Document and Entity Information - shares	6 Months Ended
Document and Entity Information - shares	Dec. 31, 2016	Jan. 20, 2017
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Dec. 31, 2016
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	Q2
Trading Symbol	MSFT
Entity Registrant Name	MICROSOFT CORPORATION
Entity Central Index Key	0000789019
Current Fiscal Year End Date	--06-30
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		7,727,529,820

INCOME STATEMENTS - USD ($) shares in Millions, $ in Millions	3 Months Ended		6 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2016	Dec. 31, 2015
Revenue
Product	$ 16,537	$ 17,974	$ 30,030	$ 33,193
Service and other	7,553	5,822	14,513	10,982
Total revenue	24,090	23,796	44,543	44,175
Cost of revenue
Product	5,378	6,268	8,959	10,303
Service and other	4,523	3,604	8,786	6,776
Total cost of revenue	9,901	9,872	17,745	17,079
Gross margin	14,189	13,924	26,798	27,096
Research and development	3,062	2,900	6,168	5,862
Sales and marketing	4,071	3,960	7,304	7,293
General and administrative	879	1,038	1,924	2,122
Operating income	6,177	6,026	11,402	11,819
Other income (expense), net	186	(171)	286	(451)
Income before income taxes	6,363	5,855	11,688	11,368
Provision for income taxes	1,163	837	1,798	1,448
Net income	$ 5,200	$ 5,018	$ 9,890	$ 9,920
Earnings per share:
Basic	$ 0.67	$ 0.63	$ 1.27	$ 1.24
Diluted	$ 0.66	$ 0.62	$ 1.26	$ 1.23
Weighted average shares outstanding:
Basic	7,755	7,964	7,772	7,980
Diluted	7,830	8,051	7,853	8,068
Cash dividends declared per common share	$ 0.39	$ 0.36	$ 0.78	$ 0.72

COMPREHENSIVE INCOME STATEMENTS - USD ($) $ in Millions	3 Months Ended		6 Months Ended
COMPREHENSIVE INCOME STATEMENTS - USD ($) $ in Millions	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2016	Dec. 31, 2015
Net income	$ 5,200	$ 5,018	$ 9,890	$ 9,920
Other comprehensive income (loss):
Net unrealized gains (losses) on derivatives (net of tax effects of $0, $5, $(2), and $28)	280	(49)	243	8
Net unrealized gains (losses) on investments (net of tax effects of $(535), $86, $(491), and $(222))	(994)	160	(911)	(411)
Translation adjustments and other (net of tax effects of $0, $(9), $7, and $(21))	(455)	(76)	(357)	(346)
Other comprehensive income (loss)	(1,169)	35	(1,025)	(749)
Comprehensive income	$ 4,031	$ 5,053	$ 8,865	$ 9,171

COMPREHENSIVE INCOME STATEMENTS (Parenthetical) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2016	Dec. 31, 2015
Net unrealized gains (losses) on derivatives, tax effects	$ 0	$ 5	$ (2)	$ 28
Net unrealized gains (losses) on investments, tax effects	(535)	86	(491)	(222)
Translation adjustments and other, tax effects	$ 0	$ (9)	$ 7	$ (21)

BALANCE SHEETS - USD ($) $ in Millions	Dec. 31, 2016	Jun. 30, 2016
Current assets:
Cash and cash equivalents	$ 8,468	$ 6,510
Short-term investments (including securities loaned of $1,230 and $204)	114,313	106,730
Total cash, cash equivalents, and short-term investments	122,781	113,240
Accounts receivable, net of allowance for doubtful accounts of $340 and $426	14,343	18,277
Inventories	1,961	2,251
Other	5,864	5,892
Total current assets	144,949	139,660
Property and equipment, net of accumulated depreciation of $21,888 and $19,800	21,379	18,356
Equity and other investments	8,912	10,431
Goodwill	34,524	17,872
Intangible assets, net	11,001	3,733
Other long-term assets	3,845	3,416
Total assets	224,610	193,468
Current liabilities:
Accounts payable	6,580	6,898
Short-term debt	25,065	12,904
Current portion of long-term debt	599	0
Accrued compensation	3,982	5,264
Income taxes	508	580
Short-term unearned revenue	26,085	27,468
Securities lending payable	1,280	294
Other	6,688	5,949
Total current liabilities	70,787	59,357
Long-term debt	59,306	40,557
Long-term unearned revenue	8,595	6,441
Deferred income taxes	1,133	1,476
Other long-term liabilities	15,980	13,640
Total liabilities	155,801	121,471
Commitments and contingencies
Stockholders' equity:
Common stock and paid-in capital—shares authorized 24,000; outstanding 7,730 and 7,808	68,177	68,178
Retained earnings	120	2,282
Accumulated other comprehensive income	512	1,537
Total stockholders' equity	68,809	71,997
Total liabilities and stockholders' equity	$ 224,610	$ 193,468

BALANCE SHEETS (Parenthetical) - USD ($) $ in Millions	Dec. 31, 2016	Jun. 30, 2016
Short-term investments, securities loaned	$ 1,230	$ 204
Accounts receivable, allowance for doubtful accounts	340	426
Property and equipment, accumulated depreciation	$ 21,888	$ 19,800
Common stock, shares authorized	24,000,000,000	24,000,000,000
Common stock, outstanding	7,730,000,000	7,808,000,000

CASH FLOWS STATEMENTS - USD ($) $ in Millions	3 Months Ended		6 Months Ended
CASH FLOWS STATEMENTS - USD ($) $ in Millions	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2016	Dec. 31, 2015
Operations
Net income	$ 5,200	$ 5,018	$ 9,890	$ 9,920
Adjustments to reconcile net income to net cash from operations:
Depreciation, amortization, and other	2,166	1,544	3,982	3,005
Stock-based compensation expense	767	658	1,470	1,332
Net recognized losses (gains) on investments and derivatives	(652)	50	(963)	151
Deferred income taxes	(587)	(247)	(572)	(174)
Deferral of unearned revenue	14,141	12,570	26,724	22,993
Recognition of unearned revenue	(13,645)	(11,929)	(26,549)	(23,284)
Changes in operating assets and liabilities:
Accounts receivable	(2,711)	(3,118)	4,463	3,258
Inventories	1,132	1,104	265	167
Other current assets	1,309	(932)	343	(1,494)
Other long-term assets	(243)	56	(272)	51
Accounts payable	99	369	(344)	234
Other current liabilities	(1,529)	105	(1,890)	(1,919)
Other long-term liabilities	846	370	1,295	254
Net cash from operations	6,293	5,618	17,842	14,494
Financing
Repayments of short-term debt, maturities of 90 days or less, net	(3,755)	(7,031)	(7,145)	(2,141)
Proceeds from issuance of debt	17,069	13,128	42,046	13,249
Repayments of debt	(4,118)	(121)	(4,343)	(1,871)
Common stock issued	131	117	372	336
Common stock repurchased	(3,599)	(3,678)	(7,961)	(8,435)
Common stock cash dividends paid	(3,024)	(2,868)	(5,824)	(5,343)
Other	312	(65)	200	(243)
Net cash from (used in) financing	3,016	(518)	17,345	(4,448)
Investing
Additions to property and equipment	(1,988)	(2,024)	(4,151)	(3,380)
Acquisition of companies, net of cash acquired, and purchases of intangible and other assets	(24,760)	(381)	(24,784)	(771)
Purchases of investments	(46,775)	(34,750)	(103,956)	(72,320)
Maturities of investments	8,715	5,351	17,374	11,037
Sales of investments	48,987	28,191	81,310	56,693
Securities lending payable	1,070	285	986	347
Net cash used in investing	(14,751)	(3,328)	(33,221)	(8,394)
Effect of foreign exchange rates on cash and cash equivalents	(18)	(18)	(8)	(62)
Net change in cash and cash equivalents	(5,460)	1,754	1,958	1,590
Cash and cash equivalents, beginning of period	13,928	5,431	6,510	5,595
Cash and cash equivalents, end of period	$ 8,468	$ 7,185	$ 8,468	$ 7,185

STOCKHOLDERS' EQUITY STATEMENTS - USD ($) $ in Millions	Total	Common stock and paid-in capital	Retained earnings	Accumulated other comprehensive income
Balance, beginning of period at Jun. 30, 2015		$ 68,465	$ 9,096	$ 2,522
Common stock cash dividends	$ (2,868)
Balance, end of period at Sep. 30, 2015		67,811	7,896	1,738
Balance, beginning of period at Jun. 30, 2015		68,465	9,096	2,522
Common stock issued		336
Net income	9,920		9,920
Other comprehensive income (loss)	(749)			(749)
Common stock cash dividends			(5,708)
Common stock repurchased		(2,157)	(6,278)
Stock-based compensation expense		1,332
Other, net		1
Balance, end of period at Dec. 31, 2015	76,780	67,977	7,030	1,773
Balance, beginning of period at Sep. 30, 2015		67,811	7,896	1,738
Common stock issued		117
Net income	5,018		5,018
Other comprehensive income (loss)	35			35
Common stock cash dividends	(2,842)		(2,846)
Common stock repurchased		(609)	(3,038)
Stock-based compensation expense		658
Other, net		0
Balance, end of period at Dec. 31, 2015	76,780	67,977	7,030	1,773
Balance, beginning of period at Jun. 30, 2016	71,997	68,178	2,282	1,537
Common stock cash dividends	(3,024)
Balance, end of period at Sep. 30, 2016		67,747	944	1,681
Balance, beginning of period at Jun. 30, 2016	71,997	68,178	2,282	1,537
Common stock issued		372
Net income	9,890		9,890
Other comprehensive income (loss)	(1,025)			(1,025)
Common stock cash dividends			(6,028)
Common stock repurchased		(1,935)	(6,024)
Stock-based compensation expense		1,470
Other, net		92
Balance, end of period at Dec. 31, 2016	68,809	68,177	120	512
Balance, beginning of period at Sep. 30, 2016		67,747	944	1,681
Common stock issued		131
Net income	5,200		5,200
Other comprehensive income (loss)	(1,169)			(1,169)
Common stock cash dividends	(3,014)		(3,003)
Common stock repurchased		(561)	(3,021)
Stock-based compensation expense		767
Other, net		93
Balance, end of period at Dec. 31, 2016	$ 68,809	$ 68,177	$ 120	$ 512

ACCOUNTING POLICIES

6 Months Ended

Dec. 31, 2016

ACCOUNTING POLICIES

NOTE 1 — ACCOUNTING POLICIES

Accounting Principles

We prepare our unaudited interim consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“U.S. 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 2016 Form 10-K filed with the U.S. Securities and Exchange Commission on July 28, 2016.

We have recast certain prior period amounts to conform to the current period presentation, with no impact on consolidated net income or cash flows.

Principles of Consolidation

The consolidated financial statements include the accounts of Microsoft Corporation and its subsidiaries. Intercompany transactions and balances have been eliminated. Equity investments through which we are able to exercise significant influence over but do not control the investee and are not the primary beneficiary of the investee’s activities are accounted for using the equity method. Investments through which we are not able to exercise significant influence over the investee and which do not have readily determinable fair values are accounted for under the cost method.

Estimates and Assumptions

Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. Examples of estimates include: 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; allowances for product returns; the market value of and volume of demand for our inventory; and stock-based compensation forfeiture rates. Examples of assumptions include: the elements comprising a software arrangement, including the distinction between upgrades or enhancements and new products; when technological feasibility is achieved for our products; the potential outcome of future tax consequences of events that have been recognized on our consolidated financial statements or tax returns; and determining when investment impairments are other-than-temporary. Actual results and outcomes may differ from management’s estimates and assumptions.

Product Revenue and Service and Other Revenue

Product revenue includes sales from operating systems; cross-device productivity applications; server applications; business solution applications; desktop and server management tools; software development tools; video games; hardware such as PCs, tablets, gaming and entertainment consoles, phones, other intelligent devices, and related accessories; and training and certification of computer system integrators and developers.

Service and other revenue includes sales from cloud-based solutions that provide customers with software, services, platforms, and content such as Office 365, Microsoft Azure (“Azure”), Microsoft Dynamics 365 (“Dynamics 365”), and Xbox Live; solution support; and consulting services. Service and other revenue also includes sales from online advertising and LinkedIn.

Recent Accounting Guidance Not Yet Adopted

Financial Instruments – Credit Losses

In June 2016, the Financial Accounting Standards Board (“FASB”) issued a new standard to replace the incurred loss impairment methodology in current U.S. GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. For trade and other receivables, loans, and other financial instruments, we will be required to use a forward-looking expected loss model rather than the incurred loss model for recognizing credit losses which reflects losses that are probable. Credit losses relating to available-for-sale debt securities will also be recorded through an allowance for credit losses rather than as a reduction in the amortized cost basis of the securities. The new standard will be effective for us beginning July 1, 2020, with early adoption permitted beginning July 1, 2019. Application of the amendments is through a cumulative-effect adjustment to retained earnings as of the effective date. We are currently evaluating the impact of this standard on our consolidated financial statements.

Leases

In February 2016, the FASB issued a new standard related to leases to increase transparency and comparability among organizations by requiring the recognition of lease assets and lease liabilities on the balance sheet. Most prominent among the amendments is the recognition of assets and liabilities by lessees for those leases classified as operating leases under previous U.S. GAAP. Under the new standard, disclosures are required to meet the objective of enabling users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases. We will be required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach.

The new standard will be effective for us beginning July 1, 2019, with early adoption permitted. We currently anticipate early adoption of the new standard effective July 1, 2017 in conjunction with our adoption of the new revenue standard. Our ability to early adopt is dependent on system readiness, including software procured from third-party providers, and the completion of our analysis of information necessary to restate prior period financial statements. We remain on schedule and have implemented specific system functionality to enable the accounting transition.

We anticipate this standard will have a material impact on our consolidated balance sheets. However, we do not believe adoption will have a material impact on our consolidated income statements. Due to the recent acquisition of LinkedIn Corporation (“LinkedIn”), we are still assessing the qualitative and quantitative impacts of the leases assumed on our consolidated balance sheets. While we are continuing to assess all potential impacts of the standard, we currently believe the most significant impact relates to our accounting for office space, retail space, and datacenter operating leases. We expect our accounting for capital leases related to office space and datacenters will remain substantially unchanged under the new standard.

Financial Instruments – Recognition, Measurement, Presentation, and Disclosure

In January 2016, the FASB issued a new standard to amend certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. Most prominent among the amendments is the requirement for changes in the fair value of our equity investments, with certain exceptions, to be recognized through net income rather than other comprehensive income (“OCI”). The new standard will be effective for us beginning July 1, 2018. The application of the amendments will result in a cumulative-effect adjustment to our consolidated balance sheets as of the effective date. We are currently evaluating the impact of this standard on our consolidated financial statements.

Revenue from Contracts with Customers

In May 2014, the FASB issued a new standard related to revenue recognition. Under the new standard, revenue is recognized when a customer obtains control of promised goods or services and is recognized in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The FASB recently issued several amendments to the standard, including clarifications on disclosure of prior-period performance obligations and remaining performance obligations.

The guidance permits two methods of adoption: retrospectively to each prior reporting period presented (full retrospective method), or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application (the cumulative catch-up transition method). We currently anticipate adopting the standard using the full retrospective method to restate each prior reporting period presented.

The new standard will be effective for us beginning July 1, 2018, and adoption as of the original effective date of July 1, 2017 is permitted. We currently anticipate early adoption of the new standard effective July 1, 2017. While our ability to early adopt using the full retrospective method is dependent on system readiness, including software procured from third-party providers, and the completion of our analysis of information necessary to restate prior period financial statements, we remain on schedule and have implemented key system functionality to enable restated financial information. Our progress includes nearing completion of retrospectively adjusted financial information for fiscal year 2016.

We anticipate this standard will have a material impact on our consolidated financial statements, and continue to make progress in assessing all potential impacts of the standard, including any impacts from recently issued amendments. We have reached conclusions on all key accounting assessments related to the new standard. However, we are still assessing impacts from guidance issued by the FASB Transition Resource Group as part of their November 2016 meeting. We will continue to monitor and assess the impact of changes to the standard and interpretations as they become available. We have also started our assessment to determine the revenue recognition impact of our recent acquisition of LinkedIn. The most significant impact of the standard relates to our accounting for software license revenue. Specifically, under the new standard we expect to recognize Windows 10 revenue predominantly at the time of billing rather than ratably over the life of the related device. We expect to recognize license revenue at the time of contract execution rather than over the subscription period from certain multi-year commercial software subscriptions that include both software licenses and Software Assurance. Due to the complexity of certain of our commercial license subscription contracts, the actual revenue recognition treatment required under the standard will be dependent on contract-specific terms, and may vary in some instances from recognition at the time of billing. We expect revenue recognition related to our hardware, cloud offerings including Office 365, and professional services to remain substantially unchanged.

We continue to believe that the net change in Windows 10 revenue from period to period is indicative of the net change in revenue we expect from the adoption of the new standard.

EARNINGS PER SHARE

6 Months Ended

Dec. 31, 2016

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,


	2016		2015		2016		2015

Net income available for common shareholders (A)	$	5,200	$	5,018	$	9,890	$	9,920


Weighted average outstanding shares of common stock (B)		7,755		7,964		7,772		7,980
Dilutive effect of stock-based awards		75		87		81		88


Common stock and common stock equivalents (C)		7,830		8,051		7,853		8,068


Earnings Per Share

Basic (A/B)	$	0.67	$	0.63	$	1.27	$	1.24
Diluted (A/C)	$	0.66	$	0.62	$	1.26	$	1.23

Anti-dilutive stock-based awards excluded from the calculations of diluted EPS were immaterial during the periods presented.

OTHER INCOME (EXPENSE), NET

6 Months Ended

Dec. 31, 2016

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,


	2016			2015			2016			2015

Dividends and interest income	$	311		$	200		$	604		$	399
Interest expense		(521	)		(309	)		(958	)		(558	)
Net recognized gains on investments		698			106			1,103			108
Net losses on derivatives		(46	)		(156	)		(140	)		(259	)
Net gains (losses) on foreign currency remeasurements		(82	)		2			(134	)		(34	)
Other		(174	)		(14	)		(189	)		(107	)


Total	$	186		$	(171	)	$	286		$	(451	)

Following are details of net recognized gains (losses) on investments during the periods reported:

(In millions)	Three Months Ended December 31,						Six Months Ended December 31,


	2016			2015			2016			2015

Other-than-temporary impairments of investments	$	(21	)	$	(127	)	$	(39	)	$	(162	)
Realized gains from sales of available-for-sale securities		851			351			1,334			458
Realized losses from sales of available-for-sale securities		(132	)		(118	)		(192	)		(188	)


Total	$	698		$	106		$	1,103		$	108

INVESTMENTS

6 Months Ended

Dec. 31, 2016

INVESTMENTS

NOTE 4 — INVESTMENTS

Investment Components

The components of investments, including associated derivatives, but excluding held-to-maturity investments, were as follows:

(In millions)	Cost Basis		Unrealized Gains		Unrealized Losses			Recorded Basis		Cash and Cash Equivalents		Short-term Investments			Equity and Other Investments


December 31, 2016

Cash	$	4,037	$	0	$	0		$	4,037	$	4,037	$	0		$	0
Mutual funds		2,363		0		0			2,363		1,961		402			0
Commercial paper		177		0		0			177		77		100			0
Certificates of deposit		1,284		0		0			1,284		1,098		186			0
U.S. government and agency securities		100,128		27		(415	)		99,740		1,052		98,688			0
Foreign government bonds		4,747		3		(29	)		4,721		243		4,478			0
Mortgage- and asset-backed securities		4,361		12		(7	)		4,366		0		4,366			0
Corporate notes and bonds		5,736		64		(26	)		5,774		0		5,774			0
Municipal securities		283		39		0			322		0		322			0
Common and preferred stock		4,864		3,685		(160	)		8,389		0		0			8,389
Other investments		494		0		0			494		0		(3	)		497


Total	$	128,474	$	3,830	$	(637	)	$	131,667	$	8,468	$	114,313		$	8,886

(In millions)	Cost Basis		Unrealized Gains		Unrealized Losses			Recorded Basis		Cash and Cash Equivalents		Short-term Investments			Equity and Other Investments


June 30, 2016

Cash	$	3,501	$	0	$	0		$	3,501	$	3,501	$	0		$	0
Mutual funds		1,012		0		0			1,012		1,012		0			0
Commercial paper		298		0		0			298		298		0			0
Certificates of deposit		1,000		0		0			1,000		868		132			0
U.S. government and agency securities		89,970		245		(11	)		90,204		100		90,104			0
Foreign government bonds		5,502		10		(18	)		5,494		731		4,763			0
Mortgage- and asset-backed securities		4,789		21		(2	)		4,808		0		4,808			0
Corporate notes and bonds		6,509		110		(35	)		6,584		0		6,584			0
Municipal securities		285		57		0			342		0		342			0
Common and preferred stock		5,597		4,452		(236	)		9,813		0		0			9,813
Other investments		590		0		0			590		0		(3	)		593


Total	$	119,053	$	4,895	$	(302	)	$	123,646	$	6,510	$	106,730		$	10,406

As of December 31, 2016 and June 30, 2016, the recorded bases of common and preferred stock that are restricted for more than one year or are not publicly traded were $815 million and $767 million, respectively. These investments are carried at cost and are reviewed quarterly for indicators of other-than-temporary impairment. It is not practicable for us to reliably estimate the fair value of these investments.

We lend certain fixed-income and equity securities to increase investment returns. These transactions are accounted for as secured borrowings and the loaned securities continue to be carried as investments on our consolidated balance sheets. Cash and/or security interests are received as collateral for the loaned securities with the amount determined based upon the underlying security lent and the creditworthiness of the borrower. As of December 31, 2016 and June 30, 2016, the collateral received under agreements for loaned securities totaled $1.3 billion and $294 million, which is primarily comprised of U.S. government and agency securities.

Unrealized Losses on Investments

Investments with continuous unrealized losses for less than 12 months and 12 months or greater and their related fair values were as follows:

	Less than 12 Months					12 Months or Greater							Total Unrealized Losses


(In millions)	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Total Fair Value


December 31, 2016

U.S. government and agency securities	$	86,391	$	(403	)	$	375	$	(12	)	$	86,766	$	(415	)
Foreign government bonds		3,721		(10	)		35		(19	)		3,756		(29	)
Mortgage- and asset-backed securities		887		(6	)		199		(1	)		1,086		(7	)
Corporate notes and bonds		1,100		(14	)		408		(12	)		1,508		(26	)
Common and preferred stock		677		(71	)		407		(89	)		1,084		(160	)


Total	$	92,776	$	(504	)	$	1,424	$	(133	)	$	94,200	$	(637	)

	Less than 12 Months					12 Months or Greater							Total Unrealized Losses


(In millions)	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Total Fair Value


June 30, 2016

U.S. government and agency securities	$	5,816	$	(3	)	$	432	$	(8	)	$	6,248	$	(11	)
Foreign government bonds		3,452		(3	)		35		(15	)		3,487		(18	)
Mortgage- and asset-backed securities		844		(1	)		322		(1	)		1,166		(2	)
Corporate notes and bonds		1,180		(11	)		788		(24	)		1,968		(35	)
Common and preferred stock		896		(147	)		390		(89	)		1,286		(236	)


Total	$	12,188	$	(165	)	$	1,967	$	(137	)	$	14,155	$	(302	)

Unrealized losses from fixed-income securities are primarily attributable to changes in interest rates. Unrealized losses from domestic and international equities are due to market price movements. Management does not believe any remaining unrealized losses represent other-than-temporary impairments based on our evaluation of available evidence.

Debt Investment Maturities

(In millions)	Cost Basis		Estimated Fair Value


December 31, 2016

Due in one year or less	$	16,027	$	16,026
Due after one year through five years		94,925		94,669
Due after five years through 10 years		4,470		4,402
Due after 10 years		1,294		1,287


Total	$	116,716	$	116,384

DERIVATIVES

6 Months Ended

Dec. 31, 2016

DERIVATIVES

NOTE 5 — DERIVATIVES

We use derivative instruments to manage risks related to foreign currencies, equity prices, interest rates, and credit; to enhance investment returns; and to facilitate portfolio diversification. Our objectives for holding derivatives include reducing, eliminating, and efficiently managing the economic impact of these exposures as effectively as possible.

Our derivative programs include strategies that both qualify and do not qualify for hedge accounting treatment. All notional amounts presented below are measured in U.S. dollar equivalents.

Foreign Currency

Certain forecasted transactions, assets, and liabilities are exposed to foreign currency risk. We monitor our foreign currency exposures daily to maximize the economic effectiveness of our foreign currency hedge positions. Option and forward contracts are used to hedge a portion of forecasted international revenue for up to three years in the future and are designated as cash flow hedging instruments. Principal currencies hedged include the euro, Japanese yen, British pound, Canadian dollar, and Australian dollar. As of December 31, 2016 and June 30, 2016, the total notional amounts of these foreign exchange contracts sold were $6.7 billion and $8.4 billion, respectively.

Foreign currency risks related to certain non-U.S. dollar denominated securities are hedged using foreign exchange forward contracts that are designated as fair value hedging instruments. As of December 31, 2016 and June 30, 2016, the total notional amounts of these foreign exchange contracts sold were $4.5 billion and $5.3 billion, respectively.

Certain options and forwards not designated as hedging instruments are also used to manage the variability in foreign exchange rates on certain balance sheet amounts and to manage other foreign currency exposures. As of December 31, 2016, the total notional amounts of these foreign exchange contracts purchased and sold were $7.8 billion and $8.8 billion, respectively. As of June 30, 2016, the total notional amounts of these foreign exchange contracts purchased and sold were $12.0 billion and $11.7 billion, respectively.

Equity

Securities held in our equity and other investments portfolio are subject to market price risk. Market price risk is managed relative to broad-based global and domestic equity indices using certain convertible preferred investments, options, futures, and swap contracts not designated as hedging instruments. From time to time, to hedge our price risk, we may use and designate equity derivatives as hedging instruments, including puts, calls, swaps, and forwards. As of December 31, 2016, the total notional amounts of equity contracts purchased and sold for managing market price risk were $1.2 billion and $1.8 billion, respectively, of which $567 million and $764 million, respectively, were designated as hedging instruments. As of June 30, 2016, the total notional amounts of equity contracts purchased and sold for managing market price risk were $1.3 billion and $2.2 billion, respectively, of which $737 million and $986 million, respectively, were designated as hedging instruments.

Interest Rate

Securities held in our fixed-income portfolio are subject to different interest rate risks based on their maturities. We manage the average maturity of our fixed-income portfolio to achieve economic returns that correlate to certain broad-based fixed-income indices using exchange-traded option and futures contracts, and over-the-counter swap and option contracts, none of which are designated as hedging instruments. As of December 31, 2016, the total notional amounts of fixed-interest rate contracts purchased and sold were $453 million and $520 million, respectively. As of June 30, 2016, the total notional amounts of fixed-interest rate contracts purchased and sold were $328 million and $2.4 billion, respectively.

In addition, we use “To Be Announced” forward purchase commitments of mortgage-backed assets to gain exposure to agency mortgage-backed securities. These meet the definition of a derivative instrument in cases where physical delivery of the assets is not taken at the earliest available delivery date. As of December 31, 2016 and June 30, 2016, the total notional derivative amounts of mortgage contracts purchased were $570 million and $548 million, respectively.

Credit

Our fixed-income portfolio is diversified and consists primarily of investment-grade securities. We use credit default swap contracts, not designated as hedging instruments, to manage credit exposures relative to broad-based indices and to facilitate portfolio diversification. We use credit default swaps as they are a low-cost method of managing exposure to individual credit risks or groups of credit risks. As of December 31, 2016, the total notional amounts of credit contracts purchased and sold were $359 million and $144 million, respectively. As of June 30, 2016, the total notional amounts of credit contracts purchased and sold were $440 million and $273 million, respectively.

Commodity

We use broad-based commodity exposures to enhance portfolio returns and to facilitate portfolio diversification. We use swaps, futures, and option contracts, not designated as hedging instruments, to generate and manage exposures to broad-based commodity indices. We use derivatives on commodities as they can be low-cost alternatives to the purchase and storage of a variety of commodities, including, but not limited to, precious metals, energy, and grain. As of December 31, 2016, the total notional amounts of commodity contracts purchased and sold were $542 million and $157 million, respectively. As of June 30, 2016, the total notional amounts of commodity contracts purchased and sold were $631 million and $162 million, respectively.

Credit-Risk-Related Contingent Features

Certain of our counterparty agreements for derivative instruments contain provisions that require our issued and outstanding long-term unsecured debt to maintain an investment grade credit rating and require us to maintain minimum liquidity of $1.0 billion. To the extent we fail to meet these requirements, we will be required to post collateral, similar to the standard convention related to over-the-counter derivatives. As of December 31, 2016, our long-term unsecured debt rating was AAA, and cash investments were in excess of $1.0 billion. As a result, no collateral was required to be posted.

Fair Values of Derivative Instruments

Derivative instruments are recognized as either assets or liabilities and are measured at fair value. The accounting for changes in the fair value of a derivative depends on the intended use of the derivative and the resulting designation.

For derivative instruments designated as fair value hedges, the gains (losses) are recognized in earnings in the periods of change together with the offsetting losses (gains) on the hedged items attributed to the risk being hedged. For options designated as fair value hedges, changes in the time value are excluded from the assessment of hedge effectiveness and are recognized in earnings.

For derivative instruments designated as cash flow hedges, the effective portion of the gains (losses) on the derivatives is initially reported as a component of OCI and is subsequently recognized in earnings when the hedged exposure is recognized in earnings. For options designated as cash flow hedges, changes in the time value are excluded from the assessment of hedge effectiveness and are recognized in earnings. Gains (losses) on derivatives representing either hedge components excluded from the assessment of effectiveness or hedge ineffectiveness are recognized in earnings.

For derivative instruments that are not designated as hedges, gains (losses) from changes in fair values are primarily recognized in other income (expense), net. Other than those derivatives entered into for investment purposes, such as commodity contracts, the gains (losses) are generally economically offset by unrealized gains (losses) in the underlying available-for-sale securities, which are recorded as a component of OCI until the securities are sold or other-than-temporarily impaired, at which time the amounts are reclassified from accumulated other comprehensive income (“AOCI”) into other income (expense), net.

The following table presents the fair values of derivative instruments designated as hedging instruments (“designated hedge derivatives”) and not designated as hedging instruments (“non-designated hedge derivatives”). The fair values exclude the impact of netting derivative assets and liabilities when a legally enforceable master netting agreement exists and fair value adjustments related to our own credit risk and counterparty credit risk:

	December 31, 2016												June 30, 2016


	Assets									Liabilities			Assets									Liabilities


(In millions)	Short-term Investments			Other Current Assets			Equity and Other Investments			Other Current Liabilities			Short-term Investments			Other Current Assets			Equity and Other Investments			Other Current Liabilities


Non-designated Hedge Derivatives

Foreign exchange contracts	$	23		$	229		$	0		$	(238	)	$	33		$	156		$	0		$	(296	)
Equity contracts		20			0			0			(4	)		23			0			0			(16	)
Interest rate contracts		5			0			0			(5	)		10			0			0			(25	)
Credit contracts		6			0			0			(3	)		6			0			0			(5	)
Commodity contracts		1			0			0			0			0			0			0			0


Total	$	55		$	229		$	0		$	(250	)	$	72		$	156		$	0		$	(342	)


Designated Hedge Derivatives

Foreign exchange contracts	$	293		$	543		$	0		$	0		$	1		$	392		$	0		$	(263	)
Equity contracts		0			0			1			(26	)		0			0			18			(25	)


Total	$	293		$	543		$	1		$	(26	)	$	1		$	392		$	18		$	(288	)


Total gross amounts of derivatives	$	348		$	772		$	1		$	(276	)	$	73		$	548		$	18		$	(630	)


Gross derivatives either offset or subject to an enforceable master netting agreement	$	348		$	772		$	1		$	(275	)	$	69		$	548		$	18		$	(630	)
Gross amounts of derivatives offset on the balance sheet		(2	)		(227	)		(25	)		251			(74	)		(302	)		(25	)		398


Net amounts presented on the balance sheet		346			545			(24	)		(24	)		(5	)		246			(7	)		(232	)
Gross amounts of derivatives not offset on the balance sheet		0			0			0			(1	)		0			0			0			0
Cash collateral received		0			0			0			(548	)		0			0			0			(250	)


Net amount	$	346		$	545		$	(24	)	$	(573	)	$	(5	)	$	246		$	(7	)	$	(482	)

See also Note 4 – Investments and Note 6 – Fair Value Measurements.

Fair-Value Hedge Gains (Losses)

We recognized in other income (expense), net the following gains (losses) on contracts designated as fair-value hedges and their related hedged items:

(In millions)	Three Months Ended December 31,						Six Months Ended December 31,


	2016			2015			2016			2015

Foreign Exchange Contracts

Derivatives	$	685		$	48		$	637		$	(33	)
Hedged items		(674	)		(41	)		(606	)		50


Total amount of ineffectiveness	$	11		$	7		$	31		$	17


Equity Contracts

Derivatives	$	(7	)	$	(59	)	$	(17	)	$	(92	)
Hedged items		7			59			17			92


Total amount of ineffectiveness	$	0		$	0		$	0		$	0


Amount of equity contracts excluded from effectiveness assessment	$	(1	)	$	(15	)	$	(4	)	$	4

Cash Flow Hedge Gains (Losses)

We recognized the following gains (losses) on foreign exchange contracts designated as cash-flow hedges:

(In millions)	Three Months Ended December 31,						Six Months Ended December 31,


	2016			2015			2016			2015

Effective Portion

Gains recognized in other comprehensive income (net of tax effects of $3, $15, $4, and $43)	$	449		$	122		$	484		$	283
Gains reclassified from accumulated other comprehensive income into revenue		172			181			247			290

Amount Excluded from Effectiveness Assessment and Ineffective Portion

Losses recognized in other income (expense), net		(84	)		(72	)		(154	)		(154	)

We estimate that $490 million of net derivative gains included in AOCI at December 31, 2016 will be reclassified into earnings within the following 12 months. No significant amounts of gains (losses) were reclassified from AOCI into earnings as a result of forecasted transactions that failed to occur during the three and six months ended December 31, 2016.

Non-Designated Derivative Gains (Losses)

Gains (losses) from changes in fair values of derivatives that are not designated as hedges are primarily recognized in other income (expense), net. These amounts are shown in the table below, with the exception of gains (losses) on derivatives presented in income statement line items other than other income (expense), net, which were immaterial for the periods presented. Other than those derivatives entered into for investment purposes, such as commodity contracts, the gains (losses) below are generally economically offset by unrealized gains (losses) in the underlying available-for-sale securities and gains (losses) from foreign exchange rate changes on certain balance sheet amounts.


(In millions)	Three Months Ended December 31,						Six Months Ended December 31,


	2016			2015			2016			2015

Foreign exchange contracts	$	26		$	(134	)	$	(5	)	$	(75	)
Equity contracts		(25	)		(30	)		(42	)		4
Interest-rate contracts		(10	)		9			(6	)		8
Credit contracts		2			2			4			(3	)
Commodity contracts		22			(52	)		0			(136	)


Total	$	15		$	(205	)	$	(49	)	$	(202	)

- Definition

The entire disclosure for derivative instruments and hedging activities including, but not limited to, risk management strategies, non-hedging derivative instruments, assets, liabilities, revenue and expenses, and methodologies and assumptions used in determining the amounts.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
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-URI http://asc.fasb.org/extlink&oid=6441202&loc=d3e80720-113993

Reference 2: http://www.xbrl.org/2003/role/presentationRef
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Reference 3: http://www.xbrl.org/2003/role/presentationRef
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-Name Accounting Standards Codification
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-Name Accounting Standards Codification
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+ Details

FAIR VALUE MEASUREMENTS

6 Months Ended

Dec. 31, 2016

FAIR VALUE MEASUREMENTS

NOTE 6 — FAIR VALUE MEASUREMENTS

We account for certain assets and liabilities at fair value. The hierarchy below lists three levels of fair value based on the extent to which inputs used in measuring fair value are observable in the market. We categorize each of our fair value measurements in one of these three levels based on the lowest level input that is significant to the fair value measurement in its entirety. These levels are:

•

Level 1 – inputs are based upon unadjusted quoted prices for identical instruments traded in active markets. Our Level 1 non-derivative investments primarily include U.S. government securities, domestic and international equities, and actively traded 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 and commodities. Our Level 2 non-derivative investments consist primarily of corporate notes and bonds, common and preferred stock, mortgage- and asset-backed securities, U.S. government and agency securities, and foreign government bonds. Our Level 2 derivative assets and liabilities primarily include certain over-the-counter option and swap contracts.

•

Level 3 – inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques, including option pricing models and discounted cash flow models. Our Level 3 non-derivative assets and liabilities primarily comprise investments in common and preferred stock, and goodwill and intangible assets, when they are recorded at fair value due to an impairment charge. Unobservable inputs used in the models are significant to the fair values of the assets and liabilities.

We measure certain assets, including our cost and equity method investments, at fair value on a nonrecurring basis when they are deemed to be other-than-temporarily impaired. The fair values of these investments are determined based on valuation techniques using the best information available, and may include quoted market prices, market comparables, and discounted cash flow projections. An impairment charge is recorded when the cost of the investment exceeds its fair value and this condition is determined to be other-than-temporary.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following tables present the fair value of our financial instruments that are measured at fair value on a recurring basis:

(In millions)		Level 1		Level 2		Level 3		Gross Fair Value		Netting	^(a)		Net Fair Value


December 31, 2016

Assets

Mutual funds	$	2,363	$	0	$	0	$	2,363	$	0		$	2,363
Commercial paper		0		177		0		177		0			177
Certificates of deposit		0		1,284		0		1,284		0			1,284
U.S. government and agency securities		93,744		5,996		0		99,740		0			99,740
Foreign government bonds		12		4,398		0		4,410		0			4,410
Mortgage- and asset-backed securities		0		4,366		0		4,366		0			4,366
Corporate notes and bonds		0		5,736		1		5,737		0			5,737
Municipal securities		0		322		0		322		0			322
Common and preferred stock		5,750		1,833		18		7,601		0			7,601
Derivatives		5		1,116		0		1,121		(254	)		867


Total	$	101,874	$	25,228	$	19	$	127,121	$	(254	)	$	126,867


Liabilities

Derivatives and other	$	1	$	275	$	23	$	299	$	(251	)	$	48

(In millions)		Level 1		Level 2		Level 3		Gross Fair Value		Netting	^(a)		Net Fair Value


June 30, 2016

Assets

Mutual funds	$	1,012	$	0	$	0	$	1,012	$	0		$	1,012
Commercial paper		0		298		0		298		0			298
Certificates of deposit		0		1,000		0		1,000		0			1,000
U.S. government and agency securities		86,492		3,707		0		90,199		0			90,199
Foreign government bonds		10		5,705		0		5,715		0			5,715
Mortgage- and asset-backed securities		0		4,803		0		4,803		0			4,803
Corporate notes and bonds		0		6,361		1		6,362		0			6,362
Municipal securities		0		342		0		342		0			342
Common and preferred stock		6,918		2,114		18		9,050		0			9,050
Derivatives		6		633		0		639		(401	)		238


Total	$	94,438	$	24,963	$	19	$	119,420	$	(401	)	$	119,019


Liabilities

Derivatives and other	$	17	$	613	$	0	$	630	$	(398	)	$	232

(a)	These amounts represent the impact of netting derivative assets and derivative liabilities when a legally enforceable master netting agreement exists and fair value adjustments related to our own credit risk and counterparty credit risk.

The changes in our Level 3 financial instruments that are measured at fair value on a recurring basis were immaterial during the periods presented.

The following table reconciles the total “Net Fair Value” of assets above to the balance sheet presentation of these same assets in Note 4 – Investments.

(In millions)


December 31, 2016				June 30, 2016

Net fair value of assets measured at fair value on a recurring basis	$	126,867		$	119,019
Cash		4,037			3,501
Common and preferred stock measured at fair value on a nonrecurring basis		815			767
Other investments measured at fair value on a nonrecurring basis		497			593
Less derivative net assets classified as other current assets		(545	)		(246	)
Other		(4	)		12


Recorded basis of investment components	$	131,667		$	123,646

Financial Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

During the three and six months ended December 31, 2016 and 2015, we did not record any material other-than-temporary impairments on financial assets required to be measured at fair value on a nonrecurring basis.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

INVENTORIES

6 Months Ended

Dec. 31, 2016

INVENTORIES

NOTE 7 — INVENTORIES

The components of inventories were as follows:

(In millions)


	December 31, 2016		June 30, 2016

Raw materials	$	363	$	612
Work in process		98		158
Finished goods		1,500		1,481


Total	$	1,961	$	2,251

BUSINESS COMBINATIONS

6 Months Ended

Dec. 31, 2016

BUSINESS COMBINATIONS

NOTE 8 — BUSINESS COMBINATIONS

On December 8, 2016, we completed our acquisition of all of the issued and outstanding shares of LinkedIn, the world’s largest professional network on the Internet, for a preliminary total purchase price of $27.0 billion. The purchase price primarily consisted of cash of $26.4 billion. The acquisition is expected to accelerate the growth of LinkedIn, Office 365, and Dynamics 365. The financial results of LinkedIn have been included in our consolidated financial statements since the date of the acquisition.

The purchase price allocation as of the date of the acquisition was based on a preliminary valuation and is subject to revision as more detailed analyses are completed and additional information about the fair value of assets acquired and liabilities assumed becomes available.

The major classes of assets and liabilities to which we have preliminarily allocated the purchase price were as follows:

(In millions)


Cash and cash equivalents	$	1,328
Short-term investments		2,110
Other current assets		697
Property and equipment		1,565
Intangible assets		7,867
Goodwill ⁽^a⁾		16,813
Short-term debt ^(b)		(1,323	)
Other current liabilities		(1,120	)
Deferred income taxes		(808	)
Other		(132	)


Total purchase price	$	26,997

(a)	Goodwill was assigned to our Productivity and Business Processes segment. The goodwill was primarily attributed to increased synergies that are expected to be achieved from the integration of LinkedIn. None of the goodwill is expected to be deductible for income tax purposes.

(b)

Convertible senior notes issued by LinkedIn on November 12, 2014, substantially all of which were redeemed prior to December 31, 2016. The remaining $18 million of notes are not redeemable and are included in long-term debt on our consolidated balance sheets. See Note 11 – Debt for further information.

Following are the details of the purchase price allocated to the intangible assets acquired:

(In millions)	Amount		Weighted Average Life


Technology-based	$	2,109		3 years
Contract-based		23		5 years
Customer-related		3,587		7 years
Marketing-related (trade names)		2,148		20 years


Fair value of intangible assets acquired	$	7,867		9 years

Our consolidated income statements for both the three and six months ended December 31, 2016 include revenue and operating loss of $228 million and $201 million, respectively, attributable to LinkedIn since the date of acquisition.

Following are the supplemental consolidated results of Microsoft Corporation on an unaudited pro forma basis, as if the acquisition had been consummated on July 1, 2015:

(In millions, except earnings per share)	Three Months Ended December 31,				Six Months Ended December 31,


	2016		2015			2016		2015

Revenue	$	24,866	$	24,629	$	46,271	$	45,739
Net income	$	5,010	$	4,685	$	9,494	$	9,150
Diluted earnings per share	$	0.64	$	0.58	$	1.21	$	1.14

These pro forma results were based on estimates and assumptions, which we believe are reasonable. They are not the results that would have been realized had we been a combined company during the periods presented and are not necessarily indicative of our consolidated results of operations in future periods. The pro forma results include adjustments related to purchase accounting, primarily amortization of intangible assets. Acquisition costs and other non-recurring charges incurred were immaterial, and are included in the earliest period presented.

GOODWILL

6 Months Ended

Dec. 31, 2016

GOODWILL

NOTE 9 — GOODWILL

Changes in the carrying amount of goodwill were as follows:

(In millions)	June 30, 2016		Acquisitions			Other			December 31, 2016


Productivity and Business Processes	$	6,678	$	16,816	^(a)	$	(38	)	$	23,456
Intelligent Cloud		5,467		0			1			5,468
More Personal Computing		5,727		14			(141	)		5,600


Total	$	17,872	$	16,830		$	(178	)	$	34,524

(a)	Includes goodwill related to LinkedIn and other acquisitions. See Note 8 – Business Combinations for further information.

The measurement periods for the valuation of assets acquired and liabilities assumed end as soon as information on the facts and circumstances that existed as of the acquisition dates becomes available, but do not exceed 12 months. Adjustments in purchase price allocations may require a change in the amounts allocated to goodwill during the periods in which the adjustments are determined.

Any change in the goodwill amounts resulting from foreign currency translations and purchase accounting adjustments are presented as “Other” in the above table. Also included in “Other” are business dispositions and transfers between business segments due to reorganizations, as applicable.

INTANGIBLE ASSETS

6 Months Ended

Dec. 31, 2016

INTANGIBLE ASSETS

NOTE 10 — INTANGIBLE ASSETS

The components of intangible assets, all of which are finite-lived, were as follows:

(In millions)	Gross Carrying Amount			Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount


	December 31, 2016								June 30, 2016

Technology-based ^(a)	$	7,619		$	(3,604	)	$	4,015	$	5,970	$	(3,648	)	$	2,322
Marketing-related		3,983			(691	)		3,292		1,869		(616	)		1,253
Contract-based		801			(709	)		92		796		(718	)		78
Customer-related		4,023			(421	)		3,602		465		(385	)		80


Total	$	16,426	^(b)	$	(5,425	)	$	11,001	$	9,100	$	(5,367	)	$	3,733

(a)	Technology-based intangible assets included $87 million and $115 million of net carrying amount of software to be sold, leased, or otherwise marketed as of December 31, 2016 and June 30, 2016, respectively.

(b)	Includes intangible assets related to LinkedIn and other additions. See Note 8 – Business Combinations for further information.

Intangible assets amortization expense was $315 million and $529 million for the three and six months ended December 31, 2016, respectively, and $249 million and $491 million for the three and six months ended December 31, 2015, respectively. Amortization of capitalized software was $14 million and $28 million for the three and six months ended December 31, 2016, respectively, and $18 million and $36 million for the three and six months ended December 31, 2015, respectively.

The following table outlines the estimated future amortization expense related to intangible assets held as of December 31, 2016:

(In millions)


Year Ending June 30,

2017 (excluding the six months ended December 31, 2016)	$	1,103
2018		2,167
2019		1,688
2020		1,168
2021		978
Thereafter		3,897


Total	$	11,001

DEBT

6 Months Ended

Dec. 31, 2016

DEBT

NOTE 11 — DEBT

Short-term Debt

As of December 31, 2016, we had $25.1 billion of commercial paper issued and outstanding, with a weighted-average interest rate of 0.78% and maturities ranging from 43 days to 266 days. As of June 30, 2016, we had $12.9 billion of commercial paper issued and outstanding, with a weighted-average interest rate of 0.43% and maturities ranging from 1 day to 99 days. The estimated fair value of this commercial paper approximates its carrying value.

In November 2016, we entered into a $5.0 billion credit facility which replaced our $5.0 billion credit facility that expired on November 1, 2016. We currently have two $5.0 billion credit facilities that expire on October 31, 2017 and November 14, 2018, respectively. These credit facilities serve as a back-up for our commercial paper program. As of December 31, 2016, we were in compliance with the only financial covenant in both credit agreements, which requires us to maintain a coverage ratio of at least three times earnings before interest, taxes, depreciation, and amortization to interest expense, as defined in the credit agreements. No amounts were drawn against these credit facilities during any of the periods presented.

Long-term Debt

As of December 31, 2016, the total carrying value and estimated fair value of our long-term debt, including the current portion, were $59.9 billion and $60.8 billion, respectively. As of June 30, 2016, the total carrying value and estimated fair value of our long-term debt were $40.6 billion and $44.0 billion, respectively. These estimated fair values are based on Level 2 inputs.

The components of our long-term debt, including the current portion, and the associated interest rates were as follows as of December 31, 2016 and June 30, 2016:

Due Date	Face Value December 31, 2016		Face Value June 30, 2016		Stated Interest Rate		Effective Interest Rate


	(In millions)

Notes

November 15, 2017		600		600		0.875%		1.084%
May 1, 2018		450		450		1.000%		1.106%
November 3, 2018		1,750		1,750		1.300%		1.396%
December 6, 2018		1,250		1,250		1.625%		1.824%
June 1, 2019		1,000		1,000		4.200%		4.379%
August 8, 2019 ^(a)		2,500		*		1.100%		1.203%
November 1, 2019 ^(c)		18		*		0.500%		0.500%
February 12, 2020		1,500		1,500		1.850%		1.935%
October 1, 2020		1,000		1,000		3.000%		3.137%
November 3, 2020		2,250		2,250		2.000%		2.093%
February 8, 2021		500		500		4.000%		4.082%
August 8, 2021 ^(a)		2,750		*		1.550%		1.642%
December 6, 2021 ^(b)		1,846		1,944		2.125%		2.233%
February 12, 2022		1,500		1,500		2.375%		2.466%
November 3, 2022		1,000		1,000		2.650%		2.717%
November 15, 2022		750		750		2.125%		2.239%
May 1, 2023		1,000		1,000		2.375%		2.465%
August 8, 2023 ^(a)		1,500		*		2.000%		2.101%
December 15, 2023		1,500		1,500		3.625%		3.726%
February 12, 2025		2,250		2,250		2.700%		2.772%
November 3, 2025		3,000		3,000		3.125%		3.176%
August 8, 2026 ^(a)		4,000		*		2.400%		2.464%
December 6, 2028 ^(b)		1,846		1,944		3.125%		3.218%
May 2, 2033 ^(b)		580		611		2.625%		2.690%
February 12, 2035		1,500		1,500		3.500%		3.604%
November 3, 2035		1,000		1,000		4.200%		4.260%
August 8, 2036 ^(a)		2,250		*		3.450%		3.510%
June 1, 2039		750		750		5.200%		5.240%
October 1, 2040		1,000		1,000		4.500%		4.567%
February 8, 2041		1,000		1,000		5.300%		5.361%
November 15, 2042		900		900		3.500%		3.571%
May 1, 2043		500		500		3.750%		3.829%
December 15, 2043		500		500		4.875%		4.918%
February 12, 2045		1,750		1,750		3.750%		3.800%
November 3, 2045		3,000		3,000		4.450%		4.492%
August 8, 2046 ^(a)		4,500		*		3.700%		3.743%
February 12, 2055		2,250		2,250		4.000%		4.063%
November 3, 2055		1,000		1,000		4.750%		4.782%
August 8, 2056 ^(a)		2,250		*		3.950%		4.033%


Total	$	60,490	$	40,949

(a)	In August 2016, we issued $19.8 billion of debt securities.

(b)	Euro-denominated debt securities.

(c)	Remaining notes that were acquired as part of the LinkedIn acquisition. See Note 8 – Business combinations for further information.

*	Not applicable

The notes in the table above are senior unsecured obligations and rank equally with our other senior unsecured debt outstanding. Interest on these notes is paid semi-annually, except for the euro-denominated debt securities on which interest is paid annually. Effective July 1, 2016, we retrospectively adopted accounting guidance that requires debt issuance costs to be recorded as a deduction from the carrying amount of the debt liability, consistent with debt discounts. As of December 31, 2016 and June 30, 2016, the combined aggregate unamortized discount and debt issuance costs associated with our long-term debt, including the current portion, were $585 million and $392 million, respectively.

INCOME TAXES

6 Months Ended

Dec. 31, 2016

INCOME TAXES

NOTE 12 — INCOME TAXES

Our effective tax rate for the three months ended December 31, 2016 and 2015 was 18% and 14%, respectively, and our effective tax rate for the six months ended December 31, 2016 and 2015 was 15% and 13%, respectively. Our effective tax rate was lower than the U.S. federal statutory rate primarily due to earnings taxed at lower rates in foreign jurisdictions resulting from producing and distributing our products and services through our foreign regional operations centers in Ireland, Singapore, and Puerto Rico.

This quarter’s effective tax rate was higher than the prior year’s second quarter effective tax rate, primarily due to changes in the mix of our income before income taxes between the U.S. and foreign countries. The prior year’s second quarter effective tax rate also included a tax benefit related to the retroactive reinstatement of the U.S. research and development tax credit. The current year-to-date effective tax rate was higher than the prior year-to-date effective tax rate, primarily due to changes in the mix of our income before income taxes between the U.S. and foreign countries.

Tax contingencies and other income tax liabilities were $13.3 billion and $11.8 billion as of December 31, 2016 and June 30, 2016, respectively, and are included in other long-term liabilities. This increase relates primarily to current period intercompany transfer pricing and foreign tax credits.

While we settled a portion of the Internal Revenue Service (“IRS”) audit for tax years 2004 to 2006 during the third quarter of fiscal year 2011, and settled a portion of the IRS audit for tax years 2007 to 2009 during the first quarter of fiscal year 2016, we remain under audit for those years. We also continue to be subject to examination by the IRS for tax years 2010 to 2016. In February 2012, the IRS withdrew its 2011 Revenue Agents Report for tax years 2004 to 2006 and reopened the audit phase of the examination. As of December 31, 2016, the primary unresolved issue relates to transfer pricing, which could have a significant impact on our consolidated financial statements if not resolved favorably. We believe our allowances for income tax contingencies are adequate. We have not received a proposed assessment for the unresolved issues and do not expect a final resolution of these issues in the next 12 months. Based on the information currently available, we do not anticipate a significant increase or decrease to our tax contingencies for these issues within the next 12 months.

We are subject to income tax in many jurisdictions outside the U.S. Our operations in certain jurisdictions remain subject to examination for tax years 1996 to 2016, some of which are currently under audit by local tax authorities. The resolutions of these audits are not expected to be material to our consolidated financial statements.

RESTRUCTURING CHARGES

6 Months Ended

Dec. 31, 2016

RESTRUCTURING CHARGES

NOTE 13 — RESTRUCTURING CHARGES

Phone Hardware Restructuring

In June 2015, management approved a plan to restructure our phone business to better focus and align resources (the “Phone Hardware Restructuring Plan”), under which we eliminated approximately 7,400 positions in fiscal year 2016.

In fiscal year 2015, we incurred restructuring charges of $780 million under the Phone Hardware Restructuring Plan, including severance expenses and other reorganization costs. In fiscal year 2016, we reversed $21 million of previously estimated restructuring charges related to contract termination costs. The actions associated with the Phone Hardware Restructuring Plan were substantially complete as of June 30, 2016, and are expected to be completed by the end of fiscal year 2017.

2016 Restructuring

In the fourth quarter of fiscal year 2016, management approved restructuring plans that would result in job eliminations, primarily across our smartphone hardware business and global sales. In addition to the elimination of 1,850 positions that were announced in May 2016, approximately 2,850 roles globally will be reduced during fiscal year 2017 as an extension of the earlier plan. These actions are expected to be completed by the end of the current fiscal year.

In fiscal year 2016, we incurred restructuring charges of $501 million in connection with the 2016 restructuring plans, including severance expenses and other reorganization costs. We do not expect to incur additional charges for these restructuring plans in subsequent years.

Restructuring charges associated with each of these plans were included in impairment, integration, and restructuring expenses on our consolidated income statement, and were reflected in Corporate and Other in our table of operating income (loss) by segment.

Changes in the restructuring liability were as follows:

(In millions)		Severance			Other	^(a)		Total


Restructuring liability as of June 30, 2016	$	470		$	239		$	709
Restructuring charges		0			0			0
Cash paid		(250	)		(35	)		(285	)
Other		(7	)		(4	)		(11	)


Restructuring liability as of December 31, 2016	$	213		$	200		$	413

(a)	“Other” primarily reflects activities associated with the consolidation of our facilities and manufacturing operations, including contract termination costs and asset write-downs.

UNEARNED REVENUE

6 Months Ended

Dec. 31, 2016

UNEARNED REVENUE

NOTE 14 — UNEARNED REVENUE

Unearned revenue by segment was as follows:

(In millions)


	December 31, 2016		June 30, 2016

Productivity and Business Processes	$	11,447	$	12,497
Intelligent Cloud		9,749		11,472
More Personal Computing		3,034		3,334
Corporate and Other		10,450		6,606


Total	$	34,680	$	33,909

Revenue from Windows 10 is primarily recognized at the time of billing in the More Personal Computing segment, and the deferral and subsequent recognition of revenue is reflected in Corporate and Other in the table above. As of December 31, 2016 and June 30, 2016, we deferred a net $10.5 billion and $6.6 billion, respectively, in revenue related to Windows 10.

- Definition

The entire disclosure for deferred revenues at the end of the reporting period, and description and amounts of significant changes that occurred during the reporting period. Deferred revenue is a liability as of the balance sheet date related to a revenue producing activity for which revenue has not yet been recognized. Generally, an entity records deferred revenue when it receives consideration from a customer before achieving certain criteria that must be met for revenue to be recognized in conformity with GAAP.

+ References + Details

COMMITMENTS AND CONTINGENCIES

6 Months Ended

Dec. 31, 2016

COMMITMENTS AND CONTINGENCIES

NOTE 15 — COMMITMENTS AND CONTINGENCIES

Capital Lease Commitments

We have capital leases for datacenters and corporate offices. As of December 31, 2016 and June 30, 2016, assets recorded under capital leases were $1.6 billion and $865 million, respectively, and accumulated depreciation associated with capital leases was $95 million and $57 million, respectively. For the three and six months ended December 31, 2016, property and equipment acquired under capital leases was $498 million and $765 million, respectively. We did not acquire any property and equipment under capital leases during the three or six months ended December 31, 2015. As of December 31, 2016 and June 30, 2016, capital lease obligations included in other current liabilities were $56 million and $25 million, respectively, and capital lease obligations included in other long-term liabilities were $1.5 billion and $761 million, respectively.

Future minimum lease payments under non-cancellable capital leases as of December 31, 2016 are as follows:

(In millions)


Year Ending June 30,

2017 (excluding the six months ended December 31, 2016)	$	62
2018		126
2019		129
2020		133
2021		136
Thereafter		1,529


Total ^(a)	$	2,115

(a)	As of December 31, 2016, capital leases included imputed interest of $581 million.

As of December 31, 2016, we had additional purchase obligations for capital leases executed but not yet recorded of $4.2 billion.

Contingencies

Patent and Intellectual Property Claims

IPCom patent litigation

IPCom GmbH & Co. (“IPCom”) is a German company that holds a large portfolio of mobile technology-related patents spanning about 170 patent families and addressing a broad range of cellular technologies. IPCom has asserted 19 of these patents in litigation against Nokia Corporation (“Nokia”) and many of the leading cell phone companies and operators. In November 2014, Microsoft and IPCom entered into a standstill agreement staying all of the pending litigation against Microsoft to permit the parties to pursue settlement discussions.

InterDigital patent litigation

InterDigital Technology Corporation and InterDigital Communications Corporation (collectively, “IDT”) filed four patent infringement cases against Nokia in the International Trade Commission (“ITC”) and in U.S. District Court for the District of Delaware between 2007 and 2013. We have been added to these cases as a defendant. IDT has cases pending against other defendants based on the same patents because most of the patents at issue allegedly relate to 3G and 4G wireless communications standards essential functionality. The cases involving us include three ITC investigations where IDT sought an order excluding importation of 3G and 4G phones into the U.S. and one active case in U.S. District Court in Delaware seeking an injunction and damages. Each of the ITC matters has been resolved in our favor. In September 2015, in an inter partes review the United States Patent Trial and Appeal Board issued a final written decision that deemed unpatentable all asserted claims of the patent remaining at issue in the Delaware case. IDT appealed this decision to the U.S. Court of Appeals for the Federal Circuit. The Delaware case has been stayed pending final completion of the inter partes review (including appeals and any subsequent proceedings in the Patent Office). We filed an antitrust complaint against IDT in the District of Delaware in August 2015 asserting violations of Section 2 of the Sherman Act, alleging unlawful exploitation of standard essential patents. That case is set for trial in September 2018.

European copyright levies

We assumed from Nokia all potential liability due to Nokia’s alleged failure to pay “private copyright levies” in various European countries based upon sale of memory cards and mobile phones that incorporate blank memory. The levies are based upon a 2001 European Union (“EU”) Directive establishing a right for end users to make copies of copyrighted works for personal or private use, but also allowing the collection of levies based upon sales of blank media or recording devices to compensate copyright holders for private copying. Various collecting societies in EU countries initiated litigation against Nokia, stating it must pay levies not only based upon sales of blank memory cards, but also phones that include blank memory for data storage on the phones, regardless of actual usage of that memory. The most significant cases against Nokia were pending in Germany and Austria, due to both the high volume of sales and high levy amounts sought in these countries. We reached a settlement of the Austrian case in August 2016. In Germany, the only period for which settlement has not been reached is 2004-2007. In July, the German Supreme Court heard our appeal contesting the legality of the levy assessed on phones with music players and over five megabytes of memory. The Supreme Court issued a ruling in December 2016, finding that the levy may not be appropriate for phones that have the ability to receive music files only via Bluetooth or infrared inputs, and remanded for further proceedings. A new case schedule has not been set, and we are participating in industry-wide settlement negotiations with the collecting society.

Other patent and intellectual property claims

In addition to these cases, there were 58 other patent infringement cases pending against Microsoft as of December 31, 2016.

Antitrust, Unfair Competition, and Overcharge Class Actions

Antitrust and unfair competition class action lawsuits were filed against us in British Columbia, Ontario, and Quebec, Canada. All three have been certified on behalf of Canadian indirect purchasers who acquired licenses for Microsoft operating system software and/or productivity application software between 1998 and 2010.

The trial of the British Columbia action commenced in May 2016. The plaintiffs filed their case in chief in August 2016, setting out claims made, authorities, and evidence in support of their claims. A six-month oral hearing is scheduled to commence in September 2017, consisting of cross examination on witness affidavits. The Ontario and Quebec cases are inactive.

Other Antitrust Litigation and Claims

China State Administration for Industry and Commerce investigation

In 2014, Microsoft was informed that China’s State Administration for Industry and Commerce (“SAIC”) had begun a formal investigation relating to China’s Anti-Monopoly Law, and the SAIC conducted onsite inspections of Microsoft offices in Beijing, Shanghai, Guangzhou, and Chengdu. SAIC has stated the investigation relates to compatibility, bundle sales, file verification issues related to Windows and Office software, and potentially other issues.

Product-Related Litigation

U.S. cell phone litigation

Nokia, along with other handset manufacturers and network operators, is a defendant in 19 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 as part of our acquisition of 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 10 cases are stayed. In a separate 2009 decision, the Court of Appeals for the District of Columbia held that adverse health effect claims arising from the use of cellular handsets that operate within the U.S. Federal Communications Commission radio frequency emission guidelines (“FCC Guidelines”) are pre-empted by federal law. The plaintiffs allege that their handsets either operated outside the FCC Guidelines or were manufactured before the FCC Guidelines went into effect. The lawsuits also allege an industry-wide conspiracy to manipulate the science and testing around emission guidelines.

In 2013, defendants in the consolidated cases moved to exclude plaintiffs’ expert evidence of general causation on the basis of flawed scientific methodologies. In 2014, the trial court granted in part and denied in part defendants’ motion to exclude plaintiffs’ general causation experts. The defendants filed an interlocutory appeal challenging the standard for evaluating expert scientific evidence, which the District of Columbia Court of Appeals heard en banc. In October 2016, the Court of Appeals issued its decision adopting the standard advocated by defendants and remanding the cases to the trial court for further proceedings under that standard. Plaintiffs have filed a motion to reopen discovery and file additional expert evidence.

Canadian cell phone class action

Nokia, along with other handset manufacturers and network operators, is a defendant in a 2013 class action lawsuit filed in the Supreme Court of British Columbia by a purported class of Canadians who have used cellular phones for at least 1,600 hours, including a subclass of users with brain tumors. Microsoft was served with the complaint in June 2014 and has been substituted for the Nokia defendants. The litigation has been dormant for more than two years.

Other Contingencies

We also are subject to a variety of other claims and suits that arise from time to time in the ordinary course of our business. Although management currently believes that resolving claims against us, individually or in aggregate, will not have a material adverse impact on our consolidated financial statements, these matters are subject to inherent uncertainties and management’s view of these matters may change in the future.

As of December 31, 2016, we accrued aggregate legal liabilities of $415 million. While we intend to defend these matters vigorously, adverse outcomes that we estimate could reach approximately $1.5 billion in aggregate beyond recorded amounts are reasonably possible. Were unfavorable final outcomes to occur, there exists the possibility of a material adverse impact on our consolidated financial statements for the period in which the effects become reasonably estimable.

STOCKHOLDERS' EQUITY

6 Months Ended

Dec. 31, 2016

STOCKHOLDERS' EQUITY

NOTE 16 — STOCKHOLDERS’ EQUITY

Share Repurchases

On September 16, 2013, our Board of Directors approved a share repurchase program authorizing up to $40.0 billion in share repurchases. This share repurchase program became effective on October 1, 2013, and was completed on December 22, 2016. All repurchases were made using cash resources.

On September 20, 2016, our Board of Directors approved a share repurchase program authorizing an additional $40.0 billion in share repurchases. This share repurchase program commenced on December 22, 2016 following completion of the prior program approved on September 16, 2013, has no expiration date, and may be suspended or discontinued at any time without notice. As of December 31, 2016, no shares had been repurchased under this $40.0 billion share repurchase program.

We repurchased the following shares of our common stock through our share repurchase program approved on September 16, 2013:

(In millions)	Three Months Ended December 31,				Six Months Ended December 31,


	2016		2015		2016		2015

Shares of common stock repurchased		59		66		122		155
Value of common stock repurchased	$	3,533	$	3,600	$	7,083	$	7,600

The above table excludes shares repurchased to settle statutory employee tax withholding related to the vesting of stock awards.

Dividends

Our Board of Directors declared the following dividends:

Declaration Date

Dividend

Per Share

Record Date

Total Amount

Payment Date

(in millions)

Fiscal year 2017

September 20, 2016

0.39

November 17, 2016

3,024

December 8, 2016

November 30, 2016

0.39

February 16, 2017

3,014

March 9, 2017

Declaration Date

Dividend

Per Share

Record Date

Total Amount

Payment Date

(in millions)

Fiscal year 2016

September 15, 2015

0.36

November 19, 2015

2,868

December 10, 2015

December 2, 2015

0.36

February 18, 2016

2,842

March 10, 2016

The dividend declared on November 30, 2016 was included in other current liabilities as of December 31, 2016.

- Definition

The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 310
-SubTopic 10
-Section S99
-Paragraph 4
-Subparagraph (SAB Topic 4.E)
-URI http://asc.fasb.org/extlink&oid=27010918&loc=d3e74567-122707

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 4
-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21484-112644

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 210
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02(29))
-URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682

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+ Details

ACCUMULATED OTHER COMPREHENSIVE INCOME

6 Months Ended

Dec. 31, 2016

ACCUMULATED OTHER COMPREHENSIVE INCOME

NOTE 17 — ACCUMULATED OTHER COMPREHENSIVE INCOME

The following table summarizes the changes in accumulated other comprehensive income by component:

(In millions)	Three Months Ended December 31,						Six Months Ended December 31,


	2016			2015			2016			2015

Derivatives

Accumulated other comprehensive income balance, beginning of period	$	315		$	647		$	352		$	590
Unrealized gains, net of tax effects of $3, $15, $4, and $43		449			122			484			283

Reclassification adjustments for gains included in revenue		(172	)		(181	)		(247	)		(290	)
Tax expense included in provision for income taxes		3			10			6			15


Amounts reclassified from accumulated other comprehensive income		(169	)		(171	)		(241	)		(275	)


Net current period other comprehensive income (loss)		280			(49	)		243			8


Accumulated other comprehensive income balance, end of period	$	595		$	598		$	595		$	598


Investments

Accumulated other comprehensive income balance, beginning of period	$	3,024		$	2,598		$	2,941		$	3,169
Unrealized gains (losses), net of tax effects of $(292), $122, $(110), and $(183)		(543	)		228			(204	)		(338	)

Reclassification adjustments for gains included in other income (expense), net		(694	)		(104	)		(1,088	)		(112	)
Tax expense included in provision for income taxes		243			36			381			39


Amounts reclassified from accumulated other comprehensive income		(451	)		(68	)		(707	)		(73	)


Net current period other comprehensive income (loss)		(994	)		160			(911	)		(411	)


Accumulated other comprehensive income balance, end of period	$	2,030		$	2,758		$	2,030		$	2,758


Translation adjustments and other

Accumulated other comprehensive loss balance, beginning of period	$	(1,658	)	$	(1,507	)	$	(1,756	)	$	(1,237	)
Translation adjustments and other, net of tax effects of $0, $(9), $7, and $(21)		(455	)		(76	)		(357	)		(346	)


Accumulated other comprehensive loss balance, end of period	$	(2,113	)	$	(1,583	)	$	(2,113	)	$	(1,583	)


Accumulated other comprehensive income, end of period	$	512		$	1,773		$	512		$	1,773

- Definition

The entire disclosure for comprehensive income, which includes, but is not limited to, 1) the amount of income tax expense or benefit allocated to each component of other comprehensive income, including reclassification adjustments, 2) the reclassification adjustments for each classification of other comprehensive income and 3) the ending accumulated balances for each component of comprehensive income.

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+ Details

SEGMENT INFORMATION

6 Months Ended

Dec. 31, 2016

SEGMENT INFORMATION

NOTE 18 — SEGMENT INFORMATION

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 U.S. 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.

In December 2016, we completed our acquisition of LinkedIn. LinkedIn is reported as part of our Productivity and Business Processes segment. LinkedIn offers services that can be used by customers to transform the way they hire, market, sell, and learn on a global basis through Talent Solutions, Marketing Solutions, and Premium Subscriptions.

•

Talent Solutions is comprised of Hiring and Learning and Development. Hiring provides services to recruiters that enable them to attract, recruit, and hire talent. Learning and Development provides subscriptions to enterprises and individuals to online learning content.

•

Marketing Solutions enable enterprises and individuals to advertise to LinkedIn’s member base through relevant content. Advertising (consisting of content-based, graphic display, text link, and programmatic) is shown primarily on LinkedIn.com and its mobile applications.

•

Premium Subscriptions (inclusive of Sales Solutions) enable professionals to manage their professional identity, grow their network, and connect with talent.

Our reportable segments are described below.

Productivity and Business Processes

Our Productivity and Business Processes segment consists of products and services in our portfolio of productivity, communication, and information services, spanning a variety of devices and platforms. This segment primarily comprises:

•

Office Commercial, including volume licensing and subscriptions to Office 365 commercial for products and services such as Office, Exchange, SharePoint, and Skype for Business, and related Client Access Licenses (“CALs”).

•

Office Consumer, including Office sold through retail or through an Office 365 consumer subscription, and Office Consumer Services, including Skype, Outlook.com, and OneDrive.

•

Microsoft Dynamics (“Dynamics”) business solutions, including Dynamics ERP on-premises, Dynamics CRM on-premises, and Dynamics 365, a set of cloud-based applications across ERP and CRM.

•

LinkedIn, including Talent Solutions, Marketing Solutions, and Premium Subscriptions.

Intelligent Cloud

Our Intelligent Cloud segment consists of our public, private, and hybrid server products and cloud services that can power modern business. This segment primarily comprises:

•

Server products and cloud services, including Microsoft SQL Server, Windows Server, Visual Studio, System Center, and related CALs, as well as Azure.

•

Enterprise Services, including Premier Support Services and Microsoft Consulting Services.

More Personal Computing

Our More Personal Computing segment consists of products and services geared towards harmonizing the interests of end users, developers, and IT professionals across screens of all sizes. This segment primarily comprises:

•

Windows, including Windows original equipment manufacturer licensing and other non-volume licensing of the Windows operating system; Windows Commercial, comprising volume licensing of the Windows operating system, Windows cloud services, and other Windows commercial offerings; patent licensing; Windows Embedded; MSN display advertising; and Windows Phone licensing.

•

Devices, including Microsoft Surface, phones, and PC accessories.

•

Gaming, including Xbox hardware and Xbox software and services, comprising Xbox Live transactions, subscriptions, and advertising (“Xbox Live”), video games, and third-party video game royalties.

•

Search advertising.

Corporate and Other includes adjustments to conform our internal accounting policies to U.S. GAAP, and impairment, integration, and restructuring expenses. Significant internal accounting policies that differ from U.S. GAAP relate to Windows 10 revenue recognition.

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 on certain contracts is allocated among the segments based on the relative value of the underlying products and services, which can include allocation based on actual prices charged, prices when sold separately, or estimated costs plus a profit margin. Cost of revenue is allocated in certain cases based on a relative revenue methodology. Operating expenses that are allocated primarily include those relating to marketing of products and services from which multiple segments benefit, and are generally allocated based on relative gross margin.

In addition, certain costs incurred at a corporate level that are identifiable and that benefit our segments are allocated to them. These allocated costs include costs of: legal, including settlements, and fines; information technology; human resources; finance; excise taxes; field selling; shared facilities services; and customer service and support. Each allocation is measured differently based on the specific facts and circumstances of the costs being allocated. Certain corporate-level activity is not allocated to our segments, including impairment, integration, and restructuring expenses.

Segment revenue and operating income (loss) were as follows during the periods presented:

(In millions)	Three Months Ended December 31,						Six Months Ended December 31,


	2016			2015			2016			2015

Revenue

Productivity and Business Processes	$	7,382		$	6,690		$	14,040		$	12,996
Intelligent Cloud		6,861			6,343			13,243			12,235
More Personal Computing		11,823			12,473			21,117			21,935
Corporate and Other ^(a)		(1,976	)		(1,710	)		(3,857	)		(2,991	)


Total revenue	$	24,090		$	23,796		$	44,543		$	44,175

(In millions)	Three Months Ended December 31,						Six Months Ended December 31,


	2016			2015			2016			2015

Operating income (loss)

Productivity and Business Processes	$	3,256		$	3,292		$	6,376		$	6,448
Intelligent Cloud		2,398			2,568			4,456			4,959
More Personal Computing		2,499			1,876			4,427			3,403
Corporate and Other ^(a)		(1,976	)		(1,710	)		(3,857	)		(2,991	)


Total operating income	$	6,177		$	6,026		$	11,402		$	11,819

(a)	Corporate and Other revenue and operating loss for the three and six months ended December 31, 2016 and 2015 consisted of the net revenue deferral related to sales of Windows 10.

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, and 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.

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

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+ Details

ACCOUNTING POLICIES (Policies)

6 Months Ended

Dec. 31, 2016

Accounting Principles

We have recast certain prior period amounts to conform to the current period presentation, with no impact on consolidated net income or cash flows.

Principles of Consolidation

Estimates and Assumptions

Product Revenue and Service and Other Revenue

Recent Accounting Guidance Not Yet Adopted

Financial Instruments – Credit Losses

Leases

Financial Instruments – Recognition, Measurement, Presentation, and Disclosure

Revenue from Contracts with Customers

We continue to believe that the net change in Windows 10 revenue from period to period is indicative of the net change in revenue we expect from the adoption of the new standard.

Earnings Per Share Policy

Derivative Instruments Policy

Fair Value Measurements Policy

•

Segment Reporting Policy

EARNINGS PER SHARE (Tables)

6 Months Ended

Dec. 31, 2016

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,


	2016		2015		2016		2015

Net income available for common shareholders (A)	$	5,200	$	5,018	$	9,890	$	9,920


Weighted average outstanding shares of common stock (B)		7,755		7,964		7,772		7,980
Dilutive effect of stock-based awards		75		87		81		88


Common stock and common stock equivalents (C)		7,830		8,051		7,853		8,068


Earnings Per Share

Basic (A/B)	$	0.67	$	0.63	$	1.27	$	1.24
Diluted (A/C)	$	0.66	$	0.62	$	1.26	$	1.23

OTHER INCOME (EXPENSE), NET (Tables)

6 Months Ended

Dec. 31, 2016

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,


	2016			2015			2016			2015

Dividends and interest income	$	311		$	200		$	604		$	399
Interest expense		(521	)		(309	)		(958	)		(558	)
Net recognized gains on investments		698			106			1,103			108
Net losses on derivatives		(46	)		(156	)		(140	)		(259	)
Net gains (losses) on foreign currency remeasurements		(82	)		2			(134	)		(34	)
Other		(174	)		(14	)		(189	)		(107	)


Total	$	186		$	(171	)	$	286		$	(451	)

Net Recognized Gains (Losses) on Investments

Following are details of net recognized gains (losses) on investments during the periods reported:

(In millions)	Three Months Ended December 31,						Six Months Ended December 31,


	2016			2015			2016			2015

Other-than-temporary impairments of investments	$	(21	)	$	(127	)	$	(39	)	$	(162	)
Realized gains from sales of available-for-sale securities		851			351			1,334			458
Realized losses from sales of available-for-sale securities		(132	)		(118	)		(192	)		(188	)


Total	$	698		$	106		$	1,103		$	108

INVESTMENTS (Tables)

6 Months Ended

Dec. 31, 2016

Investment Components, Including Associated Derivatives but Excluding Held to Maturity Investments

The components of investments, including associated derivatives, but excluding held-to-maturity investments, were as follows:

(In millions)	Cost Basis		Unrealized Gains		Unrealized Losses			Recorded Basis		Cash and Cash Equivalents		Short-term Investments			Equity and Other Investments


December 31, 2016

Cash	$	4,037	$	0	$	0		$	4,037	$	4,037	$	0		$	0
Mutual funds		2,363		0		0			2,363		1,961		402			0
Commercial paper		177		0		0			177		77		100			0
Certificates of deposit		1,284		0		0			1,284		1,098		186			0
U.S. government and agency securities		100,128		27		(415	)		99,740		1,052		98,688			0
Foreign government bonds		4,747		3		(29	)		4,721		243		4,478			0
Mortgage- and asset-backed securities		4,361		12		(7	)		4,366		0		4,366			0
Corporate notes and bonds		5,736		64		(26	)		5,774		0		5,774			0
Municipal securities		283		39		0			322		0		322			0
Common and preferred stock		4,864		3,685		(160	)		8,389		0		0			8,389
Other investments		494		0		0			494		0		(3	)		497


Total	$	128,474	$	3,830	$	(637	)	$	131,667	$	8,468	$	114,313		$	8,886

(In millions)	Cost Basis		Unrealized Gains		Unrealized Losses			Recorded Basis		Cash and Cash Equivalents		Short-term Investments			Equity and Other Investments


June 30, 2016

Cash	$	3,501	$	0	$	0		$	3,501	$	3,501	$	0		$	0
Mutual funds		1,012		0		0			1,012		1,012		0			0
Commercial paper		298		0		0			298		298		0			0
Certificates of deposit		1,000		0		0			1,000		868		132			0
U.S. government and agency securities		89,970		245		(11	)		90,204		100		90,104			0
Foreign government bonds		5,502		10		(18	)		5,494		731		4,763			0
Mortgage- and asset-backed securities		4,789		21		(2	)		4,808		0		4,808			0
Corporate notes and bonds		6,509		110		(35	)		6,584		0		6,584			0
Municipal securities		285		57		0			342		0		342			0
Common and preferred stock		5,597		4,452		(236	)		9,813		0		0			9,813
Other investments		590		0		0			590		0		(3	)		593


Total	$	119,053	$	4,895	$	(302	)	$	123,646	$	6,510	$	106,730		$	10,406

Unrealized Losses on Investments

Investments with continuous unrealized losses for less than 12 months and 12 months or greater and their related fair values were as follows:

	Less than 12 Months					12 Months or Greater							Total Unrealized Losses


(In millions)	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Total Fair Value


December 31, 2016

U.S. government and agency securities	$	86,391	$	(403	)	$	375	$	(12	)	$	86,766	$	(415	)
Foreign government bonds		3,721		(10	)		35		(19	)		3,756		(29	)
Mortgage- and asset-backed securities		887		(6	)		199		(1	)		1,086		(7	)
Corporate notes and bonds		1,100		(14	)		408		(12	)		1,508		(26	)
Common and preferred stock		677		(71	)		407		(89	)		1,084		(160	)


Total	$	92,776	$	(504	)	$	1,424	$	(133	)	$	94,200	$	(637	)

	Less than 12 Months					12 Months or Greater							Total Unrealized Losses


(In millions)	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Total Fair Value


June 30, 2016

U.S. government and agency securities	$	5,816	$	(3	)	$	432	$	(8	)	$	6,248	$	(11	)
Foreign government bonds		3,452		(3	)		35		(15	)		3,487		(18	)
Mortgage- and asset-backed securities		844		(1	)		322		(1	)		1,166		(2	)
Corporate notes and bonds		1,180		(11	)		788		(24	)		1,968		(35	)
Common and preferred stock		896		(147	)		390		(89	)		1,286		(236	)


Total	$	12,188	$	(165	)	$	1,967	$	(137	)	$	14,155	$	(302	)

Debt Investment Maturities

(In millions)	Cost Basis		Estimated Fair Value


December 31, 2016

Due in one year or less	$	16,027	$	16,026
Due after one year through five years		94,925		94,669
Due after five years through 10 years		4,470		4,402
Due after 10 years		1,294		1,287


Total	$	116,716	$	116,384

DERIVATIVES (Tables)

6 Months Ended

Dec. 31, 2016

Fair Values of Derivative Instruments

	December 31, 2016												June 30, 2016


	Assets									Liabilities			Assets									Liabilities


(In millions)	Short-term Investments			Other Current Assets			Equity and Other Investments			Other Current Liabilities			Short-term Investments			Other Current Assets			Equity and Other Investments			Other Current Liabilities


Non-designated Hedge Derivatives

Foreign exchange contracts	$	23		$	229		$	0		$	(238	)	$	33		$	156		$	0		$	(296	)
Equity contracts		20			0			0			(4	)		23			0			0			(16	)
Interest rate contracts		5			0			0			(5	)		10			0			0			(25	)
Credit contracts		6			0			0			(3	)		6			0			0			(5	)
Commodity contracts		1			0			0			0			0			0			0			0


Total	$	55		$	229		$	0		$	(250	)	$	72		$	156		$	0		$	(342	)


Designated Hedge Derivatives

Foreign exchange contracts	$	293		$	543		$	0		$	0		$	1		$	392		$	0		$	(263	)
Equity contracts		0			0			1			(26	)		0			0			18			(25	)


Total	$	293		$	543		$	1		$	(26	)	$	1		$	392		$	18		$	(288	)


Total gross amounts of derivatives	$	348		$	772		$	1		$	(276	)	$	73		$	548		$	18		$	(630	)


Gross derivatives either offset or subject to an enforceable master netting agreement	$	348		$	772		$	1		$	(275	)	$	69		$	548		$	18		$	(630	)
Gross amounts of derivatives offset on the balance sheet		(2	)		(227	)		(25	)		251			(74	)		(302	)		(25	)		398


Net amounts presented on the balance sheet		346			545			(24	)		(24	)		(5	)		246			(7	)		(232	)
Gross amounts of derivatives not offset on the balance sheet		0			0			0			(1	)		0			0			0			0
Cash collateral received		0			0			0			(548	)		0			0			0			(250	)


Net amount	$	346		$	545		$	(24	)	$	(573	)	$	(5	)	$	246		$	(7	)	$	(482	)

Non-designated Hedge Derivatives

Gains (Losses) on Derivative Instruments


(In millions)	Three Months Ended December 31,						Six Months Ended December 31,


	2016			2015			2016			2015

Foreign exchange contracts	$	26		$	(134	)	$	(5	)	$	(75	)
Equity contracts		(25	)		(30	)		(42	)		4
Interest-rate contracts		(10	)		9			(6	)		8
Credit contracts		2			2			4			(3	)
Commodity contracts		22			(52	)		0			(136	)


Total	$	15		$	(205	)	$	(49	)	$	(202	)

Fair value hedging

Gains (Losses) on Derivative Instruments

We recognized in other income (expense), net the following gains (losses) on contracts designated as fair-value hedges and their related hedged items:

(In millions)	Three Months Ended December 31,						Six Months Ended December 31,


	2016			2015			2016			2015

Foreign Exchange Contracts

Derivatives	$	685		$	48		$	637		$	(33	)
Hedged items		(674	)		(41	)		(606	)		50


Total amount of ineffectiveness	$	11		$	7		$	31		$	17


Equity Contracts

Derivatives	$	(7	)	$	(59	)	$	(17	)	$	(92	)
Hedged items		7			59			17			92


Total amount of ineffectiveness	$	0		$	0		$	0		$	0


Amount of equity contracts excluded from effectiveness assessment	$	(1	)	$	(15	)	$	(4	)	$	4

Cash flow hedging

Gains (Losses) on Derivative Instruments

We recognized the following gains (losses) on foreign exchange contracts designated as cash-flow hedges:

(In millions)	Three Months Ended December 31,						Six Months Ended December 31,


	2016			2015			2016			2015

Effective Portion

Gains recognized in other comprehensive income (net of tax effects of $3, $15, $4, and $43)	$	449		$	122		$	484		$	283
Gains reclassified from accumulated other comprehensive income into revenue		172			181			247			290

Amount Excluded from Effectiveness Assessment and Ineffective Portion

Losses recognized in other income (expense), net		(84	)		(72	)		(154	)		(154	)

FAIR VALUE MEASUREMENTS (Tables)

6 Months Ended

Dec. 31, 2016

Assets and Liabilities Measured at Fair Value on Recurring Basis

The following tables present the fair value of our financial instruments that are measured at fair value on a recurring basis:

(In millions)		Level 1		Level 2		Level 3		Gross Fair Value		Netting	^(a)		Net Fair Value


December 31, 2016

Assets

Mutual funds	$	2,363	$	0	$	0	$	2,363	$	0		$	2,363
Commercial paper		0		177		0		177		0			177
Certificates of deposit		0		1,284		0		1,284		0			1,284
U.S. government and agency securities		93,744		5,996		0		99,740		0			99,740
Foreign government bonds		12		4,398		0		4,410		0			4,410
Mortgage- and asset-backed securities		0		4,366		0		4,366		0			4,366
Corporate notes and bonds		0		5,736		1		5,737		0			5,737
Municipal securities		0		322		0		322		0			322
Common and preferred stock		5,750		1,833		18		7,601		0			7,601
Derivatives		5		1,116		0		1,121		(254	)		867


Total	$	101,874	$	25,228	$	19	$	127,121	$	(254	)	$	126,867


Liabilities

Derivatives and other	$	1	$	275	$	23	$	299	$	(251	)	$	48

(In millions)		Level 1		Level 2		Level 3		Gross Fair Value		Netting	^(a)		Net Fair Value


June 30, 2016

Assets

Mutual funds	$	1,012	$	0	$	0	$	1,012	$	0		$	1,012
Commercial paper		0		298		0		298		0			298
Certificates of deposit		0		1,000		0		1,000		0			1,000
U.S. government and agency securities		86,492		3,707		0		90,199		0			90,199
Foreign government bonds		10		5,705		0		5,715		0			5,715
Mortgage- and asset-backed securities		0		4,803		0		4,803		0			4,803
Corporate notes and bonds		0		6,361		1		6,362		0			6,362
Municipal securities		0		342		0		342		0			342
Common and preferred stock		6,918		2,114		18		9,050		0			9,050
Derivatives		6		633		0		639		(401	)		238


Total	$	94,438	$	24,963	$	19	$	119,420	$	(401	)	$	119,019


Liabilities

Derivatives and other	$	17	$	613	$	0	$	630	$	(398	)	$	232

(a)	These amounts represent the impact of netting derivative assets and derivative liabilities when a legally enforceable master netting agreement exists and fair value adjustments related to our own credit risk and counterparty credit risk.

Reconciliation of Total Assets Measured at Fair Value on Recurring Basis to Balance Sheet Presentation

The following table reconciles the total “Net Fair Value” of assets above to the balance sheet presentation of these same assets in Note 4 – Investments.

(In millions)


December 31, 2016				June 30, 2016

Net fair value of assets measured at fair value on a recurring basis	$	126,867		$	119,019
Cash		4,037			3,501
Common and preferred stock measured at fair value on a nonrecurring basis		815			767
Other investments measured at fair value on a nonrecurring basis		497			593
Less derivative net assets classified as other current assets		(545	)		(246	)
Other		(4	)		12


Recorded basis of investment components	$	131,667		$	123,646

INVENTORIES (Tables)

6 Months Ended

Dec. 31, 2016

Components of Inventories

The components of inventories were as follows:

(In millions)


	December 31, 2016		June 30, 2016

Raw materials	$	363	$	612
Work in process		98		158
Finished goods		1,500		1,481


Total	$	1,961	$	2,251

BUSINESS COMBINATIONS (Tables) - LinkedIn Corporation

6 Months Ended

Dec. 31, 2016

Major Classes of Assets and Liabilities to Which We Have Preliminarily Allocated the Purchase Price

The major classes of assets and liabilities to which we have preliminarily allocated the purchase price were as follows:

(In millions)


Cash and cash equivalents	$	1,328
Short-term investments		2,110
Other current assets		697
Property and equipment		1,565
Intangible assets		7,867
Goodwill ⁽^a⁾		16,813
Short-term debt ^(b)		(1,323	)
Other current liabilities		(1,120	)
Deferred income taxes		(808	)
Other		(132	)


Total purchase price	$	26,997

(a)	Goodwill was assigned to our Productivity and Business Processes segment. The goodwill was primarily attributed to increased synergies that are expected to be achieved from the integration of LinkedIn. None of the goodwill is expected to be deductible for income tax purposes.

(b)

Acquired Intangible Assets

Following are the details of the purchase price allocated to the intangible assets acquired:

(In millions)	Amount		Weighted Average Life


Technology-based	$	2,109		3 years
Contract-based		23		5 years
Customer-related		3,587		7 years
Marketing-related (trade names)		2,148		20 years


Fair value of intangible assets acquired	$	7,867		9 years

Supplemental Consolidated Results on Unaudited Pro Forma Basis, as If the Acquisition Had Been Consummated on Beginning of Period

Following are the supplemental consolidated results of Microsoft Corporation on an unaudited pro forma basis, as if the acquisition had been consummated on July 1, 2015:

(In millions, except earnings per share)	Three Months Ended December 31,				Six Months Ended December 31,


	2016		2015			2016		2015

Revenue	$	24,866	$	24,629	$	46,271	$	45,739
Net income	$	5,010	$	4,685	$	9,494	$	9,150
Diluted earnings per share	$	0.64	$	0.58	$	1.21	$	1.14

GOODWILL (Tables)

6 Months Ended

Dec. 31, 2016

Carrying Amount of Goodwill

Changes in the carrying amount of goodwill were as follows:

(In millions)	June 30, 2016		Acquisitions			Other			December 31, 2016


Productivity and Business Processes	$	6,678	$	16,816	^(a)	$	(38	)	$	23,456
Intelligent Cloud		5,467		0			1			5,468
More Personal Computing		5,727		14			(141	)		5,600


Total	$	17,872	$	16,830		$	(178	)	$	34,524

(a)	Includes goodwill related to LinkedIn and other acquisitions. See Note 8 – Business Combinations for further information.

INTANGIBLE ASSETS (Tables)

6 Months Ended

Dec. 31, 2016

Finite-Lived Intangible Assets

The components of intangible assets, all of which are finite-lived, were as follows:

(In millions)	Gross Carrying Amount			Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount


	December 31, 2016								June 30, 2016

Technology-based ^(a)	$	7,619		$	(3,604	)	$	4,015	$	5,970	$	(3,648	)	$	2,322
Marketing-related		3,983			(691	)		3,292		1,869		(616	)		1,253
Contract-based		801			(709	)		92		796		(718	)		78
Customer-related		4,023			(421	)		3,602		465		(385	)		80


Total	$	16,426	^(b)	$	(5,425	)	$	11,001	$	9,100	$	(5,367	)	$	3,733

(a)	Technology-based intangible assets included $87 million and $115 million of net carrying amount of software to be sold, leased, or otherwise marketed as of December 31, 2016 and June 30, 2016, respectively.

(b)	Includes intangible assets related to LinkedIn and other additions. See Note 8 – Business Combinations for further information.

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, 2016:

(In millions)


Year Ending June 30,

2017 (excluding the six months ended December 31, 2016)	$	1,103
2018		2,167
2019		1,688
2020		1,168
2021		978
Thereafter		3,897


Total	$	11,001

DEBT (Tables)

6 Months Ended

Dec. 31, 2016

Long-term Debt

The components of our long-term debt, including the current portion, and the associated interest rates were as follows as of December 31, 2016 and June 30, 2016:

Due Date	Face Value December 31, 2016		Face Value June 30, 2016		Stated Interest Rate		Effective Interest Rate


	(In millions)

Notes

November 15, 2017		600		600		0.875%		1.084%
May 1, 2018		450		450		1.000%		1.106%
November 3, 2018		1,750		1,750		1.300%		1.396%
December 6, 2018		1,250		1,250		1.625%		1.824%
June 1, 2019		1,000		1,000		4.200%		4.379%
August 8, 2019 ^(a)		2,500		*		1.100%		1.203%
November 1, 2019 ^(c)		18		*		0.500%		0.500%
February 12, 2020		1,500		1,500		1.850%		1.935%
October 1, 2020		1,000		1,000		3.000%		3.137%
November 3, 2020		2,250		2,250		2.000%		2.093%
February 8, 2021		500		500		4.000%		4.082%
August 8, 2021 ^(a)		2,750		*		1.550%		1.642%
December 6, 2021 ^(b)		1,846		1,944		2.125%		2.233%
February 12, 2022		1,500		1,500		2.375%		2.466%
November 3, 2022		1,000		1,000		2.650%		2.717%
November 15, 2022		750		750		2.125%		2.239%
May 1, 2023		1,000		1,000		2.375%		2.465%
August 8, 2023 ^(a)		1,500		*		2.000%		2.101%
December 15, 2023		1,500		1,500		3.625%		3.726%
February 12, 2025		2,250		2,250		2.700%		2.772%
November 3, 2025		3,000		3,000		3.125%		3.176%
August 8, 2026 ^(a)		4,000		*		2.400%		2.464%
December 6, 2028 ^(b)		1,846		1,944		3.125%		3.218%
May 2, 2033 ^(b)		580		611		2.625%		2.690%
February 12, 2035		1,500		1,500		3.500%		3.604%
November 3, 2035		1,000		1,000		4.200%		4.260%
August 8, 2036 ^(a)		2,250		*		3.450%		3.510%
June 1, 2039		750		750		5.200%		5.240%
October 1, 2040		1,000		1,000		4.500%		4.567%
February 8, 2041		1,000		1,000		5.300%		5.361%
November 15, 2042		900		900		3.500%		3.571%
May 1, 2043		500		500		3.750%		3.829%
December 15, 2043		500		500		4.875%		4.918%
February 12, 2045		1,750		1,750		3.750%		3.800%
November 3, 2045		3,000		3,000		4.450%		4.492%
August 8, 2046 ^(a)		4,500		*		3.700%		3.743%
February 12, 2055		2,250		2,250		4.000%		4.063%
November 3, 2055		1,000		1,000		4.750%		4.782%
August 8, 2056 ^(a)		2,250		*		3.950%		4.033%


Total	$	60,490	$	40,949

(a)	In August 2016, we issued $19.8 billion of debt securities.

(b)	Euro-denominated debt securities.

(c)	Remaining notes that were acquired as part of the LinkedIn acquisition. See Note 8 – Business combinations for further information.

*	Not applicable

- Definition

Tabular disclosure of long-debt instruments or arrangements, including identification, terms, features, collateral requirements and other information necessary to a fair presentation. These are debt arrangements that originally required repayment more than twelve months after issuance or greater than the normal operating cycle of the entity, if longer.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
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-Name Accounting Standards Codification
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-Section S99
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Reference 2: http://www.xbrl.org/2003/role/presentationRef
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Reference 3: http://www.xbrl.org/2003/role/presentationRef
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-URI http://asc.fasb.org/extlink&oid=6479336&loc=d3e64711-112823

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
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-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08.(e),(f))
-URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690

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-Name Accounting Standards Codification
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-Section 55
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-URI http://asc.fasb.org/extlink&oid=64930739&loc=d3e28878-108400

Reference 6: http://www.xbrl.org/2003/role/presentationRef
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-Name Accounting Standards Codification
-Topic 505
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-Section 50
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-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21538-112644

Reference 7: http://www.xbrl.org/2003/role/presentationRef
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-Name Accounting Standards Codification
-Topic 505
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Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 835
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-URI http://asc.fasb.org/extlink&oid=64930785&loc=d3e28541-108399

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 835
-SubTopic 30
-Section 45
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=64930785&loc=d3e28551-108399

Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 7
-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21521-112644

+ Details

RESTRUCTURING CHARGES (Tables)

6 Months Ended

Dec. 31, 2016

Changes in Restructuring Liability

Changes in the restructuring liability were as follows:

(In millions)		Severance			Other	^(a)		Total


Restructuring liability as of June 30, 2016	$	470		$	239		$	709
Restructuring charges		0			0			0
Cash paid		(250	)		(35	)		(285	)
Other		(7	)		(4	)		(11	)


Restructuring liability as of December 31, 2016	$	213		$	200		$	413

(a)	“Other” primarily reflects activities associated with the consolidation of our facilities and manufacturing operations, including contract termination costs and asset write-downs.

UNEARNED REVENUE (Tables)

6 Months Ended

Dec. 31, 2016

Unearned Revenue by Segment

Unearned revenue by segment was as follows:

(In millions)


	December 31, 2016		June 30, 2016

Productivity and Business Processes	$	11,447	$	12,497
Intelligent Cloud		9,749		11,472
More Personal Computing		3,034		3,334
Corporate and Other		10,450		6,606


Total	$	34,680	$	33,909

COMMITMENTS AND CONTINGENCIES (Tables)

6 Months Ended

Dec. 31, 2016

Future Minimum Lease Payments under Non-cancellable Capital Leases

Future minimum lease payments under non-cancellable capital leases as of December 31, 2016 are as follows:

(In millions)


Year Ending June 30,

2017 (excluding the six months ended December 31, 2016)	$	62
2018		126
2019		129
2020		133
2021		136
Thereafter		1,529


Total ^(a)	$	2,115

(a)	As of December 31, 2016, capital leases included imputed interest of $581 million.

STOCKHOLDERS' EQUITY (Tables)

6 Months Ended

Dec. 31, 2016

Share Repurchases

We repurchased the following shares of our common stock through our share repurchase program approved on September 16, 2013:

(In millions)	Three Months Ended December 31,				Six Months Ended December 31,


	2016		2015		2016		2015

Shares of common stock repurchased		59		66		122		155
Value of common stock repurchased	$	3,533	$	3,600	$	7,083	$	7,600

Dividends Declared

Our Board of Directors declared the following dividends:

Declaration Date

Dividend

Per Share

Record Date

Total Amount

Payment Date

(in millions)

Fiscal year 2017

September 20, 2016

0.39

November 17, 2016

3,024

December 8, 2016

November 30, 2016

0.39

February 16, 2017

3,014

March 9, 2017

Declaration Date

Dividend

Per Share

Record Date

Total Amount

Payment Date

(in millions)

Fiscal year 2016

September 15, 2015

0.36

November 19, 2015

2,868

December 10, 2015

December 2, 2015

0.36

February 18, 2016

2,842

March 10, 2016

ACCUMULATED OTHER COMPREHENSIVE INCOME (Tables)

6 Months Ended

Dec. 31, 2016

Summary of Changes in Accumulated Other Comprehensive Income by Component

The following table summarizes the changes in accumulated other comprehensive income by component:

(In millions)	Three Months Ended December 31,						Six Months Ended December 31,


	2016			2015			2016			2015

Derivatives

Accumulated other comprehensive income balance, beginning of period	$	315		$	647		$	352		$	590
Unrealized gains, net of tax effects of $3, $15, $4, and $43		449			122			484			283

Reclassification adjustments for gains included in revenue		(172	)		(181	)		(247	)		(290	)
Tax expense included in provision for income taxes		3			10			6			15


Amounts reclassified from accumulated other comprehensive income		(169	)		(171	)		(241	)		(275	)


Net current period other comprehensive income (loss)		280			(49	)		243			8


Accumulated other comprehensive income balance, end of period	$	595		$	598		$	595		$	598


Investments

Accumulated other comprehensive income balance, beginning of period	$	3,024		$	2,598		$	2,941		$	3,169
Unrealized gains (losses), net of tax effects of $(292), $122, $(110), and $(183)		(543	)		228			(204	)		(338	)

Reclassification adjustments for gains included in other income (expense), net		(694	)		(104	)		(1,088	)		(112	)
Tax expense included in provision for income taxes		243			36			381			39


Amounts reclassified from accumulated other comprehensive income		(451	)		(68	)		(707	)		(73	)


Net current period other comprehensive income (loss)		(994	)		160			(911	)		(411	)


Accumulated other comprehensive income balance, end of period	$	2,030		$	2,758		$	2,030		$	2,758


Translation adjustments and other

Accumulated other comprehensive loss balance, beginning of period	$	(1,658	)	$	(1,507	)	$	(1,756	)	$	(1,237	)
Translation adjustments and other, net of tax effects of $0, $(9), $7, and $(21)		(455	)		(76	)		(357	)		(346	)


Accumulated other comprehensive loss balance, end of period	$	(2,113	)	$	(1,583	)	$	(2,113	)	$	(1,583	)


Accumulated other comprehensive income, end of period	$	512		$	1,773		$	512		$	1,773

SEGMENT INFORMATION (Tables)

6 Months Ended

Dec. 31, 2016

Segment Revenue

(In millions)	Three Months Ended December 31,						Six Months Ended December 31,


	2016			2015			2016			2015

Revenue

Productivity and Business Processes	$	7,382		$	6,690		$	14,040		$	12,996
Intelligent Cloud		6,861			6,343			13,243			12,235
More Personal Computing		11,823			12,473			21,117			21,935
Corporate and Other ^(a)		(1,976	)		(1,710	)		(3,857	)		(2,991	)


Total revenue	$	24,090		$	23,796		$	44,543		$	44,175

(a)	Corporate and Other revenue and operating loss for the three and six months ended December 31, 2016 and 2015 consisted of the net revenue deferral related to sales of Windows 10.

Operating Income (Loss) by Segment

(In millions)	Three Months Ended December 31,						Six Months Ended December 31,


	2016			2015			2016			2015

Operating income (loss)

Productivity and Business Processes	$	3,256		$	3,292		$	6,376		$	6,448
Intelligent Cloud		2,398			2,568			4,456			4,959
More Personal Computing		2,499			1,876			4,427			3,403
Corporate and Other ^(a)		(1,976	)		(1,710	)		(3,857	)		(2,991	)


Total operating income	$	6,177		$	6,026		$	11,402		$	11,819

(a)	Corporate and Other revenue and operating loss for the three and six months ended December 31, 2016 and 2015 consisted of the net revenue deferral related to sales of Windows 10.

Basic and Diluted Earnings Per Share (Detail) - USD ($) $ / shares in Units, shares in Millions, $ in Millions	3 Months Ended		6 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2016	Dec. 31, 2015
Schedule of Earnings Per Share, Basic and Diluted, by Common Class [Line Items]
Net income available for common shareholders (A)	$ 5,200	$ 5,018	$ 9,890	$ 9,920
Weighted average outstanding shares of common stock (B)	7,755	7,964	7,772	7,980
Dilutive effect of stock-based awards	75	87	81	88
Common stock and common stock equivalents (C)	7,830	8,051	7,853	8,068
Earnings Per Share
Basic (A/B)	$ 0.67	$ 0.63	$ 1.27	$ 1.24
Diluted (A/C)	$ 0.66	$ 0.62	$ 1.26	$ 1.23

Components of Other Income (Expense), Net (Detail) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2016	Dec. 31, 2015
Components of Other Income (Expense) [Line Items]
Dividends and interest income	$ 311	$ 200	$ 604	$ 399
Interest expense	(521)	(309)	(958)	(558)
Net recognized gains on investments	698	106	1,103	108
Net losses on derivatives	(46)	(156)	(140)	(259)
Net gains (losses) on foreign currency remeasurements	(82)	2	(134)	(34)
Other	(174)	(14)	(189)	(107)
Total	$ 186	$ (171)	$ 286	$ (451)

- Definition

This item represents the net total realized and unrealized gain (loss) included in earnings for the period as a result of selling or holding marketable securities categorized as trading, available-for-sale, or held-to-maturity, including the unrealized holding gain (loss) of held-to-maturity securities transferred to the trading security category and the cumulative unrealized gain (loss) which was included in other comprehensive income (a separate component of shareholders' equity) for available-for-sale securities transferred to trading securities during the period. Additionally, this item would include any gains (losses) realized during the period from the sale of investments accounted for under the cost method of accounting and losses recognized for other than temporary impairments (OTTI) of the subject investments.

+ References + Details

Net Recognized Gains (Losses) on Investments (Detail) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2016	Dec. 31, 2015
Gains (Losses) on Investments [Line Items]
Other-than-temporary impairments of investments	$ (21)	$ (127)	$ (39)	$ (162)
Realized gains from sales of available-for-sale securities	851	351	1,334	458
Realized losses from sales of available-for-sale securities	(132)	(118)	(192)	(188)
Total	$ 698	$ 106	$ 1,103	$ 108

- Definition

+ References + Details

Investment Components, Including Associated Derivatives but Excluding Held to Maturity Investments (Detail) - USD ($) $ in Millions	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Dec. 31, 2015	Sep. 30, 2015	Jun. 30, 2015
Cash, Cash Equivalents and Investments [Line Items]
Cost Basis	$ 128,474		$ 119,053
Unrealized Gains	3,830		4,895
Unrealized Losses	(637)		(302)
Recorded Basis	131,667		123,646
Cash and cash equivalents	8,468	$ 13,928	6,510	$ 7,185	$ 5,431	$ 5,595
Short-term Investments	114,313		106,730
Equity and Other Investments	8,886		10,406
Cash
Cash, Cash Equivalents and Investments [Line Items]
Cash	4,037		3,501
Unrealized Gains	0		0
Unrealized Losses	0		0
Cash and cash equivalents	4,037		3,501
Short-term Investments	0		0
Equity and Other Investments	0		0
Mutual funds
Cash, Cash Equivalents and Investments [Line Items]
Cost Basis	2,363		1,012
Unrealized Gains	0		0
Unrealized Losses	0		0
Recorded Basis	2,363		1,012
Cash and cash equivalents	1,961		1,012
Short-term Investments	402		0
Equity and Other Investments	0		0
Commercial paper
Cash, Cash Equivalents and Investments [Line Items]
Cost Basis	177		298
Unrealized Gains	0		0
Unrealized Losses	0		0
Recorded Basis	177		298
Cash and cash equivalents	77		298
Short-term Investments	100		0
Equity and Other Investments	0		0
Certificates of deposit
Cash, Cash Equivalents and Investments [Line Items]
Cost Basis	1,284		1,000
Unrealized Gains	0		0
Unrealized Losses	0		0
Recorded Basis	1,284		1,000
Cash and cash equivalents	1,098		868
Short-term Investments	186		132
Equity and Other Investments	0		0
U.S. government and agency securities
Cash, Cash Equivalents and Investments [Line Items]
Cost Basis	100,128		89,970
Unrealized Gains	27		245
Unrealized Losses	(415)		(11)
Recorded Basis	99,740		90,204
Cash and cash equivalents	1,052		100
Short-term Investments	98,688		90,104
Equity and Other Investments	0		0
Foreign government bonds
Cash, Cash Equivalents and Investments [Line Items]
Cost Basis	4,747		5,502
Unrealized Gains	3		10
Unrealized Losses	(29)		(18)
Recorded Basis	4,721		5,494
Cash and cash equivalents	243		731
Short-term Investments	4,478		4,763
Equity and Other Investments	0		0
Mortgage- and asset-backed securities
Cash, Cash Equivalents and Investments [Line Items]
Cost Basis	4,361		4,789
Unrealized Gains	12		21
Unrealized Losses	(7)		(2)
Recorded Basis	4,366		4,808
Cash and cash equivalents	0		0
Short-term Investments	4,366		4,808
Equity and Other Investments	0		0
Corporate notes and bonds
Cash, Cash Equivalents and Investments [Line Items]
Cost Basis	5,736		6,509
Unrealized Gains	64		110
Unrealized Losses	(26)		(35)
Recorded Basis	5,774		6,584
Cash and cash equivalents	0		0
Short-term Investments	5,774		6,584
Equity and Other Investments	0		0
Municipal securities
Cash, Cash Equivalents and Investments [Line Items]
Cost Basis	283		285
Unrealized Gains	39		57
Unrealized Losses	0		0
Recorded Basis	322		342
Cash and cash equivalents	0		0
Short-term Investments	322		342
Equity and Other Investments	0		0
Common and preferred stock
Cash, Cash Equivalents and Investments [Line Items]
Cost Basis	4,864		5,597
Unrealized Gains	3,685		4,452
Unrealized Losses	(160)		(236)
Recorded Basis	8,389		9,813
Cash and cash equivalents	0		0
Short-term Investments	0		0
Equity and Other Investments	8,389		9,813
Other investments
Cash, Cash Equivalents and Investments [Line Items]
Cost Basis	494		590
Unrealized Gains	0		0
Unrealized Losses	0		0
Recorded Basis	494		590
Cash and cash equivalents	0		0
Short-term Investments	(3)		(3)
Equity and Other Investments	$ 497		$ 593

Investments - Cost Method - Additional Information (Detail) - USD ($) $ in Millions	Dec. 31, 2016	Jun. 30, 2016
Fair Value, Measurements, Nonrecurring
Schedule of Cost-method Investments [Line Items]
Recorded basis of common and preferred stock that are restricted for more than one year or are not publicly traded	$ 815	$ 767

Investments - Secured Borrowings and Loaned Securities - Additional Information (Detail) - USD ($) $ in Millions	Dec. 31, 2016	Jun. 30, 2016
Investment [Line Items]
Collateral received	$ 1,300	$ 294

Unrealized Losses on Investments (Detail) - USD ($) $ in Millions	Dec. 31, 2016	Jun. 30, 2016
Unrealized Losses on Investments [Line Items]
Less than 12 Months - Fair Value	$ 92,776	$ 12,188
Less than 12 Months - Unrealized Losses	(504)	(165)
12 Months or Greater - Fair Value	1,424	1,967
12 Months or Greater - Unrealized Losses	(133)	(137)
Total Fair Value	94,200	14,155
Total Unrealized Losses	(637)	(302)
U.S. government and agency securities
Unrealized Losses on Investments [Line Items]
Less than 12 Months - Fair Value	86,391	5,816
Less than 12 Months - Unrealized Losses	(403)	(3)
12 Months or Greater - Fair Value	375	432
12 Months or Greater - Unrealized Losses	(12)	(8)
Total Fair Value	86,766	6,248
Total Unrealized Losses	(415)	(11)
Foreign government bonds
Unrealized Losses on Investments [Line Items]
Less than 12 Months - Fair Value	3,721	3,452
Less than 12 Months - Unrealized Losses	(10)	(3)
12 Months or Greater - Fair Value	35	35
12 Months or Greater - Unrealized Losses	(19)	(15)
Total Fair Value	3,756	3,487
Total Unrealized Losses	(29)	(18)
Mortgage- and asset-backed securities
Unrealized Losses on Investments [Line Items]
Less than 12 Months - Fair Value	887	844
Less than 12 Months - Unrealized Losses	(6)	(1)
12 Months or Greater - Fair Value	199	322
12 Months or Greater - Unrealized Losses	(1)	(1)
Total Fair Value	1,086	1,166
Total Unrealized Losses	(7)	(2)
Corporate notes and bonds
Unrealized Losses on Investments [Line Items]
Less than 12 Months - Fair Value	1,100	1,180
Less than 12 Months - Unrealized Losses	(14)	(11)
12 Months or Greater - Fair Value	408	788
12 Months or Greater - Unrealized Losses	(12)	(24)
Total Fair Value	1,508	1,968
Total Unrealized Losses	(26)	(35)
Common and preferred stock
Unrealized Losses on Investments [Line Items]
Less than 12 Months - Fair Value	677	896
Less than 12 Months - Unrealized Losses	(71)	(147)
12 Months or Greater - Fair Value	407	390
12 Months or Greater - Unrealized Losses	(89)	(89)
Total Fair Value	1,084	1,286
Total Unrealized Losses	$ (160)	$ (236)

Debt Investment Maturities (Detail) $ in Millions	Dec. 31, 2016 USD ($)
Cost Basis
Due in one year or less	$ 16,027
Due after one year through five years	94,925
Due after five years through 10 years	4,470
Due after 10 years	1,294
Total	116,716
Estimated Fair Value
Due in one year or less	16,026
Due after one year through five years	94,669
Due after five years through 10 years	4,402
Due after 10 years	1,287
Total	$ 116,384

Derivatives - Additional Information (Detail) - USD ($)	6 Months Ended
Derivatives - Additional Information (Detail) - USD ($)	Dec. 31, 2016	Jun. 30, 2016
Derivative [Line Items]
Maximum length of time hedged in cash flow hedge	3 years
Minimum required liquidity under certain counterparty agreements	$ 1,000,000,000
Minimum liquidity for the period as defined by certain counterparty agreements	1,000,000,000
Estimated derivative net gains (losses) included in AOCI that will be reclassified into earnings within 12 months	$ 490,000,000
Senior Unsecured Obligations
Derivative [Line Items]
Debt instrument credit rating	AAA
Derivatives Sold \| Foreign Exchange Contracts \| Non-designated Hedge Derivatives
Derivative [Line Items]
Notional amounts	$ 8,800,000,000	$ 11,700,000,000
Derivatives Sold \| Equity Contracts
Derivative [Line Items]
Notional amounts	1,800,000,000	2,200,000,000
Derivatives Sold \| Equity Contracts \| Designated Hedge Derivatives
Derivative [Line Items]
Notional amounts	764,000,000	986,000,000
Derivatives Sold \| Interest Rate Contracts \| Non-designated Hedge Derivatives
Derivative [Line Items]
Notional amounts	520,000,000	2,400,000,000
Derivatives Sold \| Credit Contracts \| Non-designated Hedge Derivatives
Derivative [Line Items]
Notional amounts	144,000,000	273,000,000
Derivatives Sold \| Commodity Contracts \| Non-designated Hedge Derivatives
Derivative [Line Items]
Notional amounts	157,000,000	162,000,000
Derivatives Sold \| Cash flow hedging \| Foreign Exchange Contracts
Derivative [Line Items]
Notional amounts	6,700,000,000	8,400,000,000
Derivatives Sold \| Fair value hedging \| Foreign Exchange Contracts
Derivative [Line Items]
Notional amounts	4,500,000,000	5,300,000,000
Derivatives Purchased \| Foreign Exchange Contracts \| Non-designated Hedge Derivatives
Derivative [Line Items]
Notional amounts	7,800,000,000	12,000,000,000
Derivatives Purchased \| Equity Contracts
Derivative [Line Items]
Notional amounts	1,200,000,000	1,300,000,000
Derivatives Purchased \| Equity Contracts \| Designated Hedge Derivatives
Derivative [Line Items]
Notional amounts	567,000,000	737,000,000
Derivatives Purchased \| Interest Rate Contracts \| Non-designated Hedge Derivatives
Derivative [Line Items]
Notional amounts	453,000,000	328,000,000
Derivatives Purchased \| Mortgage-backed securities \| Non-designated Hedge Derivatives
Derivative [Line Items]
Notional amounts	570,000,000	548,000,000
Derivatives Purchased \| Credit Contracts \| Non-designated Hedge Derivatives
Derivative [Line Items]
Notional amounts	359,000,000	440,000,000
Derivatives Purchased \| Commodity Contracts \| Non-designated Hedge Derivatives
Derivative [Line Items]
Notional amounts	$ 542,000,000	$ 631,000,000

Fair Values of Derivative Instruments (Detail) - USD ($) $ in Millions	Dec. 31, 2016	Jun. 30, 2016
Short-term Investments
Derivatives, Fair Value [Line Items]
Derivative Assets	$ 348	$ 73
Net amount, assets	346	(5)
Short-term Investments \| Eligible for Offsetting
Derivatives, Fair Value [Line Items]
Derivative Assets	348	69
Gross amounts of derivatives offset on the balance sheet, assets	(2)	(74)
Net amounts presented on the balance sheet, assets	346	(5)
Gross amounts of derivatives not offset on the balance sheet, assets	0	0
Cash collateral received, assets	0	0
Short-term Investments \| Non-designated Hedge Derivatives
Derivatives, Fair Value [Line Items]
Derivative Assets	55	72
Short-term Investments \| Non-designated Hedge Derivatives \| Foreign Exchange Contracts
Derivatives, Fair Value [Line Items]
Derivative Assets	23	33
Short-term Investments \| Non-designated Hedge Derivatives \| Equity Contracts
Derivatives, Fair Value [Line Items]
Derivative Assets	20	23
Short-term Investments \| Non-designated Hedge Derivatives \| Interest Rate Contracts
Derivatives, Fair Value [Line Items]
Derivative Assets	5	10
Short-term Investments \| Non-designated Hedge Derivatives \| Credit Contracts
Derivatives, Fair Value [Line Items]
Derivative Assets	6	6
Short-term Investments \| Non-designated Hedge Derivatives \| Commodity Contracts
Derivatives, Fair Value [Line Items]
Derivative Assets	1	0
Short-term Investments \| Designated Hedge Derivatives
Derivatives, Fair Value [Line Items]
Derivative Assets	293	1
Short-term Investments \| Designated Hedge Derivatives \| Foreign Exchange Contracts
Derivatives, Fair Value [Line Items]
Derivative Assets	293	1
Short-term Investments \| Designated Hedge Derivatives \| Equity Contracts
Derivatives, Fair Value [Line Items]
Derivative Assets	0	0
Other Current Assets
Derivatives, Fair Value [Line Items]
Derivative Assets	772	548
Net amount, assets	545	246
Other Current Assets \| Eligible for Offsetting
Derivatives, Fair Value [Line Items]
Derivative Assets	772	548
Gross amounts of derivatives offset on the balance sheet, assets	(227)	(302)
Net amounts presented on the balance sheet, assets	545	246
Gross amounts of derivatives not offset on the balance sheet, assets	0	0
Cash collateral received, assets	0	0
Other Current Assets \| Non-designated Hedge Derivatives
Derivatives, Fair Value [Line Items]
Derivative Assets	229	156
Other Current Assets \| Non-designated Hedge Derivatives \| Foreign Exchange Contracts
Derivatives, Fair Value [Line Items]
Derivative Assets	229	156
Other Current Assets \| Non-designated Hedge Derivatives \| Equity Contracts
Derivatives, Fair Value [Line Items]
Derivative Assets	0	0
Other Current Assets \| Non-designated Hedge Derivatives \| Interest Rate Contracts
Derivatives, Fair Value [Line Items]
Derivative Assets	0	0
Other Current Assets \| Non-designated Hedge Derivatives \| Credit Contracts
Derivatives, Fair Value [Line Items]
Derivative Assets	0	0
Other Current Assets \| Non-designated Hedge Derivatives \| Commodity Contracts
Derivatives, Fair Value [Line Items]
Derivative Assets	0	0
Other Current Assets \| Designated Hedge Derivatives
Derivatives, Fair Value [Line Items]
Derivative Assets	543	392
Other Current Assets \| Designated Hedge Derivatives \| Foreign Exchange Contracts
Derivatives, Fair Value [Line Items]
Derivative Assets	543	392
Other Current Assets \| Designated Hedge Derivatives \| Equity Contracts
Derivatives, Fair Value [Line Items]
Derivative Assets	0	0
Equity and Other Investments
Derivatives, Fair Value [Line Items]
Derivative Assets	1	18
Net amount, assets	(24)	(7)
Equity and Other Investments \| Eligible for Offsetting
Derivatives, Fair Value [Line Items]
Derivative Assets	1	18
Gross amounts of derivatives offset on the balance sheet, assets	(25)	(25)
Net amounts presented on the balance sheet, assets	(24)	(7)
Gross amounts of derivatives not offset on the balance sheet, assets	0	0
Cash collateral received, assets	0	0
Equity and Other Investments \| Non-designated Hedge Derivatives
Derivatives, Fair Value [Line Items]
Derivative Assets	0	0
Equity and Other Investments \| Non-designated Hedge Derivatives \| Foreign Exchange Contracts
Derivatives, Fair Value [Line Items]
Derivative Assets	0	0
Equity and Other Investments \| Non-designated Hedge Derivatives \| Equity Contracts
Derivatives, Fair Value [Line Items]
Derivative Assets	0	0
Equity and Other Investments \| Non-designated Hedge Derivatives \| Interest Rate Contracts
Derivatives, Fair Value [Line Items]
Derivative Assets	0	0
Equity and Other Investments \| Non-designated Hedge Derivatives \| Credit Contracts
Derivatives, Fair Value [Line Items]
Derivative Assets	0	0
Equity and Other Investments \| Non-designated Hedge Derivatives \| Commodity Contracts
Derivatives, Fair Value [Line Items]
Derivative Assets	0	0
Equity and Other Investments \| Designated Hedge Derivatives
Derivatives, Fair Value [Line Items]
Derivative Assets	1	18
Equity and Other Investments \| Designated Hedge Derivatives \| Foreign Exchange Contracts
Derivatives, Fair Value [Line Items]
Derivative Assets	0	0
Equity and Other Investments \| Designated Hedge Derivatives \| Equity Contracts
Derivatives, Fair Value [Line Items]
Derivative Assets	1	18
Other Current Liabilities
Derivatives, Fair Value [Line Items]
Derivative Liabilities	(276)	(630)
Net amount, liabilities	(573)	(482)
Other Current Liabilities \| Eligible for Offsetting
Derivatives, Fair Value [Line Items]
Derivative Liabilities	(275)	(630)
Gross amounts of derivatives offset on the balance sheet, liabilities	251	398
Net amounts presented on the balance sheet, liabilities	(24)	(232)
Gross amounts of derivatives not offset on the balance sheet, liabilities	(1)	0
Cash collateral received, liabilities	(548)	(250)
Other Current Liabilities \| Non-designated Hedge Derivatives
Derivatives, Fair Value [Line Items]
Derivative Liabilities	(250)	(342)
Other Current Liabilities \| Non-designated Hedge Derivatives \| Foreign Exchange Contracts
Derivatives, Fair Value [Line Items]
Derivative Liabilities	(238)	(296)
Other Current Liabilities \| Non-designated Hedge Derivatives \| Equity Contracts
Derivatives, Fair Value [Line Items]
Derivative Liabilities	(4)	(16)
Other Current Liabilities \| Non-designated Hedge Derivatives \| Interest Rate Contracts
Derivatives, Fair Value [Line Items]
Derivative Liabilities	(5)	(25)
Other Current Liabilities \| Non-designated Hedge Derivatives \| Credit Contracts
Derivatives, Fair Value [Line Items]
Derivative Liabilities	(3)	(5)
Other Current Liabilities \| Non-designated Hedge Derivatives \| Commodity Contracts
Derivatives, Fair Value [Line Items]
Derivative Liabilities	0	0
Other Current Liabilities \| Designated Hedge Derivatives
Derivatives, Fair Value [Line Items]
Derivative Liabilities	(26)	(288)
Other Current Liabilities \| Designated Hedge Derivatives \| Foreign Exchange Contracts
Derivatives, Fair Value [Line Items]
Derivative Liabilities	0	(263)
Other Current Liabilities \| Designated Hedge Derivatives \| Equity Contracts
Derivatives, Fair Value [Line Items]
Derivative Liabilities	$ (26)	$ (25)

Gains (Losses) on Fair Value Hedges and Related Hedged Items (Detail) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2016	Dec. 31, 2015
Foreign Exchange Contracts
Derivative Instruments, Gain (Loss) [Line Items]
Derivatives	$ 685	$ 48	$ 637	$ (33)
Hedged items	(674)	(41)	(606)	50
Total amount of ineffectiveness	11	7	31	17
Equity Contracts
Derivative Instruments, Gain (Loss) [Line Items]
Derivatives	(7)	(59)	(17)	(92)
Hedged items	7	59	17	92
Total amount of ineffectiveness	0	0	0	0
Amount of equity contracts excluded from effectiveness assessment	$ (1)	$ (15)	$ (4)	$ 4

Gains (Losses) Related to Cash Flow Hedges (Detail) - Designated Hedge Derivatives - Foreign Exchange Contracts - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2016	Dec. 31, 2015
Effective Portion
Gains recognized in other comprehensive income (net of tax effects of $3, $15, $4, and $43)	$ 449	$ 122	$ 484	$ 283
Gains reclassified from accumulated other comprehensive income into revenue	172	181	247	290
Amount Excluded from Effectiveness Assessment and Ineffective Portion
Losses recognized in other income (expense), net	$ (84)	$ (72)	$ (154)	$ (154)

Gains (Losses) Related to Cash Flow Hedges (Parenthetical) (Detail) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2016	Dec. 31, 2015
Designated Hedge Derivatives \| Foreign Exchange Contracts
Derivative Instruments, Gain (Loss) [Line Items]
Gains recognized in other comprehensive income, tax effects	$ 3	$ 15	$ 4	$ 43

Non-Designated Derivative Gains (Losses) (Detail) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2016	Dec. 31, 2015
Derivative Instruments, Gain (Loss) [Line Items]
Changes in fair value of derivatives not designated as hedges	$ 15	$ (205)	$ (49)	$ (202)
Foreign Exchange Contracts
Derivative Instruments, Gain (Loss) [Line Items]
Changes in fair value of derivatives not designated as hedges	26	(134)	(5)	(75)
Equity Contracts
Derivative Instruments, Gain (Loss) [Line Items]
Changes in fair value of derivatives not designated as hedges	(25)	(30)	(42)	4
Interest Rate Contracts
Derivative Instruments, Gain (Loss) [Line Items]
Changes in fair value of derivatives not designated as hedges	(10)	9	(6)	8
Credit Contracts
Derivative Instruments, Gain (Loss) [Line Items]
Changes in fair value of derivatives not designated as hedges	2	2	4	(3)
Commodity Contracts
Derivative Instruments, Gain (Loss) [Line Items]
Changes in fair value of derivatives not designated as hedges	$ 22	$ (52)	$ 0	$ (136)

Reconciliation of Total Assets Measured at Fair Value on Recurring Basis to Balance Sheet Presentation (Detail) - USD ($) $ in Millions	Dec. 31, 2016	Jun. 30, 2016
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Net fair value of assets measured at fair value on a recurring basis	$ 126,867	$ 119,019
Other liabilities	(4)
Other assets		12
Recorded basis of investment components	131,667	123,646
Other Current Assets
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Less derivative net assets classified as other current assets	(545)	(246)
Fair Value, Measurements, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash	4,037	3,501
Fair Value, Measurements, Nonrecurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Common and preferred stock measured at fair value on a nonrecurring basis	815	767
Other investments measured at fair value on a nonrecurring basis	$ 497	$ 593

Components of Inventories (Detail) - USD ($) $ in Millions	Dec. 31, 2016	Jun. 30, 2016
Inventory [Line Items]
Raw materials	$ 363	$ 612
Work in process	98	158
Finished goods	1,500	1,481
Total	$ 1,961	$ 2,251

Business Combinations - Additional Information (Detail) - LinkedIn Corporation - USD ($) $ in Millions		3 Months Ended	6 Months Ended
	Dec. 08, 2016	Dec. 31, 2016	Dec. 31, 2016
Business Acquisition [Line Items]
Acquisition date	Dec. 08, 2016
Name of acquired entity			LinkedIn
Total purchase price	$ 27,000
Cash paid to acquire the business	$ 26,400
Revenue since the acquisition		$ 228	$ 228
Operating loss since the acquisition		$ (201)	$ (201)

Major Classes of Assets and Liabilities to Which We Have Preliminarily Allocated the Purchase Price (Detail) - USD ($)
$ in Millions

Dec. 31, 2016

Dec. 08, 2016

Jun. 30, 2016

Business Acquisition [Line Items]

Goodwill

$ 34,524

$ 17,872

LinkedIn Corporation

Business Acquisition [Line Items]

Cash and cash equivalents

$ 1,328

Short-term investments

2,110

Other current assets

697

Property and equipment

1,565

Intangible assets

7,867

Goodwill

^[1]

16,813

Short-term debt

^[2]

(1,323)

Other current liabilities

(1,120)

Deferred income taxes

(808)

Other

(132)

Total purchase price

$ 26,997

[1]	Goodwill was assigned to our Productivity and Business Processes segment. The goodwill was primarily attributed to increased synergies that are expected to be achieved from the integration of LinkedIn. None of the goodwill is expected to be deductible for income tax purposes.
[2]	Convertible senior notes issued by LinkedIn on November 12, 2014, substantially all of which were redeemed prior to December 31, 2016. The remaining $18 million of notes are not redeemable and are included in long-term debt on our consolidated balance sheets. See Note 11 – Debt for further information.

Major Classes of Assets and Liabilities to Which We Have Preliminarily Allocated the Purchase Price (Parenthetical) (Detail) - USD ($)	Dec. 31, 2016	Dec. 08, 2016	Jun. 30, 2016
Business Acquisition [Line Items]
Business combination, long-term debt	$ 60,490,000,000		$ 40,949,000,000
LinkedIn Corporation
Business Acquisition [Line Items]
Goodwill expected to be deductible for income tax purposes		$ 0
Business combination, long-term debt	$ 18,000,000

Acquired Intangible Assets (Detail) - LinkedIn Corporation $ in Millions	Dec. 08, 2016 USD ($)
Acquired Finite-Lived Intangible Assets [Line Items]
Fair value of intangible assets acquired	$ 7,867
Weighted Average Life	9 years
Technology-based
Acquired Finite-Lived Intangible Assets [Line Items]
Fair value of intangible assets acquired	$ 2,109
Weighted Average Life	3 years
Contract-based
Acquired Finite-Lived Intangible Assets [Line Items]
Fair value of intangible assets acquired	$ 23
Weighted Average Life	5 years
Customer-related
Acquired Finite-Lived Intangible Assets [Line Items]
Fair value of intangible assets acquired	$ 3,587
Weighted Average Life	7 years
Marketing-related (trade names)
Acquired Finite-Lived Intangible Assets [Line Items]
Fair value of intangible assets acquired	$ 2,148
Weighted Average Life	20 years

Supplemental Consolidated Results on Unaudited Pro Forma Basis, as If the Acquisition Had Been Consummated on Beginning of Period (Detail) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended		6 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2016	Dec. 31, 2015
Business Acquisition [Line Items]
Revenue	$ 24,866	$ 24,629	$ 46,271	$ 45,739
Net income	$ 5,010	$ 4,685	$ 9,494	$ 9,150
Diluted earnings per share	$ 0.64	$ 0.58	$ 1.21	$ 1.14

Carrying Amount of Goodwill (Detail)
$ in Millions

6 Months Ended

Dec. 31, 2016

USD ($)

Goodwill [Line Items]

$ 17,872

16,830

(178)

34,524

Productivity and Business Processes

Goodwill [Line Items]

Beginning Balance

6,678

Acquisitions

16,816

^[1]

Other

(38)

Ending Balance

23,456

Intelligent Cloud

Goodwill [Line Items]

5,467

5,468

More Personal Computing

Goodwill [Line Items]

5,727

(141)

$ 5,600

[1]	Includes goodwill related to LinkedIn and other acquisitions. See Note 8 – Business Combinations for further information.

Finite-Lived Intangible Assets (Detail) - USD ($)
$ in Millions

Dec. 31, 2016

Jun. 30, 2016

Finite-Lived Intangible Assets [Line Items]

Gross Carrying Amount

$ 16,426

^[1]

$ 9,100

Accumulated Amortization

(5,425)

(5,367)

Net Carrying Amount

11,001

3,733

Technology-based

Finite-Lived Intangible Assets [Line Items]

Gross Carrying Amount

^[2]

7,619

5,970

Accumulated Amortization

^[2]

(3,604)

(3,648)

Net Carrying Amount

^[2]

4,015

2,322

Marketing-related

Finite-Lived Intangible Assets [Line Items]

Gross Carrying Amount

3,983

1,869

Accumulated Amortization

(691)

(616)

Net Carrying Amount

3,292

1,253

Contract-based

Finite-Lived Intangible Assets [Line Items]

Gross Carrying Amount

801

796

Accumulated Amortization

(709)

(718)

Net Carrying Amount

Customer-related

Finite-Lived Intangible Assets [Line Items]

Gross Carrying Amount

4,023

465

Accumulated Amortization

(421)

(385)

Net Carrying Amount

$ 3,602

$ 80

[1]	Includes intangible assets related to LinkedIn and other additions. See Note 8 – Business Combinations for further information.
[2]	Technology-based intangible assets included $87 million and $115 million of net carrying amount of software to be sold, leased, or otherwise marketed as of December 31, 2016 and June 30, 2016, respectively.

Finite-Lived Intangible Assets (Parenthetical) (Detail) - USD ($) $ in Millions	Dec. 31, 2016	Jun. 30, 2016
Technology-based
Finite-Lived Intangible Assets [Line Items]
Net carrying amount of software to be sold, leased, or otherwise marketed	$ 87	$ 115

Intangible Assets - Additional Information (Detail) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2016	Dec. 31, 2015
Finite-Lived Intangible Assets [Line Items]
Intangible assets amortization expense	$ 315	$ 249	$ 529	$ 491
Amortization of capitalized software	$ 14	$ 18	$ 28	$ 36

Estimated Future Amortization Expense Related to Intangible Assets (Detail) - USD ($) $ in Millions	Dec. 31, 2016	Jun. 30, 2016
Finite-Lived Intangible Assets [Line Items]
Year Ending June 30, 2017 (excluding the six months ended December 31, 2016)	$ 1,103
Year Ending June 30, 2018	2,167
Year Ending June 30, 2019	1,688
Year Ending June 30, 2020	1,168
Year Ending June 30, 2021	978
Thereafter	3,897
Net Carrying Amount	$ 11,001	$ 3,733

Debt - Additional Information (Detail) - USD ($)	6 Months Ended	12 Months Ended
Debt - Additional Information (Detail) - USD ($)	Dec. 31, 2016	Jun. 30, 2016
Debt Instrument [Line Items]
Commercial paper	$ 25,100,000,000	$ 12,900,000,000
Credit facility, financial covenant	As of December 31, 2016, we were in compliance with the only financial covenant in both credit agreements, which requires us to maintain a coverage ratio of at least three times earnings before interest, taxes, depreciation, and amortization to interest expense, as defined in the credit agreements.
Credit facility, drawn	$ 0	0
Long-term debt	59,900,000,000	40,600,000,000
Long-term debt fair value	60,800,000,000	44,000,000,000
Unamortized discount and debt issuance costs	585,000,000	$ 392,000,000
Credit Facility Expire on November 1st 2016
Debt Instrument [Line Items]
Credit facility	$ 5,000,000,000
Credit facility, expiration date	Nov. 01, 2016
Credit Facility Expire on November 14th 2018
Debt Instrument [Line Items]
Credit facility	$ 5,000,000,000
Credit facility, expiration date	Oct. 31, 2017
Credit Facility Expire on November Xx 20Xx
Debt Instrument [Line Items]
Credit facility	$ 5,000,000,000
Credit facility, expiration date	Nov. 14, 2018
Commercial paper
Debt Instrument [Line Items]
Commercial paper, weighted average interest rate	0.78%	0.43%
Commercial paper \| Lower Limit
Debt Instrument [Line Items]
Commercial paper, maturity term	43 days	1 day
Commercial paper \| Upper Limit
Debt Instrument [Line Items]
Commercial paper, maturity term	266 days	99 days

Long-term Debt (Detail) - USD ($)
$ in Millions

6 Months Ended

12 Months Ended

Dec. 31, 2016

Jun. 30, 2016

Debt Instrument [Line Items]

Face Value

$ 60,490

$ 40,949

Notes 0.875 Percent Due November 15th 2017

Debt Instrument [Line Items]

Debt maturity date

Nov. 15, 2017

Face Value

$ 600

Stated Interest Rate

0.875%

Effective Interest Rate

1.084%

Notes 1.0 Percent Due May 1st 2018

Debt Instrument [Line Items]

Debt maturity date

May 01, 2018

Face Value

$ 450

Stated Interest Rate

1.00%

Effective Interest Rate

1.106%

Notes 1.30 Percent Due November 3rd 2018

Debt Instrument [Line Items]

Debt maturity date

Nov. 03, 2018

Face Value

$ 1,750

Stated Interest Rate

1.30%

Effective Interest Rate

1.396%

Notes 1.625 Percent Due December 6th 2018

Debt Instrument [Line Items]

Debt maturity date

Dec. 06, 2018

Face Value

$ 1,250

Stated Interest Rate

1.625%

Effective Interest Rate

1.824%

Notes 4.2 Percent Due June 1st 2019

Debt Instrument [Line Items]

Debt maturity date

Jun. 01, 2019

Face Value

$ 1,000

Stated Interest Rate

4.20%

Effective Interest Rate

4.379%

Notes 1.1 Percent Due August 8th 2019

Debt Instrument [Line Items]

Debt maturity date

^[1]

Aug. 08, 2019

Face Value

^[1]

$ 2,500

Stated Interest Rate

^[1]

1.10%

Effective Interest Rate

^[1]

1.203%

Notes 0.500 Percent Due November 1st 2019

Debt Instrument [Line Items]

Debt maturity date

^[2]

Nov. 01, 2019

Face Value

^[2]

$ 18

Stated Interest Rate

^[2]

0.50%

Effective Interest Rate

^[2]

0.50%

Notes 1.850 Percent Due February 12th 2020

Debt Instrument [Line Items]

Debt maturity date

Feb. 12, 2020

Face Value

$ 1,500

Stated Interest Rate

1.85%

Effective Interest Rate

1.935%

Notes 3.0 Percent Due October 1st 2020

Debt Instrument [Line Items]

Debt maturity date

Oct. 01, 2020

Face Value

$ 1,000

Stated Interest Rate

3.00%

Effective Interest Rate

3.137%

Notes 2.0 Percent Due November 3rd 2020

Debt Instrument [Line Items]

Debt maturity date

Nov. 03, 2020

Face Value

$ 2,250

Stated Interest Rate

2.00%

Effective Interest Rate

2.093%

Notes 4.0 Percent Due February 8th 2021

Debt Instrument [Line Items]

Debt maturity date

Feb. 08, 2021

Face Value

$ 500

Stated Interest Rate

4.00%

Effective Interest Rate

4.082%

Notes 1.55 Percent Due August 8th 2021

Debt Instrument [Line Items]

Debt maturity date

^[1]

Aug. 08, 2021

Face Value

^[1]

$ 2,750

Stated Interest Rate

^[1]

1.55%

Effective Interest Rate

^[1]

1.642%

Notes 2.125 Percent Due December 6th 2021

Debt Instrument [Line Items]

Debt maturity date

^[3]

Dec. 06, 2021

Face Value

^[3]

$ 1,846

$ 1,944

Stated Interest Rate

^[3]

2.125%

Effective Interest Rate

^[3]

2.233%

Notes 2.375 Percent Due February 12th 2022

Debt Instrument [Line Items]

Debt maturity date

Feb. 12, 2022

Face Value

$ 1,500

Stated Interest Rate

2.375%

Effective Interest Rate

2.466%

Notes 2.65 Percent Due November 3rd 2022

Debt Instrument [Line Items]

Debt maturity date

Nov. 03, 2022

Face Value

$ 1,000

Stated Interest Rate

2.65%

Effective Interest Rate

2.717%

Notes 2.125 Percent Due November 15th 2022

Debt Instrument [Line Items]

Debt maturity date

Nov. 15, 2022

Face Value

$ 750

Stated Interest Rate

2.125%

Effective Interest Rate

2.239%

Notes 2.375 Percent Due May 1st 2023

Debt Instrument [Line Items]

Debt maturity date

May 01, 2023

Face Value

$ 1,000

Stated Interest Rate

2.375%

Effective Interest Rate

2.465%

Notes 2.0 Percent Due August 8th 2023

Debt Instrument [Line Items]

Debt maturity date

^[1]

Aug. 08, 2023

Face Value

^[1]

$ 1,500

Stated Interest Rate

^[1]

2.00%

Effective Interest Rate

^[1]

2.101%

Notes 3.625 Percent Due December 15th 2023

Debt Instrument [Line Items]

Debt maturity date

Dec. 15, 2023

Face Value

$ 1,500

Stated Interest Rate

3.625%

Effective Interest Rate

3.726%

Notes 2.70 Percent Due February 12th 2025

Debt Instrument [Line Items]

Debt maturity date

Feb. 12, 2025

Face Value

$ 2,250

Stated Interest Rate

2.70%

Effective Interest Rate

2.772%

Notes 3.125 Percent Due November 3rd 2025

Debt Instrument [Line Items]

Debt maturity date

Nov. 03, 2025

Face Value

$ 3,000

Stated Interest Rate

3.125%

Effective Interest Rate

3.176%

Notes 2.4 Percent Due August 8th 2026

Debt Instrument [Line Items]

Debt maturity date

^[1]

Aug. 08, 2026

Face Value

^[1]

$ 4,000

Stated Interest Rate

^[1]

2.40%

Effective Interest Rate

^[1]

2.464%

Notes 3.125 Percent Due December 6th 2028

Debt Instrument [Line Items]

Debt maturity date

^[3]

Dec. 06, 2028

Face Value

^[3]

$ 1,846

$ 1,944

Stated Interest Rate

^[3]

3.125%

Effective Interest Rate

^[3]

3.218%

Notes 2.625 Percent Due May 2nd 2033

Debt Instrument [Line Items]

Debt maturity date

^[3]

May 02, 2033

Face Value

^[3]

$ 580

$ 611

Stated Interest Rate

^[3]

2.625%

Effective Interest Rate

^[3]

2.69%

Notes 3.50 Percent Due February 12th 2035

Debt Instrument [Line Items]

Debt maturity date

Feb. 12, 2035

Face Value

$ 1,500

Stated Interest Rate

3.50%

Effective Interest Rate

3.604%

Notes 4.2 Percent Due November 3rd 2035

Debt Instrument [Line Items]

Debt maturity date

Nov. 03, 2035

Face Value

$ 1,000

Stated Interest Rate

4.20%

Effective Interest Rate

4.26%

Notes 3.45 Percent Due August 8th 2036

Debt Instrument [Line Items]

Debt maturity date

^[1]

Aug. 08, 2036

Face Value

^[1]

$ 2,250

Stated Interest Rate

^[1]

3.45%

Effective Interest Rate

^[1]

3.51%

Notes 5.2 Percent Due June 1st 2039

Debt Instrument [Line Items]

Debt maturity date

Jun. 01, 2039

Face Value

$ 750

Stated Interest Rate

5.20%

Effective Interest Rate

5.24%

Notes 4.5 Percent Due October 1st 2040

Debt Instrument [Line Items]

Debt maturity date

Oct. 01, 2040

Face Value

$ 1,000

Stated Interest Rate

4.50%

Effective Interest Rate

4.567%

Notes 5.3 Percent Due February 8th 2041

Debt Instrument [Line Items]

Debt maturity date

Feb. 08, 2041

Face Value

$ 1,000

Stated Interest Rate

5.30%

Effective Interest Rate

5.361%

Notes 3.5 Percent Due November 15th 2042

Debt Instrument [Line Items]

Debt maturity date

Nov. 15, 2042

Face Value

$ 900

Stated Interest Rate

3.50%

Effective Interest Rate

3.571%

Notes 3.750 Percent Due May 1st 2043

Debt Instrument [Line Items]

Debt maturity date

May 01, 2043

Face Value

$ 500

Stated Interest Rate

3.75%

Effective Interest Rate

3.829%

Notes 4.875 Percent Due December 15th 2043

Debt Instrument [Line Items]

Debt maturity date

Dec. 15, 2043

Face Value

$ 500

Stated Interest Rate

4.875%

Effective Interest Rate

4.918%

Notes 3.750 Percent Due February 12th 2045

Debt Instrument [Line Items]

Debt maturity date

Feb. 12, 2045

Face Value

$ 1,750

Stated Interest Rate

3.75%

Effective Interest Rate

3.80%

Notes 4.45 Percent Due November 3rd 2045

Debt Instrument [Line Items]

Debt maturity date

Nov. 03, 2045

Face Value

$ 3,000

Stated Interest Rate

4.45%

Effective Interest Rate

4.492%

Notes 3.7 Percent Due August 8th 2046

Debt Instrument [Line Items]

Debt maturity date

^[1]

Aug. 08, 2046

Face Value

^[1]

$ 4,500

Stated Interest Rate

^[1]

3.70%

Effective Interest Rate

^[1]

3.743%

Notes 4.0 Percent Due February 12th 2055

Debt Instrument [Line Items]

Debt maturity date

Feb. 12, 2055

Face Value

$ 2,250

Stated Interest Rate

4.00%

Effective Interest Rate

4.063%

Notes 4.75 Percent Due November 3rd 2055

Debt Instrument [Line Items]

Debt maturity date

Nov. 03, 2055

Face Value

$ 1,000

Stated Interest Rate

4.75%

Effective Interest Rate

4.782%

Notes 3.95 Percent Due August 8th 2056

Debt Instrument [Line Items]

Debt maturity date

^[1]

Aug. 08, 2056

Face Value

^[1]

$ 2,250

Stated Interest Rate

^[1]

3.95%

Effective Interest Rate

^[1]

4.033%

[1]	In August 2016, we issued $19.8 billion of debt securities.
[2]	Remaining notes that were acquired as part of the LinkedIn acquisition. See Note 8 – Business combinations for further information.
[3]	Euro-denominated debt securities.

Long-term Debt (Parenthetical) (Detail) - USD ($) $ in Millions	Dec. 31, 2016	Aug. 31, 2016	Jun. 30, 2016
Debt Instrument [Line Items]
Face Value	$ 60,490		$ 40,949
USD Debt Issued in Period
Debt Instrument [Line Items]
Face Value		$ 19,800

Income Taxes - Additional Information (Detail)	3 Months Ended		6 Months Ended
Income Taxes - Additional Information (Detail)	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2016	Dec. 31, 2015
Income Taxes [Line Items]
Effective tax rate	18.00%	14.00%	15.00%	13.00%

Income Taxes - Additional Information Regarding Examinations (Detail) - USD ($) $ in Billions	3 Months Ended		6 Months Ended
	Sep. 30, 2015	Mar. 31, 2011	Dec. 31, 2016	Jun. 30, 2016
Income Tax Examination [Line Items]
Tax contingencies and other tax liabilities			$ 13.3	$ 11.8
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			2016
Internal Revenue Service (IRS) \| Earliest Tax Year
Income Tax Examination [Line Items]
Tax years under audit	2007	2004
Tax years subject to examination			2010
Internal Revenue Service (IRS) \| Latest Tax Year
Income Tax Examination [Line Items]
Tax years under audit	2009	2006
Tax years subject to examination			2016

Restructuring Charges - Additional Information (Detail) $ in Millions	1 Months Ended	6 Months Ended	12 Months Ended
	May 31, 2016 Position	Dec. 31, 2016 USD ($) Position	Jun. 30, 2016 USD ($) Position	Jun. 30, 2015 USD ($)
Restructuring Cost and Reserve [Line Items]
Restructuring charges		$ 0
Phone Hardware Restructuring Plan
Restructuring Cost and Reserve [Line Items]
Number of positions eliminated \| Position			7,400
Restructuring charges				$ 780
Reversal of prior year restructuring charges			$ (21)
Completion date		Jun. 30, 2017
2016 Restructuring
Restructuring Cost and Reserve [Line Items]
Restructuring charges			$ 501
Completion date		Jun. 30, 2017
Number of positions expected to be eliminated \| Position	1,850	2,850

Changes in Restructuring Liability (Detail)
$ in Millions

6 Months Ended

Dec. 31, 2016

USD ($)

Restructuring Cost and Reserve [Line Items]

Restructuring liability as of June 30, 2016

$ 709

Restructuring charges

Cash paid

(285)

Other

(11)

Restructuring liability as of December 31, 2016

413

Severance

Restructuring Cost and Reserve [Line Items]

Restructuring liability as of June 30, 2016

470

Restructuring charges

Cash paid

(250)

Other

(7)

Restructuring liability as of December 31, 2016

213

Other

Restructuring Cost and Reserve [Line Items]

Restructuring liability as of June 30, 2016

239

^[1]

Restructuring charges

^[1]

Cash paid

(35)

^[1]

Other

(4)

^[1]

Restructuring liability as of December 31, 2016

$ 200

^[1]

[1]	“Other” primarily reflects activities associated with the consolidation of our facilities and manufacturing operations, including contract termination costs and asset write-downs.

Unearned Revenue by Segment (Detail) - USD ($) $ in Millions	Dec. 31, 2016	Jun. 30, 2016
Deferred Revenue Arrangement [Line Items]
Unearned revenue	$ 34,680	$ 33,909
Reportable Segments \| Productivity and Business Processes
Deferred Revenue Arrangement [Line Items]
Unearned revenue	11,447	12,497
Reportable Segments \| Intelligent Cloud
Deferred Revenue Arrangement [Line Items]
Unearned revenue	9,749	11,472
Reportable Segments \| More Personal Computing
Deferred Revenue Arrangement [Line Items]
Unearned revenue	3,034	3,334
Corporate and Other
Deferred Revenue Arrangement [Line Items]
Unearned revenue	$ 10,450	$ 6,606

Unearned Revenue - Additional Information (Detail) - USD ($) $ in Millions	Dec. 31, 2016	Jun. 30, 2016
Deferred Revenue Arrangement [Line Items]
Unearned revenue	$ 34,680	$ 33,909
Windows 10 Licenses
Deferred Revenue Arrangement [Line Items]
Unearned revenue	$ 10,500	$ 6,600

Commitments and Contingencies - Additional Information (Detail) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2016	Dec. 31, 2015	Jun. 30, 2016
Commitments and Contingencies [Line Items]
Assets recorded under capital leases	$ 1,600		$ 1,600		$ 865
Accumulated depreciation associated with capital leases	95		95		57
Property and equipment acquired under capital leases	498	$ 0	765	$ 0
Additional purchase obligations for capital leases executed but not yet recorded	4,200		4,200
Accrual for disclosed loss contingencies, current, ending balance	415		415
Amount not accrued for estimated maximum losses for disclosed loss contingencies	1,500		1,500
Other Current Liabilities
Commitments and Contingencies [Line Items]
Current capital lease obligations	56		56		25
Other Long-term Liabilities
Commitments and Contingencies [Line Items]
Long-term capital lease obligations	$ 1,500		$ 1,500		$ 761

Future Minimum Lease Payments under Non-cancellable Capital Leases (Detail)
$ in Millions

Dec. 31, 2016

USD ($)

Capital Leased Assets [Line Items]

Year Ending June 30, 2017 (excluding the six months ended December 31, 2016)

$ 62

Year Ending June 30, 2018

126

Year Ending June 30, 2019

129

Year Ending June 30, 2020

133

Year Ending June 30, 2021

136

Thereafter

1,529

Total

$ 2,115

^[1]

[1]	As of December 31, 2016, capital leases included imputed interest of $581 million.

Future Minimum Lease Payments under Non-cancellable Capital Leases (Parenthetical) (Detail) $ in Millions	Dec. 31, 2016 USD ($)
Capital Leased Assets [Line Items]
Capital leases included imputed interest	$ 581

Stockholders' Equity - Additional Information (Detail) - USD ($)	3 Months Ended		6 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2016	Dec. 31, 2015	Sep. 20, 2016	Sep. 16, 2013
Share Repurchase Program 2013
Share Repurchases [Line Items]
Amount available for repurchase under the share repurchase program approved by the company's Board of Directors						$ 40,000,000,000
Number of shares repurchased under the share repurchase program	59,000,000	66,000,000	122,000,000	155,000,000
Share Repurchase Program 2016
Share Repurchases [Line Items]
Amount available for repurchase under the share repurchase program approved by the company's Board of Directors					$ 40,000,000,000
Number of shares repurchased under the share repurchase program			0

Share Repurchases (Detail) - Share Repurchase Program 2013 - USD ($) shares in Millions, $ in Millions	3 Months Ended		6 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2016	Dec. 31, 2015
Share Repurchases [Line Items]
Shares of common stock repurchased	59	66	122	155
Value of common stock repurchased	$ 3,533	$ 3,600	$ 7,083	$ 7,600

Dividends Declared (Detail) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended				6 Months Ended
	Dec. 31, 2016	Sep. 30, 2016	Dec. 31, 2015	Sep. 30, 2015	Dec. 31, 2016	Dec. 31, 2015
Dividends [Line Items]
Declaration Date	Nov. 30, 2016	Sep. 20, 2016	Dec. 02, 2015	Sep. 15, 2015
Dividend Per Share	$ 0.39	$ 0.39	$ 0.36	$ 0.36	$ 0.78	$ 0.72
Record Date	Feb. 16, 2017	Nov. 17, 2016	Feb. 18, 2016	Nov. 19, 2015
Total Amount	$ 3,014	$ 3,024	$ 2,842	$ 2,868
Payment Date	Mar. 09, 2017	Dec. 08, 2016	Mar. 10, 2016	Dec. 10, 2015

Summary of Changes in Accumulated Other Comprehensive Income by Component (Detail) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2016	Dec. 31, 2015
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance, beginning of period			$ 71,997
Net current period other comprehensive income (loss)	$ (1,169)	$ 35	(1,025)	$ (749)
Balance, end of period	68,809	76,780	68,809	76,780
Derivatives
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance, beginning of period	315	647	352	590
Unrealized gains (losses), net of tax effects	449	122	484	283
Tax expense included in provision for income taxes	3	10	6	15
Amounts reclassified from accumulated other comprehensive income	(169)	(171)	(241)	(275)
Net current period other comprehensive income (loss)	280	(49)	243	8
Balance, end of period	595	598	595	598
Derivatives \| Revenue
Accumulated Other Comprehensive Income (Loss) [Line Items]
Reclassification adjustments for gains	(172)	(181)	(247)	(290)
Investments
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance, beginning of period	3,024	2,598	2,941	3,169
Unrealized gains (losses), net of tax effects	(543)	228	(204)	(338)
Tax expense included in provision for income taxes	243	36	381	39
Amounts reclassified from accumulated other comprehensive income	(451)	(68)	(707)	(73)
Net current period other comprehensive income (loss)	(994)	160	(911)	(411)
Balance, end of period	2,030	2,758	2,030	2,758
Investments \| Other income (expense), net
Accumulated Other Comprehensive Income (Loss) [Line Items]
Reclassification adjustments for gains	(694)	(104)	(1,088)	(112)
Translation adjustments and other
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance, beginning of period	(1,658)	(1,507)	(1,756)	(1,237)
Net current period other comprehensive income (loss)	(455)	(76)	(357)	(346)
Balance, end of period	(2,113)	(1,583)	(2,113)	(1,583)
Accumulated other comprehensive income
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance, beginning of period	1,681	1,738	1,537	2,522
Net current period other comprehensive income (loss)	(1,169)	35	(1,025)	(749)
Balance, end of period	$ 512	$ 1,773	$ 512	$ 1,773

Summary of Changes in Accumulated Other Comprehensive Income by Component (Parenthetical) (Detail) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2016	Dec. 31, 2015
Derivatives
Accumulated Other Comprehensive Income (Loss) [Line Items]
Unrealized gains (losses), tax effects	$ 3	$ 15	$ 4	$ 43
Investments
Accumulated Other Comprehensive Income (Loss) [Line Items]
Unrealized gains (losses), tax effects	(292)	122	(110)	(183)
Translation adjustments and other
Accumulated Other Comprehensive Income (Loss) [Line Items]
Net current period other comprehensive income (loss), tax effects	$ 0	$ (9)	$ 7	$ (21)

Segment Revenue (Detail) - USD ($)
$ in Millions

3 Months Ended

6 Months Ended

Dec. 31, 2016

Dec. 31, 2015

Dec. 31, 2016

Dec. 31, 2015

Segment Reporting Information [Line Items]

Revenue

$ 24,090

$ 23,796

$ 44,543

$ 44,175

Reportable Segments | Productivity and Business Processes

Segment Reporting Information [Line Items]

Revenue

7,382

6,690

14,040

12,996

Reportable Segments | Intelligent Cloud

Segment Reporting Information [Line Items]

Revenue

6,861

6,343

13,243

12,235

Reportable Segments | More Personal Computing

Segment Reporting Information [Line Items]

Revenue

11,823

12,473

21,117

21,935

Corporate and Other

Segment Reporting Information [Line Items]

Revenue

^[1]

$ (1,976)

$ (1,710)

$ (3,857)

$ (2,991)

[1]	Corporate and Other revenue and operating loss for the three and six months ended December 31, 2016 and 2015 consisted of the net revenue deferral related to sales of Windows 10.

Operating Income (Loss) by Segment (Detail) - USD ($)
$ in Millions

3 Months Ended

6 Months Ended

Dec. 31, 2016

Dec. 31, 2015

Dec. 31, 2016

Dec. 31, 2015

Segment Reporting Information [Line Items]

Operating income (loss)

$ 6,177

$ 6,026

$ 11,402

$ 11,819

Reportable Segments | Productivity and Business Processes

Segment Reporting Information [Line Items]

Operating income (loss)

3,256

3,292

6,376

6,448

Reportable Segments | Intelligent Cloud

Segment Reporting Information [Line Items]

Operating income (loss)

2,398

2,568

4,456

4,959

Reportable Segments | More Personal Computing

Segment Reporting Information [Line Items]

Operating income (loss)

2,499

1,876

4,427

3,403

Corporate and Other

Segment Reporting Information [Line Items]

Operating income (loss)

^[1]

$ (1,976)

$ (1,710)

$ (3,857)

$ (2,991)

[1]	Corporate and Other revenue and operating loss for the three and six months ended December 31, 2016 and 2015 consisted of the net revenue deferral related to sales of Windows 10.