022: (In millions) Year Ending June 30, Operating Leases Finance Leases 2023 (excluding the six months ended December 31, 2022) $ 1,320 $ 790 2024 2,498 1,598 2025 2,217 1,912 2026 1,847 1,595 2027 1,533 1,603 Thereafter 6,528 11,196 Total lease payments 15,943 18,694 Less imputed interest (1,658 ) (3,110 ) Total $ 14,285 $ 15,584 |
STOCKHOLDERS' EQUITY (Tables)
STOCKHOLDERS' EQUITY (Tables) | 6 Months Ended |
Dec. 31, 2022 | |
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 2023 2022 First Quarter 17 $ 4,600 21 $ 6,200 Second Quarter 20 4,600 20 6,233 Total 37 $ 9,200 41 $ 12,433 |
Dividends Declared | Our Board of Directors declared the following dividends: Declaration Date Record Date Payment Date Dividend Per Share Amount Fiscal Year 2023 (In millions) September 20, 2022 November 17, 2022 December 8, 2022 $ 0.68 $ 5,066 November 29, 2022 February 16, 2023 March 9, 2023 0.68 5,064 Total $ 1.36 $ 10,130 Fiscal Year 2022 September 14, 2021 November December $ 0.62 $ 4,652 December 7, 2021 February 17, 2022 March 10, 2022 0.62 4,645 Total $ 1.24 $ 9,297 |
ACCUMULATED OTHER COMPREHENSI_2
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Tables) | 6 Months Ended |
Dec. 31, 2022 | |
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 December 31, Six Months Ended December 31, 2022 2021 2022 2021 Derivatives Balance, beginning of period $ (6 ) $ (17 ) $ (13 ) $ (19 ) Unrealized gains (losses), net of tax of $13 $2 49 (11 ) 9 (21 ) Reclassification adjustments for (gains) losses included in other income (expense), net (103 ) 14 (44 ) 29 Tax expense (benefit) included in provision for income taxes 22 (3 ) 10 (6 ) Amounts reclassified from accumulated other comprehensive income (loss) (81 ) 11 (34 ) 23 Net change related to derivatives, net of tax of $(9) , $(8) (32 ) 0 (25 ) 2 Balance, end of period $ (38 ) $ (17 ) $ (38 ) $ (17 ) Investments Balance, beginning of period $ (4,035 ) $ 2,800 $ (2,138 ) $ 3,222 Unrealized gains (losses), net of tax of $89 $(421) 340 (742 ) (1,585 ) (1,157 ) Reclassification adjustments for (gains) losses included in other income (expense), net 10 (1 ) 45 (10 ) Tax expense (benefit) included in provision for income taxes (2 ) 0 (9 ) 2 Amounts reclassified from accumulated other comprehensive income (loss) 8 (1 ) 36 (8 ) Net change related to investments, net of tax of $91 $(412) 348 (743 ) (1,549 ) (1,165 ) Balance, end of period $ (3,687 ) $ 2,057 $ (3,687 ) $ 2,057 Translation Adjustments and Other Balance, beginning of period $ (3,302 ) $ (1,500 ) $ (2,527 ) $ (1,381 ) Translation adjustments and other, net of tax of $0 , $0, $0 , 570 (103 ) (205 ) (222 ) Balance, end of period $ (2,732 ) $ (1,603 ) $ (2,732 ) $ (1,603 ) Accumulated other comprehensive income (loss), end of period $ (6,457 ) $ 437 $ (6,457 ) $ 437 |
SEGMENT INFORMATION AND GEOGR_2
SEGMENT INFORMATION AND GEOGRAPHIC DATA (Tables) | 6 Months Ended |
Dec. 31, 2022 | |
Segment Reporting [Abstract] | |
Segment Revenue | Segment revenue and operating income were as follows during the periods presented: (In millions) Three Months Ended December 31, Six Months Ended December 31, 2022 2021 2022 2021 Revenue Productivity and Business Processes $ 17,002 $ 15,936 $ 33,467 $ 30,975 Intelligent Cloud 21,508 18,262 41,833 35,174 More Personal Computing 14,237 17,530 27,569 30,896 Total $ 52,747 $ 51,728 $ 102,869 $ 97,045 Operating Income Productivity and Business Processes $ 8,175 $ 7,688 $ 16,498 $ 15,269 Intelligent Cloud 8,904 8,323 17,882 16,004 More Personal Computing 3,320 6,236 7,537 11,212 Total $ 20,399 $ 22,247 $ 41,917 $ 42,485 |
Segment Operating Income (Loss) | Segment revenue and operating income were as follows during the periods presented: (In millions) Three Months Ended December 31, Six Months Ended December 31, 2022 2021 2022 2021 Revenue Productivity and Business Processes $ 17,002 $ 15,936 $ 33,467 $ 30,975 Intelligent Cloud 21,508 18,262 41,833 35,174 More Personal Computing 14,237 17,530 27,569 30,896 Total $ 52,747 $ 51,728 $ 102,869 $ 97,045 Operating Income Productivity and Business Processes $ 8,175 $ 7,688 $ 16,498 $ 15,269 Intelligent Cloud 8,904 8,323 17,882 16,004 More Personal Computing 3,320 6,236 7,537 11,212 Total $ 20,399 $ 22,247 $ 41,917 $ 42,485 |
Revenue Classified by Major Geographic Areas | Revenue, classified by the major geographic areas in which our customers were located, was as follows: (In millions) Three Months Ended December 31, Six Months Ended December 31, 2022 2021 2022 2021 United States (a) $ 26,976 $ 26,463 $ 52,843 $ 49,293 Other countries 25,771 25,265 50,026 47,752 Total $ 52,747 $ 51,728 $ 102,869 $ 97,045 (a) Includes billings to OEMs 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, classified by significant product and service offerings, was as follows: (In millions) Three Months Ended December 31, Six Months Ended December 31, 2022 2021 2022 2021 Server products and cloud services $ 19,594 $ 16,382 $ 37,982 $ 31,452 Office products and cloud services 11,837 11,251 23,385 22,059 Windows 4,808 6,594 10,121 12,268 Gaming 4,758 5,442 8,368 9,035 3,876 3,531 7,539 6,667 Search and news advertising 3,223 3,064 6,151 5,720 Enterprise Services 1,862 1,823 3,738 3,614 Devices 1,430 2,357 2,878 3,771 Other 1,359 1,284 2,707 2,459 Total $ 52,747 $ 51,728 $ 102,869 $ 97,045 Our Microsoft Cloud revenue, which includes Azure and other cloud services, Office 365 Commercial, the commercial portion of LinkedIn, Dynamics 365, and other commercial cloud properties, was $27.1 billion and $52.8 billion for the three and six months ended December 31, 2022, respectively , and |
Accounting Policies - Additiona
Accounting Policies - Additional Information (Detail) $ / shares in Units, $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
Jan. 18, 2023 Job | Jul. 01, 2022 | Dec. 31, 2022 USD ($) $ / shares | Dec. 31, 2021 USD ($) $ / shares | Dec. 31, 2022 USD ($) $ / shares | Dec. 31, 2021 USD ($) $ / shares | Jun. 30, 2022 USD ($) | |
Significant Accounting Policies [Line Items] | |||||||
Operating income | $ 20,399 | $ 22,247 | $ 41,917 | $ 42,485 | |||
Net income | $ 16,425 | $ 18,765 | $ 33,981 | $ 39,270 | |||
Income per basic share | $ / shares | $ 2.20 | $ 2.50 | $ 4.56 | $ 5.23 | |||
Income per diluted share | $ / shares | $ 2.20 | $ 2.48 | $ 4.54 | $ 5.19 | |||
Other receivables due from suppliers | $ 545 | $ 545 | $ 1,000 | ||||
Long-term accounts receivable, net of allowance for doubtful accounts | 4,200 | 4,200 | 3,800 | ||||
Financing receivables, net | 3,100 | 3,100 | $ 4,100 | ||||
Employee severance expenses | 800 | ||||||
Subsequent Event | |||||||
Significant Accounting Policies [Line Items] | |||||||
Estimated reduction in workforce | Job | 10,000 | ||||||
Service Life | |||||||
Significant Accounting Policies [Line Items] | |||||||
Operating income | 945 | 2,000 | |||||
Net income | $ 768 | $ 1,600 | |||||
Income per basic share | $ / shares | $ 0.10 | $ 0.22 | |||||
Income per diluted share | $ / shares | $ 0.10 | $ 0.22 | |||||
Server Equipment | Service Life | |||||||
Significant Accounting Policies [Line Items] | |||||||
Estimated useful lives | 6 years | 4 years | |||||
Network Equipment | Service Life | |||||||
Significant Accounting Policies [Line Items] | |||||||
Estimated useful lives | 6 years | 4 years |
Basic and Diluted Earnings Per
Basic and Diluted Earnings Per Share (Detail) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Earning Per Share Basic And Diluted [Abstract] | ||||
Net income available for common shareholders (A) | $ 16,425 | $ 18,765 | $ 33,981 | $ 39,270 |
Weighted average outstanding shares of common stock (B) | 7,451 | 7,505 | 7,454 | 7,509 |
Dilutive effect of stock-based awards | 22 | 50 | 25 | 52 |
Common stock and common stock equivalents (C) | 7,473 | 7,555 | 7,479 | 7,561 |
Earnings Per Share | ||||
Basic (A/B) | $ 2.20 | $ 2.50 | $ 4.56 | $ 5.23 |
Diluted (A/C) | $ 2.20 | $ 2.48 | $ 4.54 | $ 5.19 |
Components of Other Income (Exp
Components of Other Income (Expense), Net (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Other Income And Expenses [Abstract] | ||||
Interest and dividends income | $ 700 | $ 503 | $ 1,341 | $ 1,023 |
Interest expense | (490) | (525) | (990) | (1,064) |
Net recognized gains (losses) on investments | (15) | 300 | (2) | 671 |
Net gains (losses) on derivatives | (199) | 7 | (190) | 0 |
Net losses on foreign currency remeasurements | (18) | (13) | (96) | (78) |
Other, net | (38) | (4) | (69) | 2 |
Total | $ (60) | $ 268 | $ (6) | $ 554 |
Net Recognized Gains (Losses) o
Net Recognized Gains (Losses) on Debt Investments (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Schedule Of Gain Loss On Investments Including Marketable Securities And Investments Held At Cost Income Statement Reported Amounts Summary [Line Items] | ||||
Realized gains from sales of available-for-sale securities | $ 27 | $ 12 | $ 30 | $ 31 |
Realized losses from sales of available-for-sale securities | (23) | (6) | (43) | (13) |
Total | (15) | 300 | (2) | 671 |
Debt Securities | ||||
Schedule Of Gain Loss On Investments Including Marketable Securities And Investments Held At Cost Income Statement Reported Amounts Summary [Line Items] | ||||
Impairments and allowance for credit losses | 5 | (5) | (13) | (8) |
Total | $ 9 | $ 1 | $ (26) | $ 10 |
Net Recognized Gains (Losses)_2
Net Recognized Gains (Losses) on Equity Investments (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Schedule Of Gain Loss On Investments Including Marketable Securities And Investments Held At Cost Income Statement Reported Amounts Summary [Line Items] | ||||
Net realized gains (losses) on investments sold | $ (8) | $ 31 | $ 75 | $ 68 |
Net unrealized gains (losses) on investments still held | (7) | 268 | (35) | 593 |
Total | (15) | 300 | (2) | 671 |
Equity Securities | ||||
Schedule Of Gain Loss On Investments Including Marketable Securities And Investments Held At Cost Income Statement Reported Amounts Summary [Line Items] | ||||
Impairments of investments | (9) | 0 | (16) | 0 |
Total | $ (24) | $ 299 | $ 24 | $ 661 |
Investment Components (Detail)
Investment Components (Detail) - USD ($) $ in Millions | Dec. 31, 2022 | Jun. 30, 2022 | |
Cash Cash Equivalents And Investments [Line Items] | |||
Debt investments, Adjusted Cost Basis | $ 95,829 | ||
Debt investments, Recorded Basis | 91,109 | ||
Derivative, net | 46 | $ 226 | |
Cash and cash equivalents | 15,646 | 13,931 | |
Short-term Investments | 83,862 | 90,826 | |
Equity Investments | 7,097 | 6,891 | |
Cash, cash equivalents, and investments | 106,605 | 111,648 | |
Equity investments | |||
Cash Cash Equivalents And Investments [Line Items] | |||
Equity investments, Recorded Basis | 8,179 | 8,025 | |
Cash and cash equivalents | 1,082 | 1,134 | |
Short-term Investments | 0 | 0 | |
Equity Investments | 7,097 | 6,891 | |
Equity investments | Other | |||
Cash Cash Equivalents And Investments [Line Items] | |||
Equity investments, Recorded Basis | 6,658 | 6,435 | |
Cash and cash equivalents | 0 | 0 | |
Short-term Investments | 0 | 0 | |
Equity Investments | 6,658 | 6,435 | |
Equity investments | Level 1 | |||
Cash Cash Equivalents And Investments [Line Items] | |||
Equity investments, Recorded Basis | 1,521 | 1,590 | |
Cash and cash equivalents | 1,082 | 1,134 | |
Short-term Investments | 0 | 0 | |
Equity Investments | 439 | 456 | |
Cash | |||
Cash Cash Equivalents And Investments [Line Items] | |||
Cash | 7,304 | 8,258 | |
Cash and cash equivalents | 7,304 | 8,258 | |
Short-term Investments | 0 | 0 | |
Equity Investments | 0 | 0 | |
Derivatives, net | |||
Cash Cash Equivalents And Investments [Line Items] | |||
Derivative, net | [1] | 13 | 8 |
Cash and cash equivalents | [1] | 0 | 0 |
Short-term Investments | [1] | 13 | 8 |
Equity Investments | [1] | 0 | 0 |
Debt Securities | |||
Cash Cash Equivalents And Investments [Line Items] | |||
Debt investments, Adjusted Cost Basis | 95,829 | 98,118 | |
Debt investments, Unrealized Gains | 19 | 53 | |
Debt investments, Unrealized Losses | (4,739) | (2,814) | |
Debt investments, Recorded Basis | 91,109 | 95,357 | |
Cash and cash equivalents | 7,260 | 4,539 | |
Short-term Investments | 83,849 | 90,818 | |
Equity Investments | 0 | 0 | |
Debt Securities | Commercial Paper | Level 2 | |||
Cash Cash Equivalents And Investments [Line Items] | |||
Debt investments, Adjusted Cost Basis | 6,423 | 2,500 | |
Debt investments, Unrealized Gains | 0 | 0 | |
Debt investments, Unrealized Losses | 0 | 0 | |
Debt investments, Recorded Basis | 6,423 | 2,500 | |
Cash and cash equivalents | 3,307 | 2,498 | |
Short-term Investments | 3,116 | 2 | |
Equity Investments | 0 | 0 | |
Debt Securities | Certificates of deposit | Level 2 | |||
Cash Cash Equivalents And Investments [Line Items] | |||
Debt investments, Adjusted Cost Basis | 2,694 | 2,071 | |
Debt investments, Unrealized Gains | 0 | 0 | |
Debt investments, Unrealized Losses | 0 | 0 | |
Debt investments, Recorded Basis | 2,694 | 2,071 | |
Cash and cash equivalents | 2,250 | 2,032 | |
Short-term Investments | 444 | 39 | |
Equity Investments | 0 | 0 | |
Debt Securities | U.S. government securities | Level 1 | |||
Cash Cash Equivalents And Investments [Line Items] | |||
Debt investments, Adjusted Cost Basis | 67,941 | 79,696 | |
Debt investments, Unrealized Gains | 0 | 29 | |
Debt investments, Unrealized Losses | (3,963) | (2,178) | |
Debt investments, Recorded Basis | 63,978 | 77,547 | |
Cash and cash equivalents | 1,029 | 9 | |
Short-term Investments | 62,949 | 77,538 | |
Equity Investments | 0 | 0 | |
Debt Securities | U.S. agency securities | Level 2 | |||
Cash Cash Equivalents And Investments [Line Items] | |||
Debt investments, Adjusted Cost Basis | 5,525 | 419 | |
Debt investments, Unrealized Gains | 0 | 0 | |
Debt investments, Unrealized Losses | (6) | (9) | |
Debt investments, Recorded Basis | 5,519 | 410 | |
Cash and cash equivalents | 674 | 0 | |
Short-term Investments | 4,845 | 410 | |
Equity Investments | 0 | 0 | |
Debt Securities | Foreign government bonds | Level 2 | |||
Cash Cash Equivalents And Investments [Line Items] | |||
Debt investments, Adjusted Cost Basis | 491 | 506 | |
Debt investments, Unrealized Gains | 1 | 0 | |
Debt investments, Unrealized Losses | (27) | (24) | |
Debt investments, Recorded Basis | 465 | 482 | |
Cash and cash equivalents | 0 | 0 | |
Short-term Investments | 465 | 482 | |
Equity Investments | 0 | 0 | |
Debt Securities | Mortgage- and asset-backed securities | Level 2 | |||
Cash Cash Equivalents And Investments [Line Items] | |||
Debt investments, Adjusted Cost Basis | 883 | 727 | |
Debt investments, Unrealized Gains | 1 | 1 | |
Debt investments, Unrealized Losses | (43) | (30) | |
Debt investments, Recorded Basis | 841 | 698 | |
Cash and cash equivalents | 0 | 0 | |
Short-term Investments | 841 | 698 | |
Equity Investments | 0 | 0 | |
Debt Securities | Corporate notes and bonds | Level 2 | |||
Cash Cash Equivalents And Investments [Line Items] | |||
Debt investments, Adjusted Cost Basis | 11,310 | 11,661 | |
Debt investments, Unrealized Gains | 8 | 4 | |
Debt investments, Unrealized Losses | (676) | (554) | |
Debt investments, Recorded Basis | 10,642 | 11,111 | |
Cash and cash equivalents | 0 | 0 | |
Short-term Investments | 10,642 | 11,111 | |
Equity Investments | 0 | 0 | |
Debt Securities | Corporate notes and bonds | Level 3 | |||
Cash Cash Equivalents And Investments [Line Items] | |||
Debt investments, Adjusted Cost Basis | 88 | 67 | |
Debt investments, Unrealized Gains | 1 | 0 | |
Debt investments, Unrealized Losses | 0 | 0 | |
Debt investments, Recorded Basis | 89 | 67 | |
Cash and cash equivalents | 0 | 0 | |
Short-term Investments | 89 | 67 | |
Equity Investments | 0 | 0 | |
Debt Securities | Municipal securities | Level 2 | |||
Cash Cash Equivalents And Investments [Line Items] | |||
Debt investments, Adjusted Cost Basis | 370 | 368 | |
Debt investments, Unrealized Gains | 8 | 19 | |
Debt investments, Unrealized Losses | (17) | (13) | |
Debt investments, Recorded Basis | 361 | 374 | |
Cash and cash equivalents | 0 | 0 | |
Short-term Investments | 361 | 374 | |
Equity Investments | 0 | 0 | |
Debt Securities | Municipal securities | Level 3 | |||
Cash Cash Equivalents And Investments [Line Items] | |||
Debt investments, Adjusted Cost Basis | 104 | 103 | |
Debt investments, Unrealized Gains | 0 | 0 | |
Debt investments, Unrealized Losses | (7) | (6) | |
Debt investments, Recorded Basis | 97 | 97 | |
Cash and cash equivalents | 0 | 0 | |
Short-term Investments | 97 | 97 | |
Equity Investments | $ 0 | $ 0 | |
[1]Refer to Note 5 – Derivatives for further information on the fair value of our derivative instruments. |
Investments - Additional Inform
Investments - Additional Information (Detail) - USD ($) $ in Billions | Dec. 31, 2022 | Jun. 30, 2022 |
Investments Debt And Equity Securities [Abstract] | ||
Equity investments without readily determinable fair values measured at cost with adjustments for observable changes in price or impairments | $ 3.8 | $ 3.8 |
Unrealized Losses on Debt Inves
Unrealized Losses on Debt Investments (Detail) - USD ($) $ in Millions | Dec. 31, 2022 | Jun. 30, 2022 |
Unrealized Losses on Investments [Line Items] | ||
Less than 12 Months - Fair Value | $ 48,310 | $ 69,641 |
Less than 12 Months - Unrealized Losses | (2,964) | (2,368) |
12 Months or Greater - Fair Value | 12,485 | 3,138 |
12 Months or Greater - Unrealized Losses | (1,775) | (446) |
Total Fair Value | 60,795 | 72,779 |
Total Unrealized Losses | (4,739) | (2,814) |
U.S. government and agency securities | ||
Unrealized Losses on Investments [Line Items] | ||
Less than 12 Months - Fair Value | 40,516 | 59,092 |
Less than 12 Months - Unrealized Losses | (2,586) | (1,835) |
12 Months or Greater - Fair Value | 8,890 | 2,210 |
12 Months or Greater - Unrealized Losses | (1,383) | (352) |
Total Fair Value | 49,406 | 61,302 |
Total Unrealized Losses | (3,969) | (2,187) |
Foreign government bonds | ||
Unrealized Losses on Investments [Line Items] | ||
Less than 12 Months - Fair Value | 365 | 418 |
Less than 12 Months - Unrealized Losses | (14) | (18) |
12 Months or Greater - Fair Value | 94 | 27 |
12 Months or Greater - Unrealized Losses | (13) | (6) |
Total Fair Value | 459 | 445 |
Total Unrealized Losses | (27) | (24) |
Mortgage- and asset-backed securities | ||
Unrealized Losses on Investments [Line Items] | ||
Less than 12 Months - Fair Value | 396 | 510 |
Less than 12 Months - Unrealized Losses | (22) | (26) |
12 Months or Greater - Fair Value | 148 | 41 |
12 Months or Greater - Unrealized Losses | (21) | (4) |
Total Fair Value | 544 | 551 |
Total Unrealized Losses | (43) | (30) |
Corporate notes and bonds | ||
Unrealized Losses on Investments [Line Items] | ||
Less than 12 Months - Fair Value | 6,908 | 9,443 |
Less than 12 Months - Unrealized Losses | (337) | (477) |
12 Months or Greater - Fair Value | 3,204 | 786 |
12 Months or Greater - Unrealized Losses | (339) | (77) |
Total Fair Value | 10,112 | 10,229 |
Total Unrealized Losses | (676) | (554) |
Municipal securities | ||
Unrealized Losses on Investments [Line Items] | ||
Less than 12 Months - Fair Value | 125 | 178 |
Less than 12 Months - Unrealized Losses | (5) | (12) |
12 Months or Greater - Fair Value | 149 | 74 |
12 Months or Greater - Unrealized Losses | (19) | (7) |
Total Fair Value | 274 | 252 |
Total Unrealized Losses | $ (24) | $ (19) |
Debt Investment Maturities (Det
Debt Investment Maturities (Detail) $ in Millions | Dec. 31, 2022 USD ($) |
Adjusted Cost Basis | |
Due in one year or less | $ 28,885 |
Due after one year through five years | 50,751 |
Due after five years through 10 years | 14,845 |
Due after 10 years | 1,348 |
Debt investments, Adjusted Cost Basis | 95,829 |
Estimated Fair Value | |
Due in one year or less | 28,758 |
Due after one year through five years | 48,134 |
Due after five years through 10 years | 13,012 |
Due after 10 years | 1,205 |
Total | $ 91,109 |
Derivatives - Additional Inform
Derivatives - Additional Information (Detail) - USD ($) | 6 Months Ended | |
Dec. 31, 2022 | Jun. 30, 2022 | |
Derivative [Line Items] | ||
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 | |
Gross amounts of derivative assets, elected to offset | 239,000,000 | $ 343,000,000 |
Gross amounts of derivative liabilities, elected to offset | $ 793,000,000 | $ 550,000,000 |
Senior Unsecured Obligations | ||
Derivative [Line Items] | ||
Debt instrument credit rating | AAA |
Notional Amounts of Outstanding
Notional Amounts of Outstanding Derivative Instruments Measured in U.S. Dollar Equivalents (Detail) - USD ($) $ in Millions | Dec. 31, 2022 | Jun. 30, 2022 |
Designated as Hedging Instruments | Foreign Exchange Contracts | Derivatives Purchased | ||
Derivative [Line Items] | ||
Notional amounts | $ 1,492 | $ 635 |
Designated as Hedging Instruments | Interest Rate Contracts | Derivatives Purchased | ||
Derivative [Line Items] | ||
Notional amounts | 1,089 | 1,139 |
Not Designated as Hedging Instruments | Foreign Exchange Contracts | Derivatives Purchased | ||
Derivative [Line Items] | ||
Notional amounts | 7,042 | 10,322 |
Not Designated as Hedging Instruments | Foreign Exchange Contracts | Derivatives Sold | ||
Derivative [Line Items] | ||
Notional amounts | 17,653 | 21,606 |
Not Designated as Hedging Instruments | Other Contracts | Derivatives Purchased | ||
Derivative [Line Items] | ||
Notional amounts | 4,803 | 2,773 |
Not Designated as Hedging Instruments | Other Contracts | Derivatives Sold | ||
Derivative [Line Items] | ||
Notional amounts | $ 1,023 | $ 544 |
Fair Values of Derivative Instr
Fair Values of Derivative Instruments (Detail) - USD ($) $ in Millions | Dec. 31, 2022 | Jun. 30, 2022 |
Derivatives Fair Value [Line Items] | ||
Derivative Assets | $ 249 | $ 356 |
Gross amounts of derivatives offset in the balance sheet, assets | (203) | (130) |
Cash collateral received, assets | 0 | 0 |
Net amounts of derivatives, assets | $ 46 | $ 226 |
Derivative Asset, Current, Statement of Financial Position [Extensible Enumeration] | Other current assets | Other current assets |
Derivative Asset, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Other long-term assets | Other long-term assets |
Derivative Liabilities | $ (986) | $ (551) |
Gross amounts of derivatives offset in the balance sheet, liabilities | 206 | 133 |
Cash collateral received, liabilities | (12) | (75) |
Net amounts of derivatives, liabilities | $ (792) | $ (493) |
Derivative Liability, Statement of Financial Position [Extensible Enumeration] | Other current liabilities | Other current liabilities |
Derivative Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Other long-term liabilities | Other long-term liabilities |
Level 1 | ||
Derivatives Fair Value [Line Items] | ||
Derivative Assets | $ 0 | $ 1 |
Derivative Liabilities | 0 | 0 |
Level 2 | ||
Derivatives Fair Value [Line Items] | ||
Derivative Assets | 241 | 349 |
Derivative Liabilities | (986) | (551) |
Level 3 | ||
Derivatives Fair Value [Line Items] | ||
Derivative Assets | 8 | 6 |
Derivative Liabilities | 0 | 0 |
Designated as Hedging Instruments | Foreign Exchange Contracts | ||
Derivatives Fair Value [Line Items] | ||
Derivative Assets | 13 | 0 |
Derivative Liabilities | (79) | (77) |
Designated as Hedging Instruments | Interest Rate Contracts | ||
Derivatives Fair Value [Line Items] | ||
Derivative Assets | 0 | 3 |
Derivative Liabilities | (3) | 0 |
Not Designated as Hedging Instruments | Foreign Exchange Contracts | ||
Derivatives Fair Value [Line Items] | ||
Derivative Assets | 195 | 333 |
Derivative Liabilities | (599) | (362) |
Not Designated as Hedging Instruments | Other Contracts | ||
Derivatives Fair Value [Line Items] | ||
Derivative Assets | 41 | 20 |
Derivative Liabilities | (305) | (112) |
Short-term Investments | ||
Derivatives Fair Value [Line Items] | ||
Net amounts of derivatives, assets | 13 | 8 |
Other Current Assets | ||
Derivatives Fair Value [Line Items] | ||
Net amounts of derivatives, assets | 27 | 218 |
Other Long-term Assets | ||
Derivatives Fair Value [Line Items] | ||
Net amounts of derivatives, assets | 6 | 0 |
Other Current Liabilities | ||
Derivatives Fair Value [Line Items] | ||
Net amounts of derivatives, liabilities | (607) | (298) |
Other Long-term Liabilities | ||
Derivatives Fair Value [Line Items] | ||
Net amounts of derivatives, liabilities | $ (185) | $ (195) |
Gains (Losses) on Derivative In
Gains (Losses) on Derivative Instruments Recognized in Other Income (Expense), Net (Detail) - Other Income (Expense), Net - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Foreign Exchange Contracts | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gains (Losses) on Derivatives Not Designated as Hedges | $ (250) | $ 96 | $ (10) | $ 273 |
Other Contracts | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gains (Losses) on Derivatives Not Designated as Hedges | (206) | 6 | (204) | (12) |
Fair Value Hedges | Foreign Exchange Contracts | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Derivatives | 0 | 46 | 0 | 49 |
Hedged items | 0 | (45) | 0 | (50) |
Excluded from effectiveness assessment | 0 | 0 | 0 | 4 |
Fair Value Hedges | Interest Rate Contracts | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Derivatives | 5 | (11) | (38) | (14) |
Hedged items | (8) | 15 | 35 | 22 |
Cash Flow Hedges | Foreign Exchange Contracts | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount reclassified from accumulated other comprehensive income (loss) | $ 103 | $ (14) | $ 44 | $ (29) |
Gains (Losses), Net of Tax, on
Gains (Losses), Net of Tax, on Derivative Instruments Recognized on Consolidated Comprehensive Income Statements (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Cash Flow Hedges | Foreign Exchange Contracts | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Included in effectiveness assessment | $ 49 | $ (11) | $ 9 | $ (21) |
Components of Inventories (Deta
Components of Inventories (Detail) - USD ($) $ in Millions | Dec. 31, 2022 | Jun. 30, 2022 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 1,060 | $ 1,144 |
Work in process | 38 | 82 |
Finished goods | 1,882 | 2,516 |
Total | $ 2,980 | $ 3,742 |
Business Combinations - Additio
Business Combinations - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Billions | Mar. 04, 2022 | Jan. 18, 2022 |
Nuance Communications Inc. | ||
Business Acquisition [Line Items] | ||
Acquisition agreement date | Mar. 04, 2022 | |
Total consideration transferred | $ 18.8 | |
Activision Blizzard, Inc. | ||
Business Acquisition [Line Items] | ||
Acquisition agreement date | Jan. 18, 2022 | |
Acquisition agreement share price | $ 95 | |
Total purchase price to be transferred | $ 68.7 |
Major Classes of Assets and Lia
Major Classes of Assets and Liabilities Allocated Purchase Price (Detail) - USD ($) $ in Millions | Dec. 31, 2022 | Jun. 30, 2022 | Mar. 04, 2022 | |
Business Acquisition [Line Items] | ||||
Goodwill | $ 67,905 | $ 67,524 | ||
Nuance Communications Inc. | ||||
Business Acquisition [Line Items] | ||||
Goodwill | [1] | $ 16,326 | ||
Intangible assets | 4,365 | |||
Other assets | 42 | |||
Other liabilities | [2] | (1,972) | ||
Total | $ 18,761 | |||
[1] Goodwill was assigned to our Intelligent Cloud segment and was primarily attributed to increased synergies that are expected to be achieved from the integration of Nuance. None of the goodwill is expected to be deductible for income tax purposes |
Major Classes of Assets and L_2
Major Classes of Assets and Liabilities Allocated Purchase Price (Parenthetical) (Detail) - USD ($) $ in Millions | Mar. 04, 2022 | Dec. 31, 2022 | Jun. 30, 2022 |
Business Acquisition [Line Items] | |||
Other current liabilities | $ 12,802 | $ 13,067 | |
Nuance Communications Inc. | |||
Business Acquisition [Line Items] | |||
Debt | $ 986 | ||
Redeemed debt | $ 986 |
Acquired Intangible Assets (Det
Acquired Intangible Assets (Detail) - Nuance Communications Inc. $ in Millions | Mar. 04, 2022 USD ($) |
Acquired Finite Lived Intangible Assets [Line Items] | |
Fair value of intangible assets acquired | $ 4,365 |
Weighted Average Life | 7 years |
Customer-related | |
Acquired Finite Lived Intangible Assets [Line Items] | |
Fair value of intangible assets acquired | $ 2,610 |
Weighted Average Life | 9 years |
Technology-based | |
Acquired Finite Lived Intangible Assets [Line Items] | |
Fair value of intangible assets acquired | $ 1,540 |
Weighted Average Life | 5 years |
Marketing-related | |
Acquired Finite Lived Intangible Assets [Line Items] | |
Fair value of intangible assets acquired | $ 215 |
Weighted Average Life | 4 years |
Carrying Amount of Goodwill (De
Carrying Amount of Goodwill (Detail) $ in Millions | 6 Months Ended |
Dec. 31, 2022 USD ($) | |
Goodwill [Line Items] | |
Beginning Balance | $ 67,524 |
Acquisitions | 194 |
Other | 187 |
Ending Balance | 67,905 |
Productivity and Business Processes | |
Goodwill [Line Items] | |
Beginning Balance | 24,811 |
Acquisitions | 11 |
Other | (15) |
Ending Balance | 24,807 |
Intelligent Cloud | |
Goodwill [Line Items] | |
Beginning Balance | 30,182 |
Acquisitions | 183 |
Other | 87 |
Ending Balance | 30,452 |
More Personal Computing | |
Goodwill [Line Items] | |
Beginning Balance | 12,531 |
Acquisitions | 0 |
Other | 115 |
Ending Balance | $ 12,646 |
Finite-Lived Intangible Assets
Finite-Lived Intangible Assets (Detail) - USD ($) $ in Millions | Dec. 31, 2022 | Jun. 30, 2022 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 23,408 | $ 23,577 |
Accumulated Amortization | (13,054) | (12,279) |
Net Carrying Amount | 10,354 | 11,298 |
Technology-based | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 11,093 | 11,277 |
Accumulated Amortization | (7,073) | (6,958) |
Net Carrying Amount | 4,020 | 4,319 |
Customer-related | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 7,352 | 7,342 |
Accumulated Amortization | (3,646) | (3,171) |
Net Carrying Amount | 3,706 | 4,171 |
Marketing-related | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 4,942 | 4,942 |
Accumulated Amortization | (2,324) | (2,143) |
Net Carrying Amount | 2,618 | 2,799 |
Contract-based | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 21 | 16 |
Accumulated Amortization | (11) | (7) |
Net Carrying Amount | $ 10 | $ 9 |
Intangible Assets - Additional
Intangible Assets - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Goodwill And Intangible Assets Disclosure [Abstract] | ||||
Intangible assets amortization expense | $ 632 | $ 446 | $ 1,300 | $ 885 |
Estimated Future Amortization E
Estimated Future Amortization Expense Related to Intangible Assets (Detail) - USD ($) $ in Millions | Dec. 31, 2022 | Jun. 30, 2022 |
Goodwill And Intangible Assets Disclosure [Abstract] | ||
Year Ending June 30, 2023 (excluding the six months ended December 31, 2022) | $ 1,256 | |
Year Ending June 30, 2024 | 2,377 | |
Year Ending June 30, 2025 | 1,826 | |
Year Ending June 30, 2026 | 1,309 | |
Year Ending June 30, 2027 | 874 | |
Thereafter | 2,712 | |
Net Carrying Amount | $ 10,354 | $ 11,298 |
Debt (Detail)
Debt (Detail) - USD ($) $ in Millions | 6 Months Ended | ||
Dec. 31, 2022 | Jun. 30, 2022 | ||
Debt Instrument [Line Items] | |||
Total face value | $ 53,812 | $ 55,511 | |
Unamortized discount and issuance costs | (455) | (471) | |
Hedge fair value adjustments | [1] | (103) | (68) |
Premium on debt exchange | (5,138) | (5,191) | |
Total debt | 48,116 | 49,781 | |
Current portion of long-term debt | (3,997) | (2,749) | |
Long-term debt | $ 44,119 | 47,032 | |
2009 Issuance of $3.8 billion | |||
Debt Instrument [Line Items] | |||
Maturities (calendar year) | 2039 | ||
Stated Interest Rate | 5.20% | ||
Effective Interest Rate | 5.24% | ||
Total face value | $ 520 | 520 | |
2010 Issuance of $4.8 billion | |||
Debt Instrument [Line Items] | |||
Maturities (calendar year) | 2040 | ||
Stated Interest Rate | 4.50% | ||
Effective Interest Rate | 4.57% | ||
Total face value | $ 486 | 486 | |
2011 Issuance of $2.3 billion | |||
Debt Instrument [Line Items] | |||
Maturities (calendar year) | 2041 | ||
Stated Interest Rate | 5.30% | ||
Effective Interest Rate | 5.36% | ||
Total face value | $ 718 | 718 | |
2012 Issuance of $2.3 billion | |||
Debt Instrument [Line Items] | |||
Total face value | $ 454 | 1,204 | |
2012 Issuance of $2.3 billion | Minimum | |||
Debt Instrument [Line Items] | |||
Maturities (calendar year) | 2022 | ||
Stated Interest Rate | 2.13% | ||
Effective Interest Rate | 2.24% | ||
2012 Issuance of $2.3 billion | Maximum | |||
Debt Instrument [Line Items] | |||
Maturities (calendar year) | 2042 | ||
Stated Interest Rate | 3.50% | ||
Effective Interest Rate | 3.57% | ||
2013 Issuance of $5.2 billion | |||
Debt Instrument [Line Items] | |||
Total face value | $ 2,814 | 2,814 | |
2013 Issuance of $5.2 billion | Minimum | |||
Debt Instrument [Line Items] | |||
Maturities (calendar year) | 2023 | ||
Stated Interest Rate | 2.38% | ||
Effective Interest Rate | 2.47% | ||
2013 Issuance of $5.2 billion | Maximum | |||
Debt Instrument [Line Items] | |||
Maturities (calendar year) | 2043 | ||
Stated Interest Rate | 4.88% | ||
Effective Interest Rate | 4.92% | ||
2013 issuance of €4.1 billion | |||
Debt Instrument [Line Items] | |||
Total face value | $ 2,455 | 2,404 | |
2013 issuance of €4.1 billion | Minimum | |||
Debt Instrument [Line Items] | |||
Maturities (calendar year) | 2028 | ||
Stated Interest Rate | 2.63% | ||
Effective Interest Rate | 2.69% | ||
2013 issuance of €4.1 billion | Maximum | |||
Debt Instrument [Line Items] | |||
Maturities (calendar year) | 2033 | ||
Stated Interest Rate | 3.13% | ||
Effective Interest Rate | 3.22% | ||
2015 Issuance of $23.8 billion | |||
Debt Instrument [Line Items] | |||
Total face value | $ 9,805 | 10,805 | |
2015 Issuance of $23.8 billion | Minimum | |||
Debt Instrument [Line Items] | |||
Maturities (calendar year) | 2025 | ||
Stated Interest Rate | 2.70% | ||
Effective Interest Rate | 2.77% | ||
2015 Issuance of $23.8 billion | Maximum | |||
Debt Instrument [Line Items] | |||
Maturities (calendar year) | 2055 | ||
Stated Interest Rate | 4.75% | ||
Effective Interest Rate | 4.78% | ||
2016 Issuance of $19.8 billion | |||
Debt Instrument [Line Items] | |||
Total face value | $ 9,430 | 9,430 | |
2016 Issuance of $19.8 billion | Minimum | |||
Debt Instrument [Line Items] | |||
Maturities (calendar year) | 2023 | ||
Stated Interest Rate | 2% | ||
Effective Interest Rate | 2.10% | ||
2016 Issuance of $19.8 billion | Maximum | |||
Debt Instrument [Line Items] | |||
Maturities (calendar year) | 2056 | ||
Stated Interest Rate | 3.95% | ||
Effective Interest Rate | 4.03% | ||
2017 Issuance of $17.0 billion | |||
Debt Instrument [Line Items] | |||
Total face value | $ 8,945 | 8,945 | |
2017 Issuance of $17.0 billion | Minimum | |||
Debt Instrument [Line Items] | |||
Maturities (calendar year) | 2024 | ||
Stated Interest Rate | 2.88% | ||
Effective Interest Rate | 3.04% | ||
2017 Issuance of $17.0 billion | Maximum | |||
Debt Instrument [Line Items] | |||
Maturities (calendar year) | 2057 | ||
Stated Interest Rate | 4.50% | ||
Effective Interest Rate | 4.53% | ||
2020 Issuance of $10.0 billion | |||
Debt Instrument [Line Items] | |||
Total face value | $ 10,000 | 10,000 | |
2020 Issuance of $10.0 billion | Minimum | |||
Debt Instrument [Line Items] | |||
Maturities (calendar year) | 2050 | ||
Stated Interest Rate | 2.53% | ||
Effective Interest Rate | 2.53% | ||
2020 Issuance of $10.0 billion | Maximum | |||
Debt Instrument [Line Items] | |||
Maturities (calendar year) | 2060 | ||
Stated Interest Rate | 2.68% | ||
Effective Interest Rate | 2.68% | ||
2021 issuance of $8.2 billion | |||
Debt Instrument [Line Items] | |||
Total face value | $ 8,185 | $ 8,185 | |
2021 issuance of $8.2 billion | Minimum | |||
Debt Instrument [Line Items] | |||
Maturities (calendar year) | 2052 | ||
Stated Interest Rate | 2.92% | ||
Effective Interest Rate | 2.92% | ||
2021 issuance of $8.2 billion | Maximum | |||
Debt Instrument [Line Items] | |||
Maturities (calendar year) | 2062 | ||
Stated Interest Rate | 3.04% | ||
Effective Interest Rate | 3.04% | ||
[1]Refer to Note 5 – Derivatives for further information on the interest rate swaps related to fixed-rate debt. |
Debt (Parenthetical) (Detail)
Debt (Parenthetical) (Detail) - 6 months ended Dec. 31, 2022 € in Billions, $ in Billions | USD ($) | EUR (€) |
2009 Issuance of $3.8 billion | ||
Debt Instrument [Line Items] | ||
Debt, issuance date | 2009 | |
Debt, face value | $ 3.8 | |
2010 Issuance of $4.8 billion | ||
Debt Instrument [Line Items] | ||
Debt, issuance date | 2010 | |
Debt, face value | $ 4.8 | |
2011 Issuance of $2.3 billion | ||
Debt Instrument [Line Items] | ||
Debt, issuance date | 2011 | |
Debt, face value | $ 2.3 | |
2012 Issuance of $2.3 billion | ||
Debt Instrument [Line Items] | ||
Debt, issuance date | 2012 | |
Debt, face value | $ 2.3 | |
2013 Issuance of $5.2 billion | ||
Debt Instrument [Line Items] | ||
Debt, issuance date | 2013 | |
Debt, face value | $ 5.2 | |
2013 issuance of €4.1 billion | ||
Debt Instrument [Line Items] | ||
Debt, issuance date | 2013 | |
Debt, face value | € | € 4.1 | |
2015 Issuance of $23.8 billion | ||
Debt Instrument [Line Items] | ||
Debt, issuance date | 2015 | |
Debt, face value | $ 23.8 | |
2016 Issuance of $19.8 billion | ||
Debt Instrument [Line Items] | ||
Debt, issuance date | 2016 | |
Debt, face value | $ 19.8 | |
2017 Issuance of $17.0 billion | ||
Debt Instrument [Line Items] | ||
Debt, issuance date | 2017 | |
Debt, face value | $ 17 | |
2020 Issuance of $10.0 billion | ||
Debt Instrument [Line Items] | ||
Debt, issuance date | 2020 | |
Debt, face value | $ 10 | |
2021 issuance of $8.2 billion | ||
Debt Instrument [Line Items] | ||
Debt, issuance date | 2021 | |
Debt, face value | $ 8.2 |
Debt - Additional Information (
Debt - Additional Information (Detail) - USD ($) $ in Billions | Dec. 31, 2022 | Jun. 30, 2022 |
Debt Disclosure [Abstract] | ||
Long-term debt fair value | $ 46.4 | $ 50.9 |
Maturities of Long-term Debt In
Maturities of Long-term Debt Including Current Portion (Detail) - USD ($) $ in Millions | Dec. 31, 2022 | Jun. 30, 2022 |
Debt Disclosure [Abstract] | ||
Year Ending June 30, 2023 (excluding the six months ended December 31, 2022) | $ 1,000 | |
Year Ending June 30, 2024 | 5,250 | |
Year Ending June 30, 2025 | 2,250 | |
Year Ending June 30, 2026 | 3,000 | |
Year Ending June 30, 2027 | 8,000 | |
Thereafter | 34,312 | |
Total | $ 53,812 | $ 55,511 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||||
Dec. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Jun. 30, 2022 | |
Income Taxes [Line Items] | ||||||
Effective tax rate | 19% | 17% | 19% | 9% | ||
Provision (benefit) for income taxes | $ 3,914 | $ 3,750 | $ 7,930 | $ 3,769 | ||
Long-term income taxes | 24,169 | 24,169 | $ 26,069 | |||
Unrecognized Tax Benefits and Other Income Tax Liabilities | ||||||
Income Taxes [Line Items] | ||||||
Long-term income taxes | $ 17,100 | $ 17,100 | $ 16,300 | |||
Transfer of Intangible Properties | ||||||
Income Taxes [Line Items] | ||||||
Provision (benefit) for income taxes | $ (3,300) |
Income Taxes - Additional Inf_2
Income Taxes - Additional Information Regarding Examinations (Detail) - USD ($) $ in Billions | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2022 | Jun. 30, 2018 | Jun. 30, 2016 | Jun. 30, 2011 | |
Earliest Tax Year | Foreign Country | |||||
Income Tax Examination [Line Items] | |||||
Tax years subject to examination | 1996 | ||||
Latest Tax Year | Foreign Country | |||||
Income Tax Examination [Line Items] | |||||
Tax years subject to examination | 2022 | ||||
Internal Revenue Service (IRS) | |||||
Income Tax Examination [Line Items] | |||||
Settlement payments including tax and interest | $ 1.7 | ||||
Internal Revenue Service (IRS) | Earliest Tax Year | |||||
Income Tax Examination [Line Items] | |||||
Tax years under audit | 2004 | 2010 | 2007 | 2004 | |
Tax years subject to examination | 2004 | ||||
Internal Revenue Service (IRS) | Latest Tax Year | |||||
Income Tax Examination [Line Items] | |||||
Tax years under audit | 2013 | 2013 | 2009 | 2006 | |
Tax years subject to examination | 2017 |
Unearned Revenue by Segment (De
Unearned Revenue by Segment (Detail) - USD ($) $ in Millions | Dec. 31, 2022 | Jun. 30, 2022 |
Contract With Customer Liability [Line Items] | ||
Unearned revenue | $ 39,626 | $ 48,408 |
Productivity and Business Processes | ||
Contract With Customer Liability [Line Items] | ||
Unearned revenue | 20,120 | 24,558 |
Intelligent Cloud | ||
Contract With Customer Liability [Line Items] | ||
Unearned revenue | 15,822 | 19,371 |
More Personal Computing | ||
Contract With Customer Liability [Line Items] | ||
Unearned revenue | $ 3,684 | $ 4,479 |
Changes in Unearned Revenue (De
Changes in Unearned Revenue (Detail) $ in Millions | 6 Months Ended |
Dec. 31, 2022 USD ($) | |
Revenue From Contract With Customer [Abstract] | |
Balance, beginning of period | $ 48,408 |
Deferral of revenue | 48,188 |
Recognition of unearned revenue | (56,970) |
Balance, end of period | $ 39,626 |
Unearned Revenue - Additional I
Unearned Revenue - Additional Information (Detail) $ in Billions | Dec. 31, 2022 USD ($) |
Contract With Customer Liability [Line Items] | |
Revenue allocated to remaining performance obligations | $ 193 |
Commercial Customers | |
Contract With Customer Liability [Line Items] | |
Revenue allocated to remaining performance obligations | $ 189 |
Unearned Revenue - Remaining Pe
Unearned Revenue - Remaining Performance Obligation - Additional Information (Detail) - Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2023-01-01 | Dec. 31, 2022 |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Revenue allocated to remaining performance obligations, percentage of revenue expected to be recognized | 45% |
Revenue allocated to remaining performance obligations, expected timing of satisfaction | 12 months |
Leases - Additional Information
Leases - Additional Information (Detail) $ in Billions | 6 Months Ended |
Dec. 31, 2022 USD ($) | |
Operating Lease | |
Leases [Line Items] | |
Additional leases, primarily for datacenters, that have not yet commenced | $ 6.3 |
Finance Lease | |
Leases [Line Items] | |
Additional leases, primarily for datacenters, that have not yet commenced | $ 19.7 |
Minimum | |
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 |
Maximum | |
Leases [Line Items] | |
Operating and Finance leases, remaining lease terms | 19 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 | 18 years |
Additional finance leases that have not yet commenced, lease terms | 18 years |
Components of Lease Expense (De
Components of Lease Expense (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Leases [Abstract] | ||||
Operating lease cost | $ 684 | $ 469 | $ 1,346 | $ 1,057 |
Finance lease cost: | ||||
Amortization of right-of-use assets | 457 | 264 | 646 | 490 |
Interest on lease liabilities | 119 | 107 | 232 | 211 |
Total finance lease cost | $ 576 | $ 371 | $ 878 | $ 701 |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information Related to Leases (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Cash paid for amounts included in the measurement of lease liabilities: | ||||
Operating cash flows from operating leases | $ 645 | $ 441 | $ 1,299 | $ 1,007 |
Operating cash flows from finance leases | 119 | 107 | 232 | 211 |
Financing cash flows from finance leases | 262 | 222 | 518 | 422 |
Right-of-use assets obtained in exchange for lease obligations: | ||||
Operating leases | 525 | 1,559 | 1,714 | 2,730 |
Finance leases | $ 598 | $ 985 | $ 1,209 | $ 2,374 |
Supplemental Balance Sheet Info
Supplemental Balance Sheet Information Related to Leases (Detail) - USD ($) $ in Millions | Dec. 31, 2022 | Jun. 30, 2022 |
Operating Leases | ||
Operating lease right-of-use assets | $ 13,624 | $ 13,148 |
Total operating lease liabilities | 14,285 | 13,717 |
Finance Leases | ||
Accumulated depreciation | (63,459) | (59,660) |
Property and equipment, net | 82,755 | 74,398 |
Total finance lease liabilities | $ 15,584 | $ 14,902 |
Weighted Average Remaining Lease Term | ||
Operating leases | 8 years | 8 years |
Finance leases | 11 years | 12 years |
Weighted Average Discount Rate | ||
Operating leases | 2.50% | 2.10% |
Finance leases | 3.20% | 3.10% |
Finance Lease | ||
Finance Leases | ||
Property and equipment, at cost | $ 18,514 | $ 17,388 |
Accumulated depreciation | (3,920) | (3,285) |
Property and equipment, net | 14,594 | 14,103 |
Other Current Liabilities | ||
Operating Leases | ||
Total operating lease liabilities | 2,287 | 2,228 |
Finance Leases | ||
Total finance lease liabilities | 1,105 | 1,060 |
Operating Lease Liabilities | ||
Operating Leases | ||
Total operating lease liabilities | 11,998 | 11,489 |
Other Long-term Liabilities | ||
Finance Leases | ||
Total finance lease liabilities | $ 14,479 | $ 13,842 |
Maturities of Lease Liabilities
Maturities of Lease Liabilities (Detail) - USD ($) $ in Millions | Dec. 31, 2022 | Jun. 30, 2022 |
Leases [Abstract] | ||
Operating Leases, Year Ending June 30, 2023 (excluding the six months ended December 31, 2022) | $ 1,320 | |
Operating Leases, Year Ending June 30, 2024 | 2,498 | |
Operating Leases, Year Ending June 30, 2025 | 2,217 | |
Operating Leases, Year Ending June 30, 2026 | 1,847 | |
Operating Leases, Year Ending June 30, 2027 | 1,533 | |
Operating Leases, Thereafter | 6,528 | |
Operating Leases, Total lease payments | 15,943 | |
Operating Leases, Less imputed interest | (1,658) | |
Operating Leases | 14,285 | $ 13,717 |
Finance Leases, Year Ending June 30, 2023 (excluding the six months ended December 31, 2022) | 790 | |
Finance Leases, Year Ending June 30, 2024 | 1,598 | |
Finance Leases, Year Ending June 30, 2025 | 1,912 | |
Finance Leases, Year Ending June 30, 2026 | 1,595 | |
Finance Leases, Year Ending June 30, 2027 | 1,603 | |
Finance Leases, Thereafter | 11,196 | |
Finance Leases, Total lease payments | 18,694 | |
Finance Leases, Less imputed interest | (3,110) | |
Finance Leases | $ 15,584 | $ 14,902 |
Contingencies - Additional Info
Contingencies - Additional Information (Detail) $ in Millions | Dec. 31, 2022 USD ($) |
Commitments And Contingencies Disclosure [Abstract] | |
Accrual for disclosed loss contingencies, current, ending balance | $ 181 |
Amount not accrued for estimated maximum losses for disclosed loss contingencies | $ 500 |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Detail) - USD ($) | 3 Months Ended | 6 Months Ended | ||||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Sep. 14, 2021 | Sep. 18, 2019 | |
Share Repurchases [Line Items] | ||||||
Amount of shares repurchased to settle employee tax withholding related to vesting of stock awards | $ 859,000,000 | $ 1,200,000,000 | $ 1,800,000,000 | $ 2,700,000,000 | ||
Share Repurchase Program 2019 | ||||||
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 2021 | ||||||
Share Repurchases [Line Items] | ||||||
Amount available for repurchase under the share repurchase program approved by the company's Board of Directors | $ 60,000,000,000 | |||||
Unused amount of share repurchase program | $ 31,500,000,000 | $ 31,500,000,000 |
Share Repurchases (Detail)
Share Repurchases (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||||
Dec. 31, 2022 | Sep. 30, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Share Repurchase Program 2021 | ||||||
Share Repurchases [Line Items] | ||||||
Shares of common stock repurchased | 20,000,000 | 17,000,000 | 37,000,000 | |||
Value of common stock repurchased | $ 4,600 | $ 4,600 | $ 9,200 | |||
Share Repurchase Program 2019 | ||||||
Share Repurchases [Line Items] | ||||||
Shares of common stock repurchased | 21,000,000 | |||||
Value of common stock repurchased | $ 6,200 | |||||
Share Repurchase Program 2019 and 2021 | ||||||
Share Repurchases [Line Items] | ||||||
Shares of common stock repurchased | 20,000,000 | 41,000,000 | ||||
Value of common stock repurchased | $ 6,233 | $ 12,433 |
Dividends Declared (Detail)
Dividends Declared (Detail) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 6 Months Ended | ||||
Dec. 31, 2022 | Sep. 30, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Equity [Abstract] | ||||||
Declaration Date | Nov. 29, 2022 | Sep. 20, 2022 | Dec. 07, 2021 | Sep. 14, 2021 | ||
Record Date | Feb. 16, 2023 | Nov. 17, 2022 | Feb. 17, 2022 | Nov. 18, 2021 | ||
Payment Date | Mar. 09, 2023 | Dec. 08, 2022 | Mar. 10, 2022 | Dec. 09, 2021 | ||
Dividend Per Share | $ 0.68 | $ 0.68 | $ 0.62 | $ 0.62 | $ 1.36 | $ 1.24 |
Amount | $ 5,064 | $ 5,066 | $ 4,645 | $ 4,652 | $ 10,130 | $ 9,297 |
Summary of Changes in Accumulat
Summary of Changes in Accumulated Other Comprehensive Income (Loss) by Component (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Balance, beginning of period | $ 166,542 | |||
Other comprehensive income (loss) | $ 886 | $ (846) | (1,779) | $ (1,385) |
Balance, end of period | 183,136 | 160,010 | 183,136 | 160,010 |
Derivatives | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Balance, beginning of period | (6) | (17) | (13) | (19) |
Unrealized gains (losses), net of tax | 49 | (11) | 9 | (21) |
Tax expense (benefit) included in provision for income taxes | 22 | (3) | 10 | (6) |
Amounts reclassified from accumulated other comprehensive income (loss) | (81) | 11 | (34) | 23 |
Other comprehensive income (loss) | (32) | 0 | (25) | 2 |
Balance, end of period | (38) | (17) | (38) | (17) |
Derivatives | Other Income (Expense), Net | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Reclassification adjustments for (gains) losses included in other income (expense), net | (103) | 14 | (44) | 29 |
Investments | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Balance, beginning of period | (4,035) | 2,800 | (2,138) | 3,222 |
Unrealized gains (losses), net of tax | 340 | (742) | (1,585) | (1,157) |
Tax expense (benefit) included in provision for income taxes | (2) | 0 | (9) | 2 |
Amounts reclassified from accumulated other comprehensive income (loss) | 8 | (1) | 36 | (8) |
Other comprehensive income (loss) | 348 | (743) | (1,549) | (1,165) |
Balance, end of period | (3,687) | 2,057 | (3,687) | 2,057 |
Investments | Other Income (Expense), Net | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Reclassification adjustments for (gains) losses included in other income (expense), net | 10 | (1) | 45 | (10) |
Translation adjustments and other | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Balance, beginning of period | (3,302) | (1,500) | (2,527) | (1,381) |
Other comprehensive income (loss) | 570 | (103) | (205) | (222) |
Balance, end of period | (2,732) | (1,603) | (2,732) | (1,603) |
Accumulated other comprehensive income (loss) | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Balance, beginning of period | (7,343) | 1,283 | (4,678) | 1,822 |
Other comprehensive income (loss) | 886 | (846) | (1,779) | (1,385) |
Balance, end of period | $ (6,457) | $ 437 | $ (6,457) | $ 437 |
Summary of Changes in Accumul_2
Summary of Changes in Accumulated Other Comprehensive Income (Loss) by Component (Parenthetical) (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Derivatives | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Unrealized gains (losses), tax | $ 13 | $ (3) | $ 2 | $ (6) |
Net change related to other comprehensive income (loss), tax | (9) | 0 | (8) | 0 |
Investments | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Unrealized gains (losses), tax | 89 | (197) | (421) | (307) |
Net change related to other comprehensive income (loss), tax | 91 | (197) | (412) | (309) |
Translation adjustments and other | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Net change related to other comprehensive income (loss), tax | $ 0 | $ 0 | $ 0 | $ 0 |
Segment Revenue (Detail)
Segment Revenue (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Segment Reporting Information [Line Items] | ||||
Revenue | $ 52,747 | $ 51,728 | $ 102,869 | $ 97,045 |
Productivity and Business Processes | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 17,002 | 15,936 | 33,467 | 30,975 |
Intelligent Cloud | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 21,508 | 18,262 | 41,833 | 35,174 |
More Personal Computing | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | $ 14,237 | $ 17,530 | $ 27,569 | $ 30,896 |
Operating Income (Loss) by Segm
Operating Income (Loss) by Segment (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Segment Reporting Information [Line Items] | ||||
Operating Income (Loss) | $ 20,399 | $ 22,247 | $ 41,917 | $ 42,485 |
Productivity and Business Processes | ||||
Segment Reporting Information [Line Items] | ||||
Operating Income (Loss) | 8,175 | 7,688 | 16,498 | 15,269 |
Intelligent Cloud | ||||
Segment Reporting Information [Line Items] | ||||
Operating Income (Loss) | 8,904 | 8,323 | 17,882 | 16,004 |
More Personal Computing | ||||
Segment Reporting Information [Line Items] | ||||
Operating Income (Loss) | $ 3,320 | $ 6,236 | $ 7,537 | $ 11,212 |
Segment Information and Geogr_3
Segment Information and Geographic Data - Additional Information (Detail) | 6 Months Ended |
Dec. 31, 2022 | |
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 six months ended December 31, 2022 or 2021. |
Revenue Classified by Major Geo
Revenue Classified by Major Geographic Areas (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | ||
Revenues From External Customers And Long Lived Assets [Line Items] | |||||
Revenue | $ 52,747 | $ 51,728 | $ 102,869 | $ 97,045 | |
United States | |||||
Revenues From External Customers And Long Lived Assets [Line Items] | |||||
Revenue | [1] | 26,976 | 26,463 | 52,843 | 49,293 |
Other Countries | |||||
Revenues From External Customers And Long Lived Assets [Line Items] | |||||
Revenue | $ 25,771 | $ 25,265 | $ 50,026 | $ 47,752 | |
[1] Includes billings to OEMs 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 | 6 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Revenue from External Customer [Line Items] | ||||
Revenue | $ 52,747 | $ 51,728 | $ 102,869 | $ 97,045 |
Server Products and Cloud Services | ||||
Revenue from External Customer [Line Items] | ||||
Revenue | 19,594 | 16,382 | 37,982 | 31,452 |
Office Products and Cloud Services | ||||
Revenue from External Customer [Line Items] | ||||
Revenue | 11,837 | 11,251 | 23,385 | 22,059 |
Windows | ||||
Revenue from External Customer [Line Items] | ||||
Revenue | 4,808 | 6,594 | 10,121 | 12,268 |
Revenue from External Customer [Line Items] | ||||
Revenue | 3,876 | 3,531 | 7,539 | 6,667 |
Gaming | ||||
Revenue from External Customer [Line Items] | ||||
Revenue | 4,758 | 5,442 | 8,368 | 9,035 |
Search and News Advertising | ||||
Revenue from External Customer [Line Items] | ||||
Revenue | 3,223 | 3,064 | 6,151 | 5,720 |
Enterprise Services | ||||
Revenue from External Customer [Line Items] | ||||
Revenue | 1,862 | 1,823 | 3,738 | 3,614 |
Devices | ||||
Revenue from External Customer [Line Items] | ||||
Revenue | 1,430 | 2,357 | 2,878 | 3,771 |
Other | ||||
Revenue from External Customer [Line Items] | ||||
Revenue | $ 1,359 | $ 1,284 | $ 2,707 | $ 2,459 |
Revenue Classified by Signifi_2
Revenue Classified by Significant Product and Service Offerings (Parenthetical) (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Revenue from External Customer [Line Items] | ||||
Revenue | $ 52,747 | $ 51,728 | $ 102,869 | $ 97,045 |
Microsoft Cloud | ||||
Revenue from External Customer [Line Items] | ||||
Revenue | $ 27,100 | $ 22,200 | $ 52,800 | $ 42,900 |