Document and Entity Information - shares	3 Months Ended
Document and Entity Information - shares	Sep. 30, 2017	Oct. 20, 2017
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2017
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	Q1
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		7,714,590,195

INCOME STATEMENTS - USD ($) shares in Millions, $ in Millions	3 Months Ended
	Sep. 30, 2017	Sep. 30, 2016
Revenue
Product	$ 14,298	$ 14,968
Service and other	10,240	6,960
Total revenue	24,538	21,928
Cost of revenue
Product	2,980	3,581
Service and other	5,298	4,263
Total cost of revenue	8,278	7,844
Gross margin	16,260	14,084
Research and development	3,574	3,106
Sales and marketing	3,812	3,218
General and administrative	1,166	1,045
Operating income	7,708	6,715
Other income, net	276	112
Income before income taxes	7,984	6,827
Provision for income taxes	1,408	1,160
Net income	$ 6,576	$ 5,667
Earnings per share:
Basic	$ 0.85	$ 0.73
Diluted	$ 0.84	$ 0.72
Weighted average shares outstanding:
Basic	7,708	7,789
Diluted	7,799	7,876
Cash dividends declared per common share	$ 0.42	$ 0.39

COMPREHENSIVE INCOME STATEMENTS - USD ($) $ in Millions	3 Months Ended
COMPREHENSIVE INCOME STATEMENTS - USD ($) $ in Millions	Sep. 30, 2017	Sep. 30, 2016
Net income	$ 6,576	$ 5,667
Other comprehensive income (loss), net of tax:
Net change related to derivatives	(106)	(37)
Net change related to investments	(288)	83
Translation adjustments and other	293	118
Other comprehensive income (loss)	(101)	164
Comprehensive income	$ 6,475	$ 5,831

BALANCE SHEETS - USD ($) $ in Millions	Sep. 30, 2017	Jun. 30, 2017
Current assets:
Cash and cash equivalents	$ 6,884	$ 7,663
Short-term investments (including securities loaned of $4,774 and $3,694)	131,587	125,318
Total cash, cash equivalents, and short-term investments	138,471	132,981
Accounts receivable, net of allowance for doubtful accounts of $285 and $345	14,561	22,431
Inventories	3,211	2,181
Other	4,788	5,103
Total current assets	161,031	162,696
Property and equipment, net of accumulated depreciation of $25,523 and $24,179	24,809	23,734
Operating lease right-of-use assets	6,844	6,555
Equity and other investments	5,343	6,023
Goodwill	35,389	35,122
Intangible assets, net	9,598	10,106
Other long-term assets	6,083	6,076
Total assets	249,097	250,312
Current liabilities:
Accounts payable	6,866	7,390
Short-term debt	8,170	9,072
Current portion of long-term debt	1,050	1,049
Accrued compensation	4,108	5,819
Income taxes	920	718
Short-term unearned revenue	22,778	24,013
Securities lending payable	203	97
Other	7,520	7,587
Total current liabilities	51,615	55,745
Long-term debt	76,255	76,073
Long-term unearned revenue	2,126	2,643
Deferred income taxes	5,513	5,734
Operating lease liabilities	5,768	5,372
Other long-term liabilities	18,173	17,034
Total liabilities	159,450	162,601
Commitments and contingencies
Stockholders' equity:
Common stock and paid-in capital – shares authorized 24,000; outstanding 7,720 and 7,708	69,419	69,315
Retained earnings	19,702	17,769
Accumulated other comprehensive income	526	627
Total stockholders' equity	89,647	87,711
Total liabilities and stockholders' equity	$ 249,097	$ 250,312

BALANCE SHEETS (Parenthetical) - USD ($) $ in Millions	Sep. 30, 2017	Jun. 30, 2017
Short-term investments, securities loaned	$ 4,774	$ 3,694
Accounts receivable, allowance for doubtful accounts	285	345
Property and equipment, accumulated depreciation	$ 25,523	$ 24,179
Common stock, shares authorized	24,000,000,000	24,000,000,000
Common stock, outstanding	7,720,000,000	7,708,000,000

CASH FLOWS STATEMENTS - USD ($) $ in Millions	3 Months Ended
CASH FLOWS STATEMENTS - USD ($) $ in Millions	Sep. 30, 2017	Sep. 30, 2016
Operations
Net income	$ 6,576	$ 5,667
Adjustments to reconcile net income to net cash from operations:
Depreciation, amortization, and other	2,499	1,816
Stock-based compensation expense	973	703
Net recognized gains on investments and derivatives	(523)	(311)
Deferred income taxes	(53)	540
Changes in operating assets and liabilities:
Accounts receivable	7,949	7,187
Inventories	(1,023)	(867)
Other current assets	(318)	(965)
Other long-term assets	(278)	(93)
Accounts payable	(407)	(443)
Unearned revenue	(1,806)	(1,807)
Other current liabilities	(1,962)	(321)
Other long-term liabilities	813	443
Net cash from operations	12,440	11,549
Financing
Repayments of short-term debt, maturities of 90 days or less, net	(3,710)	(3,390)
Proceeds from issuance of debt	3,954	24,977
Repayments of debt	(1,169)	(225)
Common stock issued	307	241
Common stock repurchased	(2,570)	(4,362)
Common stock cash dividends paid	(3,003)	(2,800)
Other, net	(150)	(112)
Net cash from (used in) financing	(6,341)	14,329
Investing
Additions to property and equipment	(2,132)	(2,163)
Acquisition of companies, net of cash acquired, and purchases of intangible and other assets	(179)	(24)
Purchases of investments	(32,961)	(57,181)
Maturities of investments	5,226	8,659
Sales of investments	23,036	32,323
Securities lending payable	106	(84)
Net cash used in investing	(6,904)	(18,470)
Effect of foreign exchange rates on cash and cash equivalents	26	10
Net change in cash and cash equivalents	(779)	7,418
Cash and cash equivalents, beginning of period	7,663	6,510
Cash and cash equivalents, end of period	$ 6,884	$ 13,928

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, 2016		$ 68,178	$ 13,118	$ 1,794
Common stock issued		241
Net income	$ 5,667		5,667
Other comprehensive income (loss)	164			164
Common stock cash dividends	(3,024)		(3,025)
Common stock repurchased		(1,374)	(3,003)
Stock-based compensation expense		703
Other, net		(1)
Balance, end of period at Sep. 30, 2016	82,462	67,747	12,757	1,958
Balance, beginning of period at Jun. 30, 2017	87,711	69,315	17,769	627
Common stock issued		307
Net income	6,576		6,576
Other comprehensive income (loss)	(101)			(101)
Common stock cash dividends	(3,242)		(3,239)
Common stock repurchased		(1,175)	(1,404)
Stock-based compensation expense		973
Other, net		(1)
Balance, end of period at Sep. 30, 2017	$ 89,647	$ 69,419	$ 19,702	$ 526

ACCOUNTING POLICIES

3 Months Ended

Sep. 30, 2017

ACCOUNTING POLICIES

NOTE 1 — ACCOUNTING POLICIES

Accounting Principles

Our unaudited interim consolidated financial statements and accompanying notes are prepared in accordance with accounting principles generally accepted in the United States of America (“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 2017 Form 10-K filed with the U.S. Securities and Exchange Commission on August 2, 2017.

Principles of Consolidation

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

Estimates and Assumptions

Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. Examples of estimates include: for revenue recognition, determining the nature and timing of satisfaction of performance obligations, and determining the standalone selling price (“SSP”) of performance obligations, variable consideration, and other obligations such as product returns and refunds; loss contingencies; product warranties; the fair value of and/or potential impairment of goodwill and intangible assets for our reporting units; product life cycles; useful lives of our tangible and intangible assets; allowances for doubtful accounts; the market value of, and demand for, our inventory; and stock-based compensation forfeiture rates. Examples of assumptions include: when technological feasibility is achieved for our products; the potential outcome of future tax consequences of events that have been recognized on our consolidated financial statements or tax returns; and determining when investment impairments are other-than-temporary. Actual results and outcomes may differ from management’s estimates and assumptions.

Revenue

Product Revenue and Service and Other Revenue

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

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

Revenue Recognition

Revenue is recognized upon transfer of control of promised products or services to customers in an amount that reflects the consideration we expect to receive in exchange for those products or services. We enter into contracts that can include various combinations of products and services, which are generally capable of being distinct and accounted for as separate performance obligations. Revenue is recognized net of allowances for returns and any taxes collected from customers, which are subsequently remitted to governmental authorities.

Nature of Products and Services

Licenses for on-premises software provide the customer with a right to use the software as it exists when made available to the customer. Customers may purchase perpetual licenses or subscribe to licenses, which provide customers with the same functionality and differ mainly in the duration over which the customer benefits from the software. Revenue from distinct on-premises licenses is recognized upfront at the point in time when the software is made available to the customer. In cases where we allocate revenue to software updates, primarily because the updates are provided at no additional charge, revenue is recognized as the updates are provided, which is generally ratably over the estimated life of the related device or license.

Certain volume licensing programs, including Enterprise Agreements, include on-premises licenses combined with Software Assurance (“SA”). SA conveys rights to new software and upgrades released over the contract period and provides support, tools, and training to help customers deploy and use products more efficiently. On-premises licenses are considered distinct performance obligations when sold with SA. Revenue allocated to SA is generally recognized ratably over the contract period as customers simultaneously consume and receive benefits, given that SA comprises distinct performance obligations that are satisfied over time.

Cloud services, which allow customers to use hosted software over the contract period without taking possession of the software, are provided on either a subscription or consumption basis. Revenue related to cloud services provided on a subscription basis is recognized ratably over the contract period. Revenue related to cloud services provided on a consumption basis, such as the amount of storage used in a period, is recognized based on the customer utilization of such resources. When cloud services require a significant level of integration and interdependency with software and the individual components are not considered distinct, all revenue is recognized over the period in which the cloud services are provided.

Revenue from search advertising is recognized when the advertisement appears in the search results or when the action necessary to earn the revenue has been completed. Revenue from consulting services is recognized as services are provided.

Our hardware is generally highly dependent on, and interrelated with, the underlying operating system and cannot function without the operating system. In these cases, the hardware and software license are accounted for as a single performance obligation and revenue is recognized at the point in time when ownership is transferred to resellers or directly to end customers through retail stores and online marketplaces.

Refer to Note 19 – Segment Information and Geographic Data for further information, including revenue by significant product and service offering.

Significant Judgments

Our contracts with customers often include promises to transfer multiple products and services to a customer. Determining whether products and services are considered distinct performance obligations that should be accounted for separately versus together may require significant judgment. Certain cloud services, such as Office 365, depend on a significant level of integration and interdependency between the desktop applications and cloud services. Judgment is required to determine whether the software license is considered distinct and accounted for separately, or not distinct and accounted for together with the cloud service and recognized over time.

Judgment is required to determine the SSP for each distinct performance obligation. We use a single amount to estimate SSP for items that are not sold separately, including on-premises licenses sold with SA or software updates provided at no additional charge. We use a range of amounts to estimate SSP when we sell each of the products and services separately and need to determine whether there is a discount that needs to be allocated based on the relative SSP of the various products and services.

In instances where SSP is not directly observable, such as when we do not sell the product or service separately, we determine the SSP using information that may include market conditions and other observable inputs. We typically have more than one SSP for individual products and services due to the stratification of those products and services by customers and circumstances. In these instances, we may use information such as the size of the customer and geographic region in determining the SSP.

Due to the various benefits from and the nature of our SA program, judgment is required to assess the pattern of delivery, including the exercise pattern of certain benefits across our portfolio of customers.

Our products are generally sold with a right of return and we may provide other credits or incentives, which are accounted for as variable consideration when estimating the amount of revenue to recognize. Returns and credits are estimated at contract inception and updated at the end of each reporting period as additional information becomes available and only to the extent that it is probable that a significant reversal of any incremental revenue will not occur.

Contract Balances

Timing of revenue recognition may differ from the timing of invoicing to customers. We record a receivable when revenue is recognized prior to invoicing, or unearned revenue when revenue is recognized subsequent to invoicing. For multi-year agreements, we generally invoice customers annually at the beginning of each annual coverage period. We record a receivable related to revenue recognized for multi-year on-premises licenses as we have an unconditional right to invoice and receive payment in the future related to those licenses.

The opening balance of current and long-term accounts receivable, net of allowance for doubtful accounts, was $22.3 billion as of July 1, 2016.

As of September 30, 2017 and June 30, 2017, long-term accounts receivable, net of allowance for doubtful accounts, were $1.6 billion and $1.7 billion, respectively, and are included in other long-term assets on our consolidated balance sheets.

The allowance for doubtful accounts reflects our best estimate of probable losses inherent in the accounts receivable balance. We determine the allowance based on known troubled accounts, historical experience, and other currently available evidence.

Activity in the allowance for doubtful accounts was as follows:


(In millions)


Three Months Ended September 30, 2017

Balance, beginning of period	$	361
Charged to costs and other		(45	)
Write-offs		(16	)


Balance, end of period	$	300


Reported as of September 30, 2017

Accounts receivable, net of allowance for doubtful accounts	$	285
Other long-term assets		15


Total	$	300

Unearned revenue is comprised mainly of unearned revenue related to volume licensing programs, which may include SA and cloud services. Unearned revenue is generally invoiced annually at the beginning of each contract period for multi-year agreements and recognized ratably over the coverage period. Unearned revenue also includes payments for: consulting services to be performed in the future; Office 365 subscriptions; LinkedIn subscriptions; Xbox Live subscriptions; Windows 10 post-delivery support; Dynamics business solutions; Skype prepaid credits and subscriptions; and other offerings for which we have been paid in advance and earn the revenue when we transfer control of the product or service.

Refer to Note 14 – Unearned Revenue for further information, including unearned revenue by segment and changes in unearned revenue during the period.

Payment terms and conditions vary by contract type, although terms generally include a requirement of payment within 30 to 60 days. In instances where the timing of revenue recognition differs from the timing of invoicing, we have determined our contracts generally do not include a significant financing component. The primary purpose of our invoicing terms is to provide customers with simplified and predictable ways of purchasing our products and services, not to receive financing from our customers, such as invoicing at the beginning of a subscription term with revenue recognized ratably over the contract period, or to provide customers with financing, such as multi-year on-premises licenses that are invoiced annually with revenue recognized upfront.

Assets Recognized from the Costs to Obtain a Contract with a Customer

We recognize an asset for the incremental costs of obtaining a contract with a customer if we expect the benefit of those costs to be longer than one year. We have determined that certain sales incentive programs meet the requirements to be capitalized. Total capitalized costs to obtain a contract were immaterial during the periods presented and are included in other current and long-term assets on our consolidated balance sheets.

We apply a practical expedient to expense costs as incurred for costs to obtain a contract when the amortization period would have been one year or less. These costs include our internal sales force compensation program and certain partner sales incentive programs as we have determined annual compensation is commensurate with annual sales activities.

Leases

We determine if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use (“ROU”) assets, other current liabilities, and operating lease liabilities on our consolidated balance sheets. Finance leases are included in property and equipment, other current liabilities, and other long-term liabilities on our consolidated balance sheets.

Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of future payments. The operating lease ROU asset also includes any lease payments made and excludes lease incentives and initial direct costs incurred. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term.

We have lease agreements with lease and non-lease components, which are generally accounted for separately. For certain equipment leases, such as vehicles, we account for the lease and non-lease components as a single lease component. Additionally, for certain equipment leases, we apply a portfolio approach to effectively account for the operating lease ROU assets and liabilities.

Recent Accounting Guidance

Recently Adopted Accounting Guidance

Leases

In February 2016, the Financial Accounting Standards Board (“FASB”) issued a new standard related to leases to increase transparency and comparability among organizations by requiring the recognition of ROU assets and lease liabilities on the balance sheet. Most prominent among the changes in the standard is the recognition of ROU assets and lease liabilities by lessees for those leases classified as operating leases. Under the standard, disclosures are required to meet the objective of enabling users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases. We are also required to recognize and measure leases existing at, or entered into after, the beginning of the earliest comparative period presented using a modified retrospective approach, with certain practical expedients available.

We elected to early adopt the standard effective July 1, 2017 concurrent with our adoption of the new standard related to revenue recognition. We elected the available practical expedients and implemented internal controls and key system functionality to enable the preparation of financial information on adoption.

The standard had a material impact on our consolidated balance sheets, but did not have an impact on our consolidated income statements. The most significant impact was the recognition of ROU assets and lease liabilities for operating leases, while our accounting for finance leases remained substantially unchanged. Adoption of the standard required us to restate certain previously reported results, including the recognition of additional ROU assets and lease liabilities for operating leases. Refer to Impacts to Previously Reported Results below for the impact of adoption of the standard on our consolidated financial statements.

Revenue from Contracts with Customers

In May 2014, the FASB issued a new standard related to revenue recognition. Under the standard, revenue is recognized when a customer obtains control of promised goods or services in an amount that reflects the consideration the entity expects to receive in exchange for those goods or services. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers.

We elected to early adopt the standard effective July 1, 2017, using the full retrospective method, which required us to restate each prior reporting period presented. We implemented internal controls and key system functionality to enable the preparation of financial information on adoption.

The most significant impact of the standard relates to our accounting for software license revenue. Specifically, for Windows 10, we recognize revenue predominantly at the time of billing and delivery rather than ratably over the life of the related device. For certain multi-year commercial software subscriptions that include both distinct software licenses and SA, we recognize license revenue at the time of contract execution rather than over the subscription period. Due to the complexity of certain of our commercial license subscription contracts, the actual revenue recognition treatment required under the standard depends on contract-specific terms and in some instances may vary from recognition at the time of billing. Revenue recognition related to our hardware, cloud offerings (such as Office 365), LinkedIn, and professional services remains substantially unchanged.

Adoption of the standard using the full retrospective method required us to restate certain previously reported results, including the recognition of additional revenue and an increase in the provision for income taxes, primarily due to the net change in Windows 10 revenue recognition. In addition, adoption of the standard resulted in an increase in accounts receivable and other current and long-term assets, driven by unbilled receivables from upfront recognition of revenue for certain multi-year commercial software subscriptions that include both distinct software licenses and Software Assurance; a reduction of unearned revenue, driven by the upfront recognition of license revenue from Windows 10 and certain multi-year commercial software subscriptions; and an increase in deferred income taxes, driven by the upfront recognition of revenue. Refer to Impacts to Previously Reported Results below for the impact of adoption of the standard on our consolidated financial statements.

Impacts to Previously Reported Results

Adoption of the standards related to revenue recognition and leases impacted our previously reported results as follows:

(In millions, except per share amounts)	As Previously Reported		New Revenue Standard Adjustment		As Restated


Three Months Ended September 30, 2016

Income Statements

Revenue	$	20,453	$	1,475	$	21,928
Provision for income taxes		635		525		1,160
Net income		4,690		977		5,667
Diluted earnings per share		0.60		0.12		0.72

(In millions)	As Previously Reported		New Revenue Standard Adjustment			New Lease Standard Adjustment		As Restated


June 30, 2017

Balance Sheets

Accounts receivable, net of allowance for doubtful accounts	$	19,792	$	2,639		$	0	$	22,431
Operating lease right-of-use assets		0		0			6,555		6,555
Other current and long-term assets		11,147		32			0		11,179
Unearned revenue		44,479		(17,823	)		0		26,656
Deferred income taxes		531		5,203			0		5,734
Operating lease liabilities		0		0			5,372		5,372
Other current and long-term liabilities		23,464		(26	)		1,183		24,621
Stockholders' equity		72,394		15,317			0		87,711

Adoption of the standards related to revenue recognition and leases had no impact to cash from or used in operating, financing, or investing on our consolidated cash flows statements.

Recent Accounting Guidance Not Yet Adopted

Financial Instruments – Targeted Improvements to Accounting for Hedging Activities

In August 2017, the FASB issued new guidance related to accounting for hedging activities. This guidance expands strategies that qualify for hedge accounting, changes how many hedging relationships are presented in the financial statements, and simplifies the application of hedge accounting in certain situations. The standard will be effective for us beginning July 1, 2019, with early adoption permitted for any interim or annual period before the effective date. Adoption of the standard will be applied using a modified retrospective approach through a cumulative-effect adjustment to retained earnings as of the effective date. We are currently evaluating the impact of this standard on our consolidated financial statements, including accounting policies, processes, and systems.

Accounting for Income Taxes – Intra-Entity Asset Transfers

In October 2016, the FASB issued new guidance requiring an entity to recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs, rather than when the asset has been sold to an outside party. This guidance is effective for us beginning July 1, 2018, with early adoption permitted beginning July 1, 2017. We plan to adopt the guidance effective July 1, 2018. Adoption of the guidance will be applied using a modified retrospective approach through a cumulative-effect adjustment to retained earnings as of the effective date. A cumulative-effect adjustment will capture the write-off of income tax consequences deferred from past intra-entity transfers involving assets other than inventory and new deferred tax assets for amounts not recognized under current U.S. GAAP. We anticipate this guidance will have a material impact on our consolidated balance sheets upon adoption, and continue to evaluate any impacts to our accounting policies, processes, and systems.

Financial Instruments – Credit Losses

In June 2016, the FASB issued a new standard to replace the incurred loss impairment methodology under 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. We will be required to use a forward-looking expected credit loss model for accounts receivables, loans, and other financial instruments. Credit losses relating to available-for-sale debt securities will also be recorded through an allowance for credit losses rather than as a reduction in the amortized cost basis of the securities. The standard will be effective for us beginning July 1, 2020, with early adoption permitted beginning July 1, 2019. Adoption of the standard will be applied using a modified retrospective approach through a cumulative-effect adjustment to retained earnings as of the effective date to align our credit loss methodology with the new standard. We are currently evaluating the impact of this standard on our consolidated financial statements, including accounting policies, processes, and systems.

Financial Instruments – Recognition, Measurement, Presentation, and Disclosure

In January 2016, the FASB issued a new standard related to certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. Most prominent among the changes in the standard is the requirement for changes in the fair value of our equity investments, with certain exceptions, to be recognized through net income rather than other comprehensive income (“OCI”). The standard will be effective for us beginning July 1, 2018. Adoption of the standard will be applied using a modified retrospective approach through a cumulative-effect adjustment to retained earnings as of the effective date. A cumulative-effect adjustment will capture any previously held unrealized gains and losses related to our equity investments carried at fair value and the impact of recording the fair value of certain equity investments that were carried at cost. We are currently evaluating the impact of this standard on our consolidated financial statements, including accounting policies, processes, and systems.

EARNINGS PER SHARE

3 Months Ended

Sep. 30, 2017

EARNINGS PER SHARE

NOTE 2 — EARNINGS PER SHARE

Basic earnings per share (“EPS”) is computed based on the weighted average number of shares of common stock outstanding during the period. Diluted EPS is computed based on the weighted average number of shares of common stock plus the effect of dilutive potential common shares outstanding during the period using the treasury stock method. Dilutive potential common shares include outstanding stock options and stock awards.

The components of basic and diluted EPS were as follows:

(In millions, except per share amounts)


Three Months Ended September 30,	2017		2016

Net income available for common shareholders (A)	$	6,576	$	5,667


Weighted average outstanding shares of common stock (B)		7,708		7,789
Dilutive effect of stock-based awards		91		87


Common stock and common stock equivalents (C)		7,799		7,876


Earnings Per Share

Basic (A/B)	$	0.85	$	0.73
Diluted (A/C)	$	0.84	$	0.72

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

OTHER INCOME (EXPENSE), NET

3 Months Ended

Sep. 30, 2017

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 September 30,	2017			2016

Dividends and interest income	$	473		$	293
Interest expense		(672	)		(437	)
Net recognized gains on investments		573			405
Net losses on derivatives		(50	)		(94	)
Net losses on foreign currency remeasurements		(9	)		(40	)
Other, net		(39	)		(15	)


Total	$	276		$	112

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

(In millions)


Three Months Ended September 30,	2017			2016

Other-than-temporary impairments of investments	$	(6	)	$	(18	)
Realized gains from sales of available-for-sale securities		671			483
Realized losses from sales of available-for-sale securities		(92	)		(60	)


Total	$	573		$	405

INVESTMENTS

3 Months Ended

Sep. 30, 2017

INVESTMENTS

NOTE 4 — INVESTMENTS

Investment Components

The components of investments, including associated derivatives, were as follows:

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


September 30, 2017

Cash	$	4,052	$	0	$	0		$	4,052	$	4,052	$	0	$	0
Mutual funds		1,040		0		0			1,040		1,040		0		0
Commercial paper		833		0		0			833		384		449		0
Certificates of deposit		1,430		0		0			1,430		1,252		178		0
U.S. government and agency securities		117,222		66		(344	)		116,944		155		116,789		0
Foreign government bonds		5,150		2		(12	)		5,140		1		5,139		0
Mortgage- and asset-backed securities		3,771		10		(4	)		3,777		0		3,777		0
Corporate notes and bonds		4,872		62		(9	)		4,925		0		4,925		0
Municipal securities		284		46		0			330		0		330		0
Common and preferred stock		2,220		2,604		(9	)		4,815		0		0		4,815
Other investments		528		0		0			528		0		0		528


Total	$	141,402	$	2,790	$	(378	)	$	143,814	$	6,884	$	131,587	$	5,343

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


June 30, 2017

Cash	$	3,624	$	0	$	0		$	3,624	$	3,624	$	0	$	0
Mutual funds		1,478		0		0			1,478		1,478		0		0
Commercial paper		319		0		0			319		69		250		0
Certificates of deposit		1,358		0		0			1,358		972		386		0
U.S. government and agency securities		112,119		85		(360	)		111,844		16		111,828		0
Foreign government bonds		5,276		2		(13	)		5,265		1,504		3,761		0
Mortgage- and asset-backed securities		3,921		14		(4	)		3,931		0		3,931		0
Corporate notes and bonds		4,786		61		(12	)		4,835		0		4,835		0
Municipal securities		284		43		0			327		0		327		0
Common and preferred stock		2,472		3,062		(34	)		5,500		0		0		5,500
Other investments		523		0		0			523		0		0		523


Total	$	136,160	$	3,267	$	(423	)	$	139,004	$	7,663	$	125,318	$	6,023

As of September 30, 2017 and June 30, 2017, the recorded bases of common and preferred stock that are restricted for more than one year or are not publicly traded were $1.0 billion and $1.1 billion, respectively. These investments are carried at cost and are reviewed quarterly for indicators of other-than-temporary impairment. It is not practicable for us to reliably estimate the fair value of these investments.

We lend certain fixed-income and equity securities to increase investment returns. These transactions are accounted for as secured borrowings and the loaned securities continue to be carried as investments on our consolidated balance sheets. Cash and/or security interests are received as collateral for the loaned securities with the amount determined based upon the underlying security lent and the creditworthiness of the borrower. Cash received is recorded as an asset with a corresponding liability. As of September 30, 2017 and June 30, 2017, collateral received under agreements for loaned securities was $4.9 billion and $3.7 billion, respectively, and was 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


September 30, 2017

U.S. government and agency securities	$	98,245	$	(290	)	$	4,957	$	(54	)	$	103,202	$	(344	)
Foreign government bonds		4,972		(1	)		24		(11	)		4,996		(12	)
Mortgage- and asset-backed securities		713		(2	)		236		(2	)		949		(4	)
Corporate notes and bonds		502		(4	)		283		(5	)		785		(9	)
Common and preferred stock		30		0			59		(9	)		89		(9	)


Total	$	104,462	$	(297	)	$	5,559	$	(81	)	$	110,021	$	(378	)

	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, 2017

U.S. government and agency securities	$	87,558	$	(348	)	$	371	$	(12	)	$	87,929	$	(360	)
Foreign government bonds		4,006		(2	)		23		(11	)		4,029		(13	)
Mortgage- and asset-backed securities		1,068		(3	)		198		(1	)		1,266		(4	)
Corporate notes and bonds		669		(8	)		177		(4	)		846		(12	)
Common and preferred stock		69		(6	)		148		(28	)		217		(34	)


Total	$	93,370	$	(367	)	$	917	$	(56	)	$	94,287	$	(423	)

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

Debt Investment Maturities

(In millions)	Cost Basis		Estimated Fair Value


September 30, 2017

Due in one year or less	$	22,611	$	22,558
Due after one year through five years		101,909		101,734
Due after five years through 10 years		8,121		8,145
Due after 10 years		921		942


Total	$	133,562	$	133,379

DERIVATIVES

3 Months Ended

Sep. 30, 2017

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 September 30, 2017 and June 30, 2017, the total notional amounts of these foreign exchange contracts sold were $8.9 billion for both periods.

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 September 30, 2017 and June 30, 2017, the total notional amounts of these foreign exchange contracts sold were $5.0 billion and $5.1 billion, respectively.

Certain options and forwards not designated as hedging instruments are also used to manage the variability in foreign exchange rates on certain balance sheet amounts and to manage other foreign currency exposures. As of September 30, 2017, the total notional amounts of these foreign exchange contracts purchased and sold were $11.0 billion and $8.2 billion, respectively. As of June 30, 2017, the total notional amounts of these foreign exchange contracts purchased and sold were $8.8 billion and $10.6 billion, respectively.

Equity

Securities held in our equity and other investments portfolio are subject to market price risk. Market price risk is managed relative to broad-based global and domestic equity indices using certain convertible preferred investments, options, futures, and swap contracts not designated as hedging instruments. From time to time, to hedge our price risk, we may use and designate equity derivatives as hedging instruments, including puts, calls, swaps, and forwards. As of September 30, 2017, the total notional amounts of equity contracts purchased and sold for managing market price risk were $1.6 billion and $2.6 billion, respectively, of which $1.6 billion and $1.8 billion, respectively, were designated as hedging instruments. As of June 30, 2017, the total notional amounts of equity contracts purchased and sold for managing market price risk were $1.9 billion and $2.4 billion, respectively, of which $1.6 billion and $1.8 billion, respectively, were designated as hedging instruments.

Interest Rate

Securities held in our fixed-income portfolio are subject to different interest rate risks based on their maturities. We manage the average maturity of our fixed-income portfolio to achieve economic returns that correlate to certain broad-based fixed-income indices using exchange-traded option and futures contracts, and over-the-counter swap and option contracts, none of which are designated as hedging instruments. As of September 30, 2017, the total notional amounts of fixed-interest rate contracts purchased and sold were $528 million and $364 million, respectively. As of June 30, 2017, the total notional amounts of fixed-interest rate contracts purchased and sold were $233 million and $352 million, respectively.

In addition, we use “To Be Announced” forward purchase commitments of mortgage-backed assets to gain exposure to agency mortgage-backed securities. These meet the definition of a derivative instrument in cases where physical delivery of the assets is not taken at the earliest available delivery date. As of September 30, 2017 and June 30, 2017, the total notional derivative amounts of mortgage contracts purchased were $553 million and $567 million, respectively.

Credit

Our fixed-income portfolio is diversified and consists primarily of investment-grade securities. We use credit default swap contracts, not designated as hedging instruments, to manage credit exposures relative to broad-based indices and to facilitate portfolio diversification. We use credit default swaps as they are a low-cost method of managing exposure to individual credit risks or groups of credit risks. As of September 30, 2017, the total notional amounts of credit contracts purchased and sold were $252 million and $49 million, respectively. As of June 30, 2017, the total notional amounts of credit contracts purchased and sold were $267 million and $63 million, respectively.

Credit-Risk-Related Contingent Features

Certain of our counterparty agreements for derivative instruments contain provisions that require our issued and outstanding long-term unsecured debt to maintain an investment grade credit rating and require us to maintain minimum liquidity of $1.0 billion. To the extent we fail to meet these requirements, we will be required to post collateral, similar to the standard convention related to over-the-counter derivatives. As of September 30, 2017, our long-term unsecured debt rating was AAA, and cash investments were in excess of $1.0 billion. As a result, no collateral was required to be posted.

Fair Values of Derivative Instruments

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

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

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

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

	Assets												Liabilities


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


September 30, 2017

Non-designated Hedge Derivatives

Foreign exchange contracts	$	10		$	93		$	0		$	14		$	(83	)	$	(7	)
Equity contracts		5			0			0			0			(16	)		0
Interest rate contracts		4			0			0			0			(8	)		0
Credit contracts		4			0			0			0			(1	)		0


Total	$	23		$	93		$	0		$	14		$	(108	)	$	(7	)


Designated Hedge Derivatives

Foreign exchange contracts	$	81		$	89		$	0		$	6		$	(3	)	$	0
Equity contracts		0			0			23			0			(337	)		0


Total	$	81		$	89		$	23		$	6		$	(340	)	$	0


Total gross amounts of derivatives	$	104		$	182		$	23		$	20		$	(448	)	$	(7	)


Gross derivatives either offset or subject to an enforceable master netting agreement	$	104		$	182		$	23		$	20		$	(444	)	$	(7	)
Gross amounts of derivatives offset on the balance sheet		(18	)		(92	)		(23	)		(7	)		133			7


Net amounts presented on the balance sheet		86			90			0			13			(311	)		0
Gross amounts of derivatives not offset on the balance sheet		0			0			0			0			0			0
Cash collateral received		0			0			0			0			(134	)		0


Net amount	$	86		$	90		$	0		$	13		$	(445	)	$	0

	Assets																Liabilities


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


June 30, 2017

Non-designated Hedge Derivatives

Foreign exchange contracts	$	9			$	203			$	0			$	6			$	(134	)		$	(8	)
Equity contracts		3				0				0				0				(6	)			0
Interest rate contracts		3				0				0				0				(7	)			0
Credit contracts		5				0				0				0				(1	)			0


Total	$	20			$	203			$	0			$	6			$	(148	)		$	(8	)


Designated Hedge Derivatives

Foreign exchange contracts	$	80			$	133			$	0			$	0			$	(3	)		$	0
Equity contracts		0				0				67				0				(186	)			0


Total	$	80			$	133			$	67			$	0			$	(189	)		$	0


Total gross amounts of derivatives	$	100			$	336			$	67			$	6			$	(337	)		$	(8	)


Gross derivatives either offset or subject to an enforceable master netting agreement	$	100			$	336			$	67			$	6			$	(334	)		$	(8	)
Gross amounts of derivatives offset on the balance sheet		(20	)			(132	)			(67	)			(8	)			221				7


Net amounts presented on the balance sheet		80				204				0				(2	)			(113	)			(1	)
Gross amounts of derivatives not offset on the balance sheet		0				0				0				0				0				0
Cash collateral received		0				0				0				0				(228	)			0


Net amount	$	80			$	204			$	0			$	(2	)		$	(341	)		$	(1	)

Refer to Note 4 – Investments and Note 6 – Fair Value Measurements for further information.

Fair Value Hedge Gains (Losses)

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

(In millions)


Three Months Ended September 30,	2017			2016

Foreign Exchange Contracts

Derivatives	$	22		$	(48	)
Hedged items		(2	)		68


Total amount of ineffectiveness	$	20		$	20


Equity Contracts

Derivatives	$	(236	)	$	(10	)
Hedged items		236			10


Total amount of ineffectiveness	$	0		$	0


Amount of equity contracts excluded from effectiveness assessment	$	40		$	(3	)

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 September 30,	2017			2016

Effective Portion

Gains recognized in other comprehensive income (net of tax of $0 and $1)	$	5		$	35
Gains reclassified from accumulated other comprehensive income into revenue		111			75

Amount Excluded from Effectiveness Assessment and Ineffective Portion

Losses recognized in other income (expense), net		(91	)		(70	)

We estimate that $29 million of net derivative gains included in AOCI as of September 30, 2017 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 months ended September 30, 2017.

Non-Designated Derivative Gains (Losses)

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

(In millions)


Three Months Ended September 30,	2017			2016

Foreign exchange contracts	$	(69	)	$	(31	)
Equity contracts		(29	)		(17	)
Interest-rate contracts		11			4
Credit contracts		0			2
Other contracts		0			(22	)


Total	$	(87	)	$	(64	)

FAIR VALUE MEASUREMENTS

3 Months Ended

Sep. 30, 2017

FAIR VALUE MEASUREMENTS

NOTE 6 — FAIR VALUE MEASUREMENTS

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

•

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

•

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

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

Our other current financial assets and current financial liabilities have fair values that approximate their carrying values.

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

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

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


September 30, 2017

Assets

Mutual funds	$	1,040	$	0	$	0	$	1,040	$	0		$	1,040
Commercial paper		0		833		0		833		0			833
Certificates of deposit		0		1,430		0		1,430		0			1,430
U.S. government and agency securities		114,965		1,979		0		116,944		0			116,944
Foreign government bonds		16		5,042		0		5,058		0			5,058
Mortgage- and asset-backed securities		0		3,781		0		3,781		0			3,781
Corporate notes and bonds		0		4,915		1		4,916		0			4,916
Municipal securities		0		330		0		330		0			330
Common and preferred stock		2,429		1,346		18		3,793		0			3,793
Derivatives		2		327		0		329		(140	)		189


Total	$	118,452	$	19,983	$	19	$	138,454	$	(140	)	$	138,314


Liabilities

Derivatives and other	$	16	$	439	$	38	$	493	$	(140	)	$	353

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


June 30, 2017

Assets

Mutual funds	$	1,478	$	0	$	0	$	1,478	$	0		$	1,478
Commercial paper		0		319		0		319		0			319
Certificates of deposit		0		1,358		0		1,358		0			1,358
U.S. government and agency securities		109,228		2,616		0		111,844		0			111,844
Foreign government bonds		0		5,187		0		5,187		0			5,187
Mortgage- and asset-backed securities		0		3,934		0		3,934		0			3,934
Corporate notes and bonds		0		4,829		1		4,830		0			4,830
Municipal securities		0		327		0		327		0			327
Common and preferred stock		2,414		1,994		18		4,426		0			4,426
Derivatives		1		508		0		509		(227	)		282


Total	$	113,121	$	21,072	$	19	$	134,212	$	(227	)	$	133,985


Liabilities

Derivatives and other	$	0	$	345	$	39	$	384	$	(228	)	$	156

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

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

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

(In millions)


September 30, 2017				June 30, 2017

Net fair value of assets measured at fair value on a recurring basis	$	138,314		$	133,985
Cash		4,052			3,624
Common and preferred stock measured at fair value on a nonrecurring basis		1,020			1,073
Other investments measured at fair value on a nonrecurring basis		528			523
Less derivative net assets classified as other current and long-term assets		(103	)		(202	)
Other		3			1


Recorded basis of investment components	$	143,814		$	139,004

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

During the three months ended September 30, 2017 and 2016, 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

3 Months Ended

Sep. 30, 2017

INVENTORIES

NOTE 7 — INVENTORIES

The components of inventories were as follows:

(In millions)


	September 30, 2017		June 30, 2017

Raw materials	$	766	$	797
Work in process		112		145
Finished goods		2,333		1,239


Total	$	3,211	$	2,181

BUSINESS COMBINATIONS

3 Months Ended

Sep. 30, 2017

BUSINESS COMBINATIONS

NOTE 8 — BUSINESS COMBINATIONS

On December 8, 2016, we completed our acquisition of all issued and outstanding shares of LinkedIn Corporation, the world’s largest professional network on the Internet, for a total purchase price of $27.0 billion. The purchase price consisted primarily of cash of $26.9 billion. The acquisition is expected to accelerate the growth of LinkedIn, Office 365, and Dynamics 365. The financial results of LinkedIn have been included in our consolidated financial statements since the date of the acquisition.

GOODWILL

3 Months Ended

Sep. 30, 2017

GOODWILL

NOTE 9 — GOODWILL

Changes in the carrying amount of goodwill were as follows:

(In millions)	June 30, 2017		Acquisitions		Other			September 30, 2017


Productivity and Business Processes	$	23,739	$	0	$	51		$	23,790
Intelligent Cloud		5,555		68		(2	)		5,621
More Personal Computing		5,828		57		93			5,978


Total	$	35,122	$	125	$	142		$	35,389

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

3 Months Ended

Sep. 30, 2017

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


	September 30, 2017							June 30, 2017

Technology-based ^(a)	$	7,833	$	(4,686	)	$	3,147	$	7,765	$	(4,318	)	$	3,447
Marketing-related		4,040		(902	)		3,138		4,016		(829	)		3,187
Contract-based		819		(725	)		94		841		(722	)		119
Customer-related		4,049		(830	)		3,219		4,045		(692	)		3,353


Total	$	16,741	$	(7,143	)	$	9,598	$	16,667	$	(6,561	)	$	10,106

(a)	Technology-based intangible assets included $46 million and $59 million of net carrying amount of software to be sold, leased, or otherwise marketed as of September 30, 2017 and June 30, 2017, respectively.

Intangible assets amortization expense was $563 million and $214 million for the three months ended September 30, 2017 and 2016, respectively.

The following table outlines the estimated future amortization expense related to intangible assets held as of September 30, 2017:

(In millions)


Year Ending June 30,

2018 (excluding the three months ended September 30, 2017)	$	1,661
2019		1,701
2020		1,193
2021		1,006
2022		934
Thereafter		3,103


Total	$	9,598

DEBT

3 Months Ended

Sep. 30, 2017

DEBT

NOTE 11 — DEBT

Short-term Debt

As of September 30, 2017, we had $8.2 billion of commercial paper issued and outstanding, with a weighted average interest rate of 1.20% and maturities ranging from 34 days to 196 days. As of June 30, 2017, we had $9.1 billion of commercial paper issued and outstanding, with a weighted average interest rate of 1.01% and maturities ranging from 25 days to 264 days. The estimated fair value of this commercial paper approximates its carrying value.

We have two $5.0 billion credit facilities that expire on October 31, 2017 and November 14, 2018, respectively. We expect to enter into two new $5.0 billion credit facilities in October 2017 which will replace each of our existing facilities. These credit facilities serve as a back-up for our commercial paper program. As of September 30, 2017, 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 September 30, 2017, the total carrying value and estimated fair value of our long-term debt, including the current portion, were $77.3 billion and $81.3 billion, respectively. As of June 30, 2017, the total carrying value and estimated fair value of our long-term debt, including the current portion, were $77.1 billion and $80.3 billion, respectively. These estimated fair values are based on Level 2 inputs.

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

(In millions, except interest rates)	Face Value September 30, 2017		Face Value June 30, 2017		Stated Interest Rate		Effective Interest Rate


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		2,500		2,500		1.100%		1.203%
November 1, 2019		18		18		0.500%		0.500%
February 6, 2020		1,500		1,500		1.850%		1.952%
February 12, 2020		1,500		1,500		1.850%		1.935%
October 1, 2020		1,000		1,000		3.000%		3.137%
November 3, 2020		2,250		2,250		2.000%		2.093%
February 8, 2021		500		500		4.000%		4.082%
August 8, 2021		2,750		2,750		1.550%		1.642%
December 6, 2021 ^(a)		2,069		1,996		2.125%		2.233%
February 6, 2022		1,750		1,750		2.400%		2.520%
February 12, 2022		1,500		1,500		2.375%		2.466%
November 3, 2022		1,000		1,000		2.650%		2.717%
November 15, 2022		750		750		2.125%		2.239%
May 1, 2023		1,000		1,000		2.375%		2.465%
August 8, 2023		1,500		1,500		2.000%		2.101%
December 15, 2023		1,500		1,500		3.625%		3.726%
February 6, 2024		2,250		2,250		2.875%		3.041%
February 12, 2025		2,250		2,250		2.700%		2.772%
November 3, 2025		3,000		3,000		3.125%		3.176%
August 8, 2026		4,000		4,000		2.400%		2.464%
February 6, 2027		4,000		4,000		3.300%		3.383%
December 6, 2028 ^(a)		2,069		1,996		3.125%		3.218%
May 2, 2033 ⁽^a⁾		651		627		2.625%		2.690%
February 12, 2035		1,500		1,500		3.500%		3.604%
November 3, 2035		1,000		1,000		4.200%		4.260%
August 8, 2036		2,250		2,250		3.450%		3.510%
February 6, 2037		2,500		2,500		4.100%		4.152%
June 1, 2039		750		750		5.200%		5.240%
October 1, 2040		1,000		1,000		4.500%		4.567%
February 8, 2041		1,000		1,000		5.300%		5.361%
November 15, 2042		900		900		3.500%		3.571%
May 1, 2043		500		500		3.750%		3.829%
December 15, 2043		500		500		4.875%		4.918%
February 12, 2045		1,750		1,750		3.750%		3.800%
November 3, 2045		3,000		3,000		4.450%		4.492%
August 8, 2046		4,500		4,500		3.700%		3.743%
February 6, 2047		3,000		3,000		4.250%		4.287%
February 12, 2055		2,250		2,250		4.000%		4.063%
November 3, 2055		1,000		1,000		4.750%		4.782%
August 8, 2056		2,250		2,250		3.950%		4.033%
February 6, 2057		2,000		2,000		4.500%		4.528%


Total	$	78,007	$	77,837

(a)	Euro-denominated debt securities.

The notes in the table above are senior unsecured obligations and rank equally with our other senior unsecured debt outstanding. Interest on these notes is paid semi-annually, except for the euro-denominated debt securities on which interest is paid annually. As of September 30, 2017 and June 30, 2017, the aggregate debt issuance costs and unamortized discount associated with our long-term debt, including the current portion, were $702 million and $715 million, respectively.

INCOME TAXES

3 Months Ended

Sep. 30, 2017

INCOME TAXES

NOTE 12 — INCOME TAXES

Our effective tax rate for the three months ended September 30, 2017 and 2016 was 18% and 17%, 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.

The increase in our effective tax rate compared to the prior year was 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 $13.9 billion and $13.5 billion as of September 30, 2017 and June 30, 2017, respectively, and are included in other long-term liabilities. This increase relates primarily to current period intercompany transfer pricing.

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 September 30, 2017, the primary unresolved issue relates to transfer pricing, which could have a significant impact on our consolidated financial statements if not resolved favorably. We believe our allowances for income tax contingencies are adequate. We have not received a proposed assessment for the unresolved issues and do not expect a final resolution of these issues in the next 12 months. Based on the information currently available, we do not anticipate a significant increase or decrease to our tax contingencies for these issues within the next 12 months.

We are subject to income tax in many jurisdictions outside the U.S. Our operations in certain jurisdictions remain subject to examination for tax years 1996 to 2017, some of which are currently under audit by local tax authorities. The resolutions of these audits are not expected to be material to our consolidated financial statements.

RESTRUCTURING CHARGES

3 Months Ended

Sep. 30, 2017

RESTRUCTURING CHARGES

NOTE 13 — RESTRUCTURING CHARGES

In June 2017, management approved a sales and marketing restructuring plan. In fiscal year 2017, we recorded employee severance expenses of $306 million primarily related to this sales and marketing restructuring plan. We do not expect to incur additional charges for this restructuring plan in subsequent years. The actions associated with this restructuring plan are expected to be completed by the end of fiscal year 2018.

Changes in the restructuring liability were as follows:

(In millions)		Severance			Other	^(a)		Total


Balance, as of June 30, 2017	$	373		$	59		$	432
Restructuring charges		0			0			0
Cash paid		(179	)		(5	)		(184	)


Balance, as of September 30, 2017	$	194		$	54		$	248

(a)	Primarily reflects activities associated with the consolidation of our phone facilities, manufacturing operations, and contract termination costs.

UNEARNED REVENUE

3 Months Ended

Sep. 30, 2017

UNEARNED REVENUE

NOTE 14 — UNEARNED REVENUE

Unearned revenue by segment was as follows:

(In millions)


	September 30, 2017		June 30, 2017

Productivity and Business Processes	$	11,808	$	12,692
Intelligent Cloud		10,156		11,152
More Personal Computing		2,940		2,812


Total	$	24,904	$	26,656

The opening balance of unearned revenue was $22.2 billion as of July 1, 2016.

Changes in unearned revenue were as follows:

(In millions)


Three Months Ended September 30, 2017

Balance, beginning of period	$	26,656
Deferral of revenue		10,988
Recognition of unearned revenue		(12,740	)


Balance, end of period	$	24,904

Revenue allocated to remaining performance obligations represent contracted revenue that has not yet been recognized (“contracted not recognized”), which includes unearned revenue and amounts that will be invoiced and recognized as revenue in future periods. Contracted not recognized revenue was $59 billion as of September 30, 2017, of which we expect to recognize approximately 60% of the revenue over the next 12 months and the remainder thereafter.

LEASES

3 Months Ended

Sep. 30, 2017

LEASES

NOTE 15 — LEASES

We have operating and finance leases for datacenters, corporate offices, research and development facilities, retail stores, and certain equipment. Our leases have remaining lease terms of 1 year to 20 years, some of which may include options to extend the leases for up to 5 years, and some of which may include options to terminate the leases within 1 year. As of September 30, 2017 and June 30, 2017, assets recorded under finance leases were $3.4 billion and $2.7 billion, respectively, and accumulated depreciation associated with finance leases was $209 million and $161 million, respectively.

The components of lease expense were as follows:

(In millions)


Three Months Ended September 30,		2017		2016

Operating lease cost	$	388	$	260


Finance lease cost
Amortization of right-of-use assets	$	48	$	15
Interest on lease liabilities		30		12


Total finance lease cost	$	78	$	27

Other information related to leases was as follows:

(In millions, except lease term and discount rate)


Three Months Ended September 30,		2017			2016

Supplemental Cash Flows Information

Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	369		$	267
Operating cash flows from finance leases		30			12
Financing cash flows from finance leases		25			6

Right-of-use assets obtained in exchange for lease obligations:
Operating leases		391			55
Finance leases		728			267

Weighted Average Remaining Lease Term

Operating leases		7 years			5 years
Finance leases		14 years			12 years

Weighted Average Discount Rate

Operating leases		2.5	%		2.3	%
Finance leases		4.7	%		5.1	%

Future minimum lease payments under non-cancellable leases as of September 30, 2017 were as follows:

(In millions)


Year Ending June 30,	Operating Leases			Finance Leases

2018 (excluding the three months ended September 30, 2017)	$	1,110		$	205
2019		1,385			281
2020		1,267			287
2021		1,022			293
2022		833			299
Thereafter		2,333			3,133


Total future minimum lease payments		7,950			4,498
Less imputed interest		(930	)		(1,225	)


Total	$	7,020		$	3,273


Reported as of September 30, 2017

Other current liabilities	$	1,252		$	146
Operating lease liabilities		5,768			0
Other long-term liabilities		0			3,127


Total	$	7,020		$	3,273

As of September 30, 2017, we have additional operating and finance leases, primarily for datacenters, that have not yet commenced of $219 million and $2.3 billion, respectively. These operating and finance leases will commence between fiscal year 2018 and fiscal year 2019 with lease terms of 1 year to 20 years.

CONTINGENCIES

3 Months Ended

Sep. 30, 2017

CONTINGENCIES

NOTE 16 — CONTINGENCIES

Patent and Intellectual Property Claims

IPCom Patent Litigation

IPCom GmbH & Co. (“IPCom”) is a German company that holds a large portfolio of mobile technology-related patents 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 cellular 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, which continue.

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 July 2016, 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. We reached a final settlement of the pending cases in October 2017.

Other Patent and Intellectual Property Claims

In addition to the IPCom cases, there were 40 other patent infringement cases pending against Microsoft as of September 30, 2017.

Antitrust, Unfair Competition, and Overcharge Class Actions

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

The trial of the British Columbia action commenced in May 2016. The plaintiffs filed their case in chief in August 2016, setting out claims made, authorities, and evidence in support of their claims. A six-month oral hearing is expected to begin in summer 2018, consisting of cross examination on witness affidavits. The Ontario and Quebec cases are inactive.

Other Antitrust Litigation and Claims

China State Administration for Industry and Commerce Investigation

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

Product-Related Litigation

U.S. Cell Phone Litigation

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 in our agreement to acquire Nokia’s Devices and Services business and have been substituted for the Nokia defendants. Nine of these cases were filed in 2002 and are consolidated for certain pre-trial proceedings; the remaining 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 supplemental expert evidence, portions of which defendants have moved to strike.

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, alleging adverse health effects from cellular phone use. Microsoft was served with the complaint in June 2014 and has been substituted for the Nokia defendants. The litigation has been dormant for more than three years.

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 September 30, 2017, we accrued aggregate legal liabilities of $371 million. While we intend to defend these matters vigorously, adverse outcomes that we estimate could reach approximately $1.1 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

3 Months Ended

Sep. 30, 2017

STOCKHOLDERS' EQUITY

NOTE 17 — STOCKHOLDERS’ EQUITY

Share Repurchases

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

On September 20, 2016, our Board of Directors approved a share repurchase program authorizing up to an additional $40.0 billion in share repurchases. This share repurchase program commenced on December 22, 2016 following completion of the prior program approved on September 16, 2013, has no expiration date, and may be suspended or discontinued at any time without notice. As of September 30, 2017, $35.2 billion remained of this $40.0 billion share repurchase program.

We repurchased the following shares of common stock under the share repurchase programs:

(In millions)	Shares		Amount			Shares		Amount


Fiscal Year				2018					2017

First Quarter		22		$	1,600		63		$	3,550

Shares repurchased during the first quarter of fiscal year 2018 were under the share repurchase program approved September 20, 2016. Shares repurchased during the first quarter of fiscal year 2017 were under the share repurchase program approved September 16, 2013. The above table excludes shares repurchased to settle employee tax withholding related to the vesting of stock awards. All repurchases were made using cash resources.

Dividends

Our Board of Directors declared the following dividends:

Declaration Date	Dividend Per Share		Record Date		Total Amount		Payment Date


					(in millions)

September 19, 2017	$	0.42		November 16, 2017	$	3,242		December 14, 2017
September 20, 2016	$	0.39		November 17, 2016	$	3,024		December 8, 2016

The dividend declared on September 19, 2017 was included in other current liabilities as of September 30, 2017.

ACCUMULATED OTHER COMPREHENSIVE INCOME

3 Months Ended

Sep. 30, 2017

ACCUMULATED OTHER COMPREHENSIVE INCOME

NOTE 18 — ACCUMULATED OTHER COMPREHENSIVE INCOME

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

(In millions)


Three Months Ended September 30,	2017			2016

Derivatives

Balance, beginning of period	$	134		$	352
Unrealized gains, net of tax of $0 and $1		4			35

Reclassification adjustments for gains included in revenue		(111	)		(75	)
Tax expense included in provision for income taxes		1			3


Amounts reclassified from accumulated other comprehensive income		(110	)		(72	)


Net change related to derivatives, net of tax of $(1) and $(2)		(106	)		(37	)


Balance, end of period	$	28		$	315


Investments

Balance, beginning of period	$	1,825		$	2,941
Unrealized gains, net of tax effects of $50 and $182		73			339

Reclassification adjustments for gains included in other income (expense), net		(555	)		(394	)
Tax expense included in provision for income taxes		194			138


Amounts reclassified from accumulated other comprehensive income		(361	)		(256	)


Net change related to investments, net of tax of $(144) and $44		(288	)		83


Balance, end of period	$	1,537		$	3,024


Translation Adjustments and Other

Balance, beginning of period	$	(1,332	)	$	(1,499	)
Translation adjustments and other, net of tax of $(1) and $7		293			118


Balance, end of period	$	(1,039	)	$	(1,381	)


Accumulated other comprehensive income, end of period	$	526		$	1,958

SEGMENT INFORMATION AND GEOGRAPHIC DATA

3 Months Ended

Sep. 30, 2017

SEGMENT INFORMATION AND GEOGRAPHIC DATA

NOTE 19 — SEGMENT INFORMATION AND GEOGRAPHIC DATA

In its operation of the business, management, including our chief operating decision maker, who is also our Chief Executive Officer, reviews certain financial information, including segmented internal profit and loss statements prepared on a basis not consistent with 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.

Our reportable segments are described below.

Productivity and Business Processes

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

•

Office Commercial, including Office 365 subscriptions and Office licensed on-premises, comprising Office, Exchange, SharePoint, Skype for Business, and Microsoft Teams, and related Client Access Licenses (“CALs”).

•

Office Consumer, including Office 365 subscriptions and Office licensed on-premises, and Office Consumer Services, including Skype, Outlook.com, and OneDrive.

•

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

•

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

Intelligent Cloud

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

•

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

•

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

More Personal Computing

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

•

Windows, including Windows original equipment manufacturer licensing and other non-volume licensing of the Windows operating system; Windows Commercial, comprising volume licensing of the Windows operating system, Windows cloud services, and other Windows commercial offerings; patent licensing; Windows Internet of Things (“IoT”); and MSN display advertising.

•

Devices, including Microsoft Surface, PC accessories, and other intelligent devices.

•

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

•

Search advertising.

Revenue and costs are generally directly attributed to our segments. However, due to the integrated structure of our business, certain revenue recognized and costs incurred by one segment may benefit other segments. Revenue from certain contracts is allocated among the segments based on the relative value of the underlying products and services, which can include allocation based on actual prices charged, prices when sold separately, or estimated costs plus a profit margin. Cost of revenue is allocated in certain cases based on a relative revenue methodology. Operating expenses that are allocated primarily include those relating to marketing of products and services from which multiple segments benefit, and are generally allocated based on relative gross margin.

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

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

(In millions)


Three Months Ended September 30,	2017		2016

Revenue

Productivity and Business Processes	$	8,238	$	6,436
Intelligent Cloud		6,922		6,097
More Personal Computing		9,378		9,395


Total	$	24,538	$	21,928


Operating Income

Productivity and Business Processes	$	3,006	$	2,905
Intelligent Cloud		2,137		1,777
More Personal Computing		2,565		2,033


Total	$	7,708	$	6,715

No sales to an individual customer or country other than the United States accounted for more than 10% of revenue for the three months ended September 30, 2017 or 2016. Revenue, classified by the major geographic areas in which our customers are located, was as follows:

(In millions)


Three Months Ended September 30,	2017		2016

United States ^(a)	$	12,527	$	11,215
Other countries		12,011		10,713


Total	$	24,538	$	21,928

(a)	Includes billings to original equipment manufacturers and certain multinational organizations because of the nature of these businesses and the impracticability of determining the geographic source of the revenue.

Revenue from external customers, classified by significant product and service offerings, was as follows:

(In millions)


Three Months Ended September 30,	2017		2016

Office products and cloud services	$	6,575	$	5,982
Server products and cloud services		5,496		4,689
Windows		4,643		4,643
Gaming		1,896		1,885
Search advertising		1,639		1,429
Enterprise Services		1,371		1,355
Devices		1,154		1,362
LinkedIn		1,148		0
Other		616		583


Total	$	24,538	$	21,928

Our total commercial cloud revenue, which primarily comprises Office 365 commercial, Azure, Dynamics 365, and other cloud properties, was $5.0 billion and $3.2 billion for the three months ended September 30, 2017 and 2016, respectively. These amounts are primarily included in Office products and cloud services and server products and cloud services in the table above.

Assets are not allocated to segments for internal reporting presentations. A portion of amortization and depreciation is included with various other costs in an overhead allocation to each segment; it is impracticable for us to separately identify the amount of amortization and depreciation by segment that is included in the measure of segment profit or loss.

ACCOUNTING POLICIES (Policies)

3 Months Ended

Sep. 30, 2017

Accounting Principles

Principles of Consolidation

Estimates and Assumptions

Product Revenue and Service and Other Revenue

Revenue Recognition

Nature of Products and Services

Refer to Note 19 – Segment Information and Geographic Data for further information, including revenue by significant product and service offering.

Significant Judgments

Contract Balances

The opening balance of current and long-term accounts receivable, net of allowance for doubtful accounts, was $22.3 billion as of July 1, 2016.

Activity in the allowance for doubtful accounts was as follows:


(In millions)


Three Months Ended September 30, 2017

Balance, beginning of period	$	361
Charged to costs and other		(45	)
Write-offs		(16	)


Balance, end of period	$	300


Reported as of September 30, 2017

Accounts receivable, net of allowance for doubtful accounts	$	285
Other long-term assets		15


Total	$	300

Refer to Note 14 – Unearned Revenue for further information, including unearned revenue by segment and changes in unearned revenue during the period.

Assets Recognized from the Costs to Obtain a Contract with a Customer

Leases

Recent Accounting Guidance

Recently Adopted Accounting Guidance

Leases

Revenue from Contracts with Customers

Impacts to Previously Reported Results

Adoption of the standards related to revenue recognition and leases impacted our previously reported results as follows:

(In millions, except per share amounts)	As Previously Reported		New Revenue Standard Adjustment		As Restated


Three Months Ended September 30, 2016

Income Statements

Revenue	$	20,453	$	1,475	$	21,928
Provision for income taxes		635		525		1,160
Net income		4,690		977		5,667
Diluted earnings per share		0.60		0.12		0.72

(In millions)	As Previously Reported		New Revenue Standard Adjustment			New Lease Standard Adjustment		As Restated


June 30, 2017

Balance Sheets

Accounts receivable, net of allowance for doubtful accounts	$	19,792	$	2,639		$	0	$	22,431
Operating lease right-of-use assets		0		0			6,555		6,555
Other current and long-term assets		11,147		32			0		11,179
Unearned revenue		44,479		(17,823	)		0		26,656
Deferred income taxes		531		5,203			0		5,734
Operating lease liabilities		0		0			5,372		5,372
Other current and long-term liabilities		23,464		(26	)		1,183		24,621
Stockholders' equity		72,394		15,317			0		87,711

Adoption of the standards related to revenue recognition and leases had no impact to cash from or used in operating, financing, or investing on our consolidated cash flows statements.

Recent Accounting Guidance Not Yet Adopted

Financial Instruments – Targeted Improvements to Accounting for Hedging Activities

Accounting for Income Taxes – Intra-Entity Asset Transfers

Financial Instruments – Credit Losses

Financial Instruments – Recognition, Measurement, Presentation, and Disclosure

Earnings Per Share

Derivatives Instruments

Fair Value Measurements

•

Our other current financial assets and current financial liabilities have fair values that approximate their carrying values.

Segment Reporting

ACCOUNTING POLICIES (Tables)

3 Months Ended

Sep. 30, 2017

Allowance for Doubtful Accounts

Activity in the allowance for doubtful accounts was as follows:


(In millions)


Three Months Ended September 30, 2017

Balance, beginning of period	$	361
Charged to costs and other		(45	)
Write-offs		(16	)


Balance, end of period	$	300


Reported as of September 30, 2017

Accounts receivable, net of allowance for doubtful accounts	$	285
Other long-term assets		15


Total	$	300

Impacts of Adoption of Standards Related to Revenue Recognition and Leases to Previously Reported Results

Adoption of the standards related to revenue recognition and leases impacted our previously reported results as follows:

(In millions, except per share amounts)	As Previously Reported		New Revenue Standard Adjustment		As Restated


Three Months Ended September 30, 2016

Income Statements

Revenue	$	20,453	$	1,475	$	21,928
Provision for income taxes		635		525		1,160
Net income		4,690		977		5,667
Diluted earnings per share		0.60		0.12		0.72

(In millions)	As Previously Reported		New Revenue Standard Adjustment			New Lease Standard Adjustment		As Restated


June 30, 2017

Balance Sheets

Accounts receivable, net of allowance for doubtful accounts	$	19,792	$	2,639		$	0	$	22,431
Operating lease right-of-use assets		0		0			6,555		6,555
Other current and long-term assets		11,147		32			0		11,179
Unearned revenue		44,479		(17,823	)		0		26,656
Deferred income taxes		531		5,203			0		5,734
Operating lease liabilities		0		0			5,372		5,372
Other current and long-term liabilities		23,464		(26	)		1,183		24,621
Stockholders' equity		72,394		15,317			0		87,711

EARNINGS PER SHARE (Tables)

3 Months Ended

Sep. 30, 2017

Basic and Diluted Earnings Per Share

The components of basic and diluted EPS were as follows:

(In millions, except per share amounts)


Three Months Ended September 30,	2017		2016

Net income available for common shareholders (A)	$	6,576	$	5,667


Weighted average outstanding shares of common stock (B)		7,708		7,789
Dilutive effect of stock-based awards		91		87


Common stock and common stock equivalents (C)		7,799		7,876


Earnings Per Share

Basic (A/B)	$	0.85	$	0.73
Diluted (A/C)	$	0.84	$	0.72

OTHER INCOME (EXPENSE), NET (Tables)

3 Months Ended

Sep. 30, 2017

Components of Other Income (Expense), Net

The components of other income (expense), net were as follows:

(In millions)


Three Months Ended September 30,	2017			2016

Dividends and interest income	$	473		$	293
Interest expense		(672	)		(437	)
Net recognized gains on investments		573			405
Net losses on derivatives		(50	)		(94	)
Net losses on foreign currency remeasurements		(9	)		(40	)
Other, net		(39	)		(15	)


Total	$	276		$	112

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 September 30,	2017			2016

Other-than-temporary impairments of investments	$	(6	)	$	(18	)
Realized gains from sales of available-for-sale securities		671			483
Realized losses from sales of available-for-sale securities		(92	)		(60	)


Total	$	573		$	405

INVESTMENTS (Tables)

3 Months Ended

Sep. 30, 2017

Investment Components, Including Associated Derivatives

The components of investments, including associated derivatives, were as follows:

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


September 30, 2017

Cash	$	4,052	$	0	$	0		$	4,052	$	4,052	$	0	$	0
Mutual funds		1,040		0		0			1,040		1,040		0		0
Commercial paper		833		0		0			833		384		449		0
Certificates of deposit		1,430		0		0			1,430		1,252		178		0
U.S. government and agency securities		117,222		66		(344	)		116,944		155		116,789		0
Foreign government bonds		5,150		2		(12	)		5,140		1		5,139		0
Mortgage- and asset-backed securities		3,771		10		(4	)		3,777		0		3,777		0
Corporate notes and bonds		4,872		62		(9	)		4,925		0		4,925		0
Municipal securities		284		46		0			330		0		330		0
Common and preferred stock		2,220		2,604		(9	)		4,815		0		0		4,815
Other investments		528		0		0			528		0		0		528


Total	$	141,402	$	2,790	$	(378	)	$	143,814	$	6,884	$	131,587	$	5,343

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


June 30, 2017

Cash	$	3,624	$	0	$	0		$	3,624	$	3,624	$	0	$	0
Mutual funds		1,478		0		0			1,478		1,478		0		0
Commercial paper		319		0		0			319		69		250		0
Certificates of deposit		1,358		0		0			1,358		972		386		0
U.S. government and agency securities		112,119		85		(360	)		111,844		16		111,828		0
Foreign government bonds		5,276		2		(13	)		5,265		1,504		3,761		0
Mortgage- and asset-backed securities		3,921		14		(4	)		3,931		0		3,931		0
Corporate notes and bonds		4,786		61		(12	)		4,835		0		4,835		0
Municipal securities		284		43		0			327		0		327		0
Common and preferred stock		2,472		3,062		(34	)		5,500		0		0		5,500
Other investments		523		0		0			523		0		0		523


Total	$	136,160	$	3,267	$	(423	)	$	139,004	$	7,663	$	125,318	$	6,023

Unrealized Losses on Investments

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

	Less than 12 Months					12 Months or Greater								Total Unrealized Losses


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


September 30, 2017

U.S. government and agency securities	$	98,245	$	(290	)	$	4,957	$	(54	)	$	103,202	$	(344	)
Foreign government bonds		4,972		(1	)		24		(11	)		4,996		(12	)
Mortgage- and asset-backed securities		713		(2	)		236		(2	)		949		(4	)
Corporate notes and bonds		502		(4	)		283		(5	)		785		(9	)
Common and preferred stock		30		0			59		(9	)		89		(9	)


Total	$	104,462	$	(297	)	$	5,559	$	(81	)	$	110,021	$	(378	)

	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, 2017

U.S. government and agency securities	$	87,558	$	(348	)	$	371	$	(12	)	$	87,929	$	(360	)
Foreign government bonds		4,006		(2	)		23		(11	)		4,029		(13	)
Mortgage- and asset-backed securities		1,068		(3	)		198		(1	)		1,266		(4	)
Corporate notes and bonds		669		(8	)		177		(4	)		846		(12	)
Common and preferred stock		69		(6	)		148		(28	)		217		(34	)


Total	$	93,370	$	(367	)	$	917	$	(56	)	$	94,287	$	(423	)

Debt Investment Maturities

(In millions)	Cost Basis		Estimated Fair Value


September 30, 2017

Due in one year or less	$	22,611	$	22,558
Due after one year through five years		101,909		101,734
Due after five years through 10 years		8,121		8,145
Due after 10 years		921		942


Total	$	133,562	$	133,379

DERIVATIVES (Tables)

3 Months Ended

Sep. 30, 2017

Fair Values of Derivative Instruments

	Assets												Liabilities


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


September 30, 2017

Non-designated Hedge Derivatives

Foreign exchange contracts	$	10		$	93		$	0		$	14		$	(83	)	$	(7	)
Equity contracts		5			0			0			0			(16	)		0
Interest rate contracts		4			0			0			0			(8	)		0
Credit contracts		4			0			0			0			(1	)		0


Total	$	23		$	93		$	0		$	14		$	(108	)	$	(7	)


Designated Hedge Derivatives

Foreign exchange contracts	$	81		$	89		$	0		$	6		$	(3	)	$	0
Equity contracts		0			0			23			0			(337	)		0


Total	$	81		$	89		$	23		$	6		$	(340	)	$	0


Total gross amounts of derivatives	$	104		$	182		$	23		$	20		$	(448	)	$	(7	)


Gross derivatives either offset or subject to an enforceable master netting agreement	$	104		$	182		$	23		$	20		$	(444	)	$	(7	)
Gross amounts of derivatives offset on the balance sheet		(18	)		(92	)		(23	)		(7	)		133			7


Net amounts presented on the balance sheet		86			90			0			13			(311	)		0
Gross amounts of derivatives not offset on the balance sheet		0			0			0			0			0			0
Cash collateral received		0			0			0			0			(134	)		0


Net amount	$	86		$	90		$	0		$	13		$	(445	)	$	0

	Assets																Liabilities


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


June 30, 2017

Non-designated Hedge Derivatives

Foreign exchange contracts	$	9			$	203			$	0			$	6			$	(134	)		$	(8	)
Equity contracts		3				0				0				0				(6	)			0
Interest rate contracts		3				0				0				0				(7	)			0
Credit contracts		5				0				0				0				(1	)			0


Total	$	20			$	203			$	0			$	6			$	(148	)		$	(8	)


Designated Hedge Derivatives

Foreign exchange contracts	$	80			$	133			$	0			$	0			$	(3	)		$	0
Equity contracts		0				0				67				0				(186	)			0


Total	$	80			$	133			$	67			$	0			$	(189	)		$	0


Total gross amounts of derivatives	$	100			$	336			$	67			$	6			$	(337	)		$	(8	)


Gross derivatives either offset or subject to an enforceable master netting agreement	$	100			$	336			$	67			$	6			$	(334	)		$	(8	)
Gross amounts of derivatives offset on the balance sheet		(20	)			(132	)			(67	)			(8	)			221				7


Net amounts presented on the balance sheet		80				204				0				(2	)			(113	)			(1	)
Gross amounts of derivatives not offset on the balance sheet		0				0				0				0				0				0
Cash collateral received		0				0				0				0				(228	)			0


Net amount	$	80			$	204			$	0			$	(2	)		$	(341	)		$	(1	)

Non-designated Hedge Derivatives

Gains (Losses) on Derivative Instruments

(In millions)


Three Months Ended September 30,	2017			2016

Foreign exchange contracts	$	(69	)	$	(31	)
Equity contracts		(29	)		(17	)
Interest-rate contracts		11			4
Credit contracts		0			2
Other contracts		0			(22	)


Total	$	(87	)	$	(64	)

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 September 30,	2017			2016

Foreign Exchange Contracts

Derivatives	$	22		$	(48	)
Hedged items		(2	)		68


Total amount of ineffectiveness	$	20		$	20


Equity Contracts

Derivatives	$	(236	)	$	(10	)
Hedged items		236			10


Total amount of ineffectiveness	$	0		$	0


Amount of equity contracts excluded from effectiveness assessment	$	40		$	(3	)

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 September 30,	2017			2016

Effective Portion

Gains recognized in other comprehensive income (net of tax of $0 and $1)	$	5		$	35
Gains reclassified from accumulated other comprehensive income into revenue		111			75

Amount Excluded from Effectiveness Assessment and Ineffective Portion

Losses recognized in other income (expense), net		(91	)		(70	)

FAIR VALUE MEASUREMENTS (Tables)

3 Months Ended

Sep. 30, 2017

Financial Assets and Liabilities Measured at Fair Value on Recurring Basis

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

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


September 30, 2017

Assets

Mutual funds	$	1,040	$	0	$	0	$	1,040	$	0		$	1,040
Commercial paper		0		833		0		833		0			833
Certificates of deposit		0		1,430		0		1,430		0			1,430
U.S. government and agency securities		114,965		1,979		0		116,944		0			116,944
Foreign government bonds		16		5,042		0		5,058		0			5,058
Mortgage- and asset-backed securities		0		3,781		0		3,781		0			3,781
Corporate notes and bonds		0		4,915		1		4,916		0			4,916
Municipal securities		0		330		0		330		0			330
Common and preferred stock		2,429		1,346		18		3,793		0			3,793
Derivatives		2		327		0		329		(140	)		189


Total	$	118,452	$	19,983	$	19	$	138,454	$	(140	)	$	138,314


Liabilities

Derivatives and other	$	16	$	439	$	38	$	493	$	(140	)	$	353

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


June 30, 2017

Assets

Mutual funds	$	1,478	$	0	$	0	$	1,478	$	0		$	1,478
Commercial paper		0		319		0		319		0			319
Certificates of deposit		0		1,358		0		1,358		0			1,358
U.S. government and agency securities		109,228		2,616		0		111,844		0			111,844
Foreign government bonds		0		5,187		0		5,187		0			5,187
Mortgage- and asset-backed securities		0		3,934		0		3,934		0			3,934
Corporate notes and bonds		0		4,829		1		4,830		0			4,830
Municipal securities		0		327		0		327		0			327
Common and preferred stock		2,414		1,994		18		4,426		0			4,426
Derivatives		1		508		0		509		(227	)		282


Total	$	113,121	$	21,072	$	19	$	134,212	$	(227	)	$	133,985


Liabilities

Derivatives and other	$	0	$	345	$	39	$	384	$	(228	)	$	156

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

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

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

(In millions)


September 30, 2017				June 30, 2017

Net fair value of assets measured at fair value on a recurring basis	$	138,314		$	133,985
Cash		4,052			3,624
Common and preferred stock measured at fair value on a nonrecurring basis		1,020			1,073
Other investments measured at fair value on a nonrecurring basis		528			523
Less derivative net assets classified as other current and long-term assets		(103	)		(202	)
Other		3			1


Recorded basis of investment components	$	143,814		$	139,004

INVENTORIES (Tables)

3 Months Ended

Sep. 30, 2017

Components of Inventories

The components of inventories were as follows:

(In millions)


	September 30, 2017		June 30, 2017

Raw materials	$	766	$	797
Work in process		112		145
Finished goods		2,333		1,239


Total	$	3,211	$	2,181

GOODWILL (Tables)

3 Months Ended

Sep. 30, 2017

Carrying Amount of Goodwill

Changes in the carrying amount of goodwill were as follows:

(In millions)	June 30, 2017		Acquisitions		Other			September 30, 2017


Productivity and Business Processes	$	23,739	$	0	$	51		$	23,790
Intelligent Cloud		5,555		68		(2	)		5,621
More Personal Computing		5,828		57		93			5,978


Total	$	35,122	$	125	$	142		$	35,389

INTANGIBLE ASSETS (Tables)

3 Months Ended

Sep. 30, 2017

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


	September 30, 2017							June 30, 2017

Technology-based ^(a)	$	7,833	$	(4,686	)	$	3,147	$	7,765	$	(4,318	)	$	3,447
Marketing-related		4,040		(902	)		3,138		4,016		(829	)		3,187
Contract-based		819		(725	)		94		841		(722	)		119
Customer-related		4,049		(830	)		3,219		4,045		(692	)		3,353


Total	$	16,741	$	(7,143	)	$	9,598	$	16,667	$	(6,561	)	$	10,106

(a)	Technology-based intangible assets included $46 million and $59 million of net carrying amount of software to be sold, leased, or otherwise marketed as of September 30, 2017 and June 30, 2017, respectively.

Estimated Future Amortization Expense Related to Intangible Assets

The following table outlines the estimated future amortization expense related to intangible assets held as of September 30, 2017:

(In millions)


Year Ending June 30,

2018 (excluding the three months ended September 30, 2017)	$	1,661
2019		1,701
2020		1,193
2021		1,006
2022		934
Thereafter		3,103


Total	$	9,598

DEBT (Tables)

3 Months Ended

Sep. 30, 2017

Long-term Debt

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

(In millions, except interest rates)	Face Value September 30, 2017		Face Value June 30, 2017		Stated Interest Rate		Effective Interest Rate


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		2,500		2,500		1.100%		1.203%
November 1, 2019		18		18		0.500%		0.500%
February 6, 2020		1,500		1,500		1.850%		1.952%
February 12, 2020		1,500		1,500		1.850%		1.935%
October 1, 2020		1,000		1,000		3.000%		3.137%
November 3, 2020		2,250		2,250		2.000%		2.093%
February 8, 2021		500		500		4.000%		4.082%
August 8, 2021		2,750		2,750		1.550%		1.642%
December 6, 2021 ^(a)		2,069		1,996		2.125%		2.233%
February 6, 2022		1,750		1,750		2.400%		2.520%
February 12, 2022		1,500		1,500		2.375%		2.466%
November 3, 2022		1,000		1,000		2.650%		2.717%
November 15, 2022		750		750		2.125%		2.239%
May 1, 2023		1,000		1,000		2.375%		2.465%
August 8, 2023		1,500		1,500		2.000%		2.101%
December 15, 2023		1,500		1,500		3.625%		3.726%
February 6, 2024		2,250		2,250		2.875%		3.041%
February 12, 2025		2,250		2,250		2.700%		2.772%
November 3, 2025		3,000		3,000		3.125%		3.176%
August 8, 2026		4,000		4,000		2.400%		2.464%
February 6, 2027		4,000		4,000		3.300%		3.383%
December 6, 2028 ^(a)		2,069		1,996		3.125%		3.218%
May 2, 2033 ⁽^a⁾		651		627		2.625%		2.690%
February 12, 2035		1,500		1,500		3.500%		3.604%
November 3, 2035		1,000		1,000		4.200%		4.260%
August 8, 2036		2,250		2,250		3.450%		3.510%
February 6, 2037		2,500		2,500		4.100%		4.152%
June 1, 2039		750		750		5.200%		5.240%
October 1, 2040		1,000		1,000		4.500%		4.567%
February 8, 2041		1,000		1,000		5.300%		5.361%
November 15, 2042		900		900		3.500%		3.571%
May 1, 2043		500		500		3.750%		3.829%
December 15, 2043		500		500		4.875%		4.918%
February 12, 2045		1,750		1,750		3.750%		3.800%
November 3, 2045		3,000		3,000		4.450%		4.492%
August 8, 2046		4,500		4,500		3.700%		3.743%
February 6, 2047		3,000		3,000		4.250%		4.287%
February 12, 2055		2,250		2,250		4.000%		4.063%
November 3, 2055		1,000		1,000		4.750%		4.782%
August 8, 2056		2,250		2,250		3.950%		4.033%
February 6, 2057		2,000		2,000		4.500%		4.528%


Total	$	78,007	$	77,837

(a)	Euro-denominated debt securities.

- 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
-Publisher FASB
-Name Accounting Standards Codification
-Topic 210
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02.22)
-URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=84159872&loc=d3e21475-112644

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
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-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=75038535&loc=d3e64711-112823

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08.(e),(f))
-URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 835
-SubTopic 30
-Section 55
-Paragraph 8
-URI http://asc.fasb.org/extlink&oid=64930739&loc=d3e28878-108400

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 8
-URI http://asc.fasb.org/extlink&oid=84159872&loc=d3e21538-112644

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
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-Paragraph 6
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Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 835
-SubTopic 30
-Section 45
-Paragraph 1A
-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=84159872&loc=d3e21521-112644

+ Details

RESTRUCTURING CHARGES (Tables)

3 Months Ended

Sep. 30, 2017

Changes in Restructuring Liability

Changes in the restructuring liability were as follows:

(In millions)		Severance			Other	^(a)		Total


Balance, as of June 30, 2017	$	373		$	59		$	432
Restructuring charges		0			0			0
Cash paid		(179	)		(5	)		(184	)


Balance, as of September 30, 2017	$	194		$	54		$	248

(a)	Primarily reflects activities associated with the consolidation of our phone facilities, manufacturing operations, and contract termination costs.

UNEARNED REVENUE (Tables)

3 Months Ended

Sep. 30, 2017

Unearned Revenue by Segment

Unearned revenue by segment was as follows:

(In millions)


	September 30, 2017		June 30, 2017

Productivity and Business Processes	$	11,808	$	12,692
Intelligent Cloud		10,156		11,152
More Personal Computing		2,940		2,812


Total	$	24,904	$	26,656

Changes in Unearned Revenue

Changes in unearned revenue were as follows:

(In millions)


Three Months Ended September 30, 2017

Balance, beginning of period	$	26,656
Deferral of revenue		10,988
Recognition of unearned revenue		(12,740	)


Balance, end of period	$	24,904

LEASES (Tables)

3 Months Ended

Sep. 30, 2017

Components of Lease Expense

The components of lease expense were as follows:

(In millions)


Three Months Ended September 30,		2017		2016

Operating lease cost	$	388	$	260


Finance lease cost
Amortization of right-of-use assets	$	48	$	15
Interest on lease liabilities		30		12


Total finance lease cost	$	78	$	27

Other Information Related to Leases

Other information related to leases was as follows:

(In millions, except lease term and discount rate)


Three Months Ended September 30,		2017			2016

Supplemental Cash Flows Information

Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	369		$	267
Operating cash flows from finance leases		30			12
Financing cash flows from finance leases		25			6

Right-of-use assets obtained in exchange for lease obligations:
Operating leases		391			55
Finance leases		728			267

Weighted Average Remaining Lease Term

Operating leases		7 years			5 years
Finance leases		14 years			12 years

Weighted Average Discount Rate

Operating leases		2.5	%		2.3	%
Finance leases		4.7	%		5.1	%

Future Minimum Lease Payments Under Non-Cancellable Leases

Future minimum lease payments under non-cancellable leases as of September 30, 2017 were as follows:

(In millions)


Year Ending June 30,	Operating Leases			Finance Leases

2018 (excluding the three months ended September 30, 2017)	$	1,110		$	205
2019		1,385			281
2020		1,267			287
2021		1,022			293
2022		833			299
Thereafter		2,333			3,133


Total future minimum lease payments		7,950			4,498
Less imputed interest		(930	)		(1,225	)


Total	$	7,020		$	3,273


Reported as of September 30, 2017

Other current liabilities	$	1,252		$	146
Operating lease liabilities		5,768			0
Other long-term liabilities		0			3,127


Total	$	7,020		$	3,273

STOCKHOLDERS' EQUITY (Tables)

3 Months Ended

Sep. 30, 2017

Share Repurchases

We repurchased the following shares of common stock under the share repurchase programs:

(In millions)	Shares		Amount			Shares		Amount


Fiscal Year				2018					2017

First Quarter		22		$	1,600		63		$	3,550

Dividends Declared

Our Board of Directors declared the following dividends:

Declaration Date	Dividend Per Share		Record Date		Total Amount		Payment Date


					(in millions)

September 19, 2017	$	0.42		November 16, 2017	$	3,242		December 14, 2017
September 20, 2016	$	0.39		November 17, 2016	$	3,024		December 8, 2016

ACCUMULATED OTHER COMPREHENSIVE INCOME (Tables)

3 Months Ended

Sep. 30, 2017

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 September 30,	2017			2016

Derivatives

Balance, beginning of period	$	134		$	352
Unrealized gains, net of tax of $0 and $1		4			35

Reclassification adjustments for gains included in revenue		(111	)		(75	)
Tax expense included in provision for income taxes		1			3


Amounts reclassified from accumulated other comprehensive income		(110	)		(72	)


Net change related to derivatives, net of tax of $(1) and $(2)		(106	)		(37	)


Balance, end of period	$	28		$	315


Investments

Balance, beginning of period	$	1,825		$	2,941
Unrealized gains, net of tax effects of $50 and $182		73			339

Reclassification adjustments for gains included in other income (expense), net		(555	)		(394	)
Tax expense included in provision for income taxes		194			138


Amounts reclassified from accumulated other comprehensive income		(361	)		(256	)


Net change related to investments, net of tax of $(144) and $44		(288	)		83


Balance, end of period	$	1,537		$	3,024


Translation Adjustments and Other

Balance, beginning of period	$	(1,332	)	$	(1,499	)
Translation adjustments and other, net of tax of $(1) and $7		293			118


Balance, end of period	$	(1,039	)	$	(1,381	)


Accumulated other comprehensive income, end of period	$	526		$	1,958

SEGMENT INFORMATION AND GEOGRAPHIC DATA (Tables)

3 Months Ended

Sep. 30, 2017

Segment Revenue

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

(In millions)


Three Months Ended September 30,	2017		2016

Revenue

Productivity and Business Processes	$	8,238	$	6,436
Intelligent Cloud		6,922		6,097
More Personal Computing		9,378		9,395


Total	$	24,538	$	21,928


Operating Income

Productivity and Business Processes	$	3,006	$	2,905
Intelligent Cloud		2,137		1,777
More Personal Computing		2,565		2,033


Total	$	7,708	$	6,715

Segment Operating Income

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

(In millions)


Three Months Ended September 30,	2017		2016

Revenue

Productivity and Business Processes	$	8,238	$	6,436
Intelligent Cloud		6,922		6,097
More Personal Computing		9,378		9,395


Total	$	24,538	$	21,928


Operating Income

Productivity and Business Processes	$	3,006	$	2,905
Intelligent Cloud		2,137		1,777
More Personal Computing		2,565		2,033


Total	$	7,708	$	6,715

Revenue Classified by Major Geographic Areas

Revenue, classified by the major geographic areas in which our customers are located, was as follows:

(In millions)


Three Months Ended September 30,	2017		2016

United States ^(a)	$	12,527	$	11,215
Other countries		12,011		10,713


Total	$	24,538	$	21,928

(a)	Includes billings to original equipment manufacturers and certain multinational organizations because of the nature of these businesses and the impracticability of determining the geographic source of the revenue.

Revenue Classified by Significant Product and Service Offerings

Revenue from external customers, classified by significant product and service offerings, was as follows:

(In millions)


Three Months Ended September 30,	2017		2016

Office products and cloud services	$	6,575	$	5,982
Server products and cloud services		5,496		4,689
Windows		4,643		4,643
Gaming		1,896		1,885
Search advertising		1,639		1,429
Enterprise Services		1,371		1,355
Devices		1,154		1,362
LinkedIn		1,148		0
Other		616		583


Total	$	24,538	$	21,928

Accounting Policies - Additional Information (Detail) - USD ($) $ in Billions	3 Months Ended
	Sep. 30, 2017	Jun. 30, 2017	Jul. 01, 2016
Significant Accounting Policies [Line Items]
Current and long-term accounts receivable, net of allowance for doubtful accounts			$ 22.3
Long-term accounts receivable, net of allowance for doubtful accounts	$ 1.6	$ 1.7
Description of payment terms in contract with customer	Payment terms and conditions vary by contract type, although terms generally include a requirement of payment within 30 to 60 days.

Allowance for Doubtful Accounts (Detail) - Allowance for doubtful accounts $ in Millions	3 Months Ended
	Sep. 30, 2017 USD ($)
Valuation and Qualifying Accounts Disclosure [Line Items]
Balance, beginning of period	$ 361
Charged to costs and other	(45)
Write-offs	(16)
Balance, end of period	300
Accounts receivable, net of allowance for doubtful accounts
Valuation and Qualifying Accounts Disclosure [Line Items]
Balance, end of period	285
Other Long-term Assets
Valuation and Qualifying Accounts Disclosure [Line Items]
Balance, end of period	$ 15

Impacts of Adoption of Standards Related to Revenue Recognition and Leases to Previously Reported Results - (Detail) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Jun. 30, 2017	Jul. 01, 2016
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Revenue	$ 24,538	$ 21,928
Provision for income taxes	1,408	1,160
Net income	$ 6,576	$ 5,667
Diluted earnings per share	$ 0.84	$ 0.72
Balance Sheets
Accounts receivable, net of allowance for doubtful accounts	$ 14,561		$ 22,431
Operating lease right-of-use assets	6,844		6,555
Other current and long-term assets			11,179
Unearned revenue	24,904		26,656	$ 22,200
Deferred income taxes	5,513		5,734
Operating lease liabilities	5,768		5,372
Other current and long-term liabilities			24,621
Stockholders' equity	$ 89,647	$ 82,462	87,711
As Previously Reported
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Revenue		20,453
Provision for income taxes		635
Net income		$ 4,690
Diluted earnings per share		$ 0.60
Balance Sheets
Accounts receivable, net of allowance for doubtful accounts			19,792
Operating lease right-of-use assets			0
Other current and long-term assets			11,147
Unearned revenue			44,479
Deferred income taxes			531
Operating lease liabilities			0
Other current and long-term liabilities			23,464
Stockholders' equity			72,394
New Revenue Standard Adjustment \| Restatement Adjustment
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Revenue		$ 1,475
Provision for income taxes		525
Net income		$ 977
Diluted earnings per share		$ 0.12
Balance Sheets
Accounts receivable, net of allowance for doubtful accounts			2,639
Operating lease right-of-use assets			0
Other current and long-term assets			32
Unearned revenue			(17,823)
Deferred income taxes			5,203
Operating lease liabilities			0
Other current and long-term liabilities			(26)
Stockholders' equity			15,317
New Lease Standard Adjustment \| Restatement Adjustment
Balance Sheets
Accounts receivable, net of allowance for doubtful accounts			0
Operating lease right-of-use assets			6,555
Other current and long-term assets			0
Unearned revenue			0
Deferred income taxes			0
Operating lease liabilities			5,372
Other current and long-term liabilities			1,183
Stockholders' equity			$ 0

Basic and Diluted Earnings Per Share (Detail) - USD ($) $ / shares in Units, shares in Millions, $ in Millions	3 Months Ended
	Sep. 30, 2017	Sep. 30, 2016
Schedule of Earnings Per Share, Basic and Diluted, by Common Class [Line Items]
Net income available for common shareholders (A)	$ 6,576	$ 5,667
Weighted average outstanding shares of common stock (B)	7,708	7,789
Dilutive effect of stock-based awards	91	87
Common stock and common stock equivalents (C)	7,799	7,876
Earnings Per Share
Basic (A/B)	$ 0.85	$ 0.73
Diluted (A/C)	$ 0.84	$ 0.72

Components of Other Income (Expense), Net (Detail) - USD ($) $ in Millions	3 Months Ended
	Sep. 30, 2017	Sep. 30, 2016
Components of Other Income (Expense) [Line Items]
Dividends and interest income	$ 473	$ 293
Interest expense	(672)	(437)
Net recognized gains on investments	573	405
Net losses on derivatives	(50)	(94)
Net losses on foreign currency remeasurements	(9)	(40)
Other, net	(39)	(15)
Total	$ 276	$ 112

- 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
	Sep. 30, 2017	Sep. 30, 2016
Gains (Losses) on Investments [Line Items]
Other-than-temporary impairments of investments	$ (6)	$ (18)
Realized gains from sales of available-for-sale securities	671	483
Realized losses from sales of available-for-sale securities	(92)	(60)
Total	$ 573	$ 405

- Definition

+ References + Details

Investment Components, Including Associated Derivatives (Detail) - USD ($) $ in Millions	Sep. 30, 2017	Jun. 30, 2017	Sep. 30, 2016	Jun. 30, 2016
Cash, Cash Equivalents and Investments [Line Items]
Cost Basis	$ 141,402	$ 136,160
Unrealized Gains	2,790	3,267
Unrealized Losses	(378)	(423)
Recorded Basis	143,814	139,004
Cash and cash equivalents	6,884	7,663	$ 13,928	$ 6,510
Short-term Investments	131,587	125,318
Equity and Other Investments	5,343	6,023
Cash
Cash, Cash Equivalents and Investments [Line Items]
Cash	4,052	3,624
Unrealized Gains	0	0
Unrealized Losses	0	0
Cash and cash equivalents	4,052	3,624
Short-term Investments	0	0
Equity and Other Investments	0	0
Mutual funds
Cash, Cash Equivalents and Investments [Line Items]
Cost Basis	1,040	1,478
Unrealized Gains	0	0
Unrealized Losses	0	0
Recorded Basis	1,040	1,478
Cash and cash equivalents	1,040	1,478
Short-term Investments	0	0
Equity and Other Investments	0	0
Commercial paper
Cash, Cash Equivalents and Investments [Line Items]
Cost Basis	833	319
Unrealized Gains	0	0
Unrealized Losses	0	0
Recorded Basis	833	319
Cash and cash equivalents	384	69
Short-term Investments	449	250
Equity and Other Investments	0	0
Certificates of deposit
Cash, Cash Equivalents and Investments [Line Items]
Cost Basis	1,430	1,358
Unrealized Gains	0	0
Unrealized Losses	0	0
Recorded Basis	1,430	1,358
Cash and cash equivalents	1,252	972
Short-term Investments	178	386
Equity and Other Investments	0	0
U.S. government and agency securities
Cash, Cash Equivalents and Investments [Line Items]
Cost Basis	117,222	112,119
Unrealized Gains	66	85
Unrealized Losses	(344)	(360)
Recorded Basis	116,944	111,844
Cash and cash equivalents	155	16
Short-term Investments	116,789	111,828
Equity and Other Investments	0	0
Foreign government bonds
Cash, Cash Equivalents and Investments [Line Items]
Cost Basis	5,150	5,276
Unrealized Gains	2	2
Unrealized Losses	(12)	(13)
Recorded Basis	5,140	5,265
Cash and cash equivalents	1	1,504
Short-term Investments	5,139	3,761
Equity and Other Investments	0	0
Mortgage- and asset-backed securities
Cash, Cash Equivalents and Investments [Line Items]
Cost Basis	3,771	3,921
Unrealized Gains	10	14
Unrealized Losses	(4)	(4)
Recorded Basis	3,777	3,931
Cash and cash equivalents	0	0
Short-term Investments	3,777	3,931
Equity and Other Investments	0	0
Corporate notes and bonds
Cash, Cash Equivalents and Investments [Line Items]
Cost Basis	4,872	4,786
Unrealized Gains	62	61
Unrealized Losses	(9)	(12)
Recorded Basis	4,925	4,835
Cash and cash equivalents	0	0
Short-term Investments	4,925	4,835
Equity and Other Investments	0	0
Municipal securities
Cash, Cash Equivalents and Investments [Line Items]
Cost Basis	284	284
Unrealized Gains	46	43
Unrealized Losses	0	0
Recorded Basis	330	327
Cash and cash equivalents	0	0
Short-term Investments	330	327
Equity and Other Investments	0	0
Common and preferred stock
Cash, Cash Equivalents and Investments [Line Items]
Cost Basis	2,220	2,472
Unrealized Gains	2,604	3,062
Unrealized Losses	(9)	(34)
Recorded Basis	4,815	5,500
Cash and cash equivalents	0	0
Short-term Investments	0	0
Equity and Other Investments	4,815	5,500
Other investments
Cash, Cash Equivalents and Investments [Line Items]
Cost Basis	528	523
Unrealized Gains	0	0
Unrealized Losses	0	0
Recorded Basis	528	523
Cash and cash equivalents	0	0
Short-term Investments	0	0
Equity and Other Investments	$ 528	$ 523

Investments - Cost Method - Additional Information (Detail) - USD ($) $ in Millions	Sep. 30, 2017	Jun. 30, 2017
Fair Value, Measurements, Nonrecurring
Schedule of Cost-method Investments [Line Items]
Recorded basis of common and preferred stock that are restricted for more than one year or are not publicly traded	$ 1,020	$ 1,073

Investments - Secured Borrowings and Loaned Securities - Additional Information (Detail) - USD ($) $ in Billions	Sep. 30, 2017	Jun. 30, 2017
U.S. Government and Agency Securities
Investment [Line Items]
Collateral received	$ 4.9	$ 3.7

Unrealized Losses on Investments (Detail) - USD ($) $ in Millions	Sep. 30, 2017	Jun. 30, 2017
Unrealized Losses on Investments [Line Items]
Less than 12 Months - Fair Value	$ 104,462	$ 93,370
Less than 12 Months - Unrealized Losses	(297)	(367)
12 Months or Greater - Fair Value	5,559	917
12 Months or Greater - Unrealized Losses	(81)	(56)
Total Fair Value	110,021	94,287
Total Unrealized Losses	(378)	(423)
U.S. government and agency securities
Unrealized Losses on Investments [Line Items]
Less than 12 Months - Fair Value	98,245	87,558
Less than 12 Months - Unrealized Losses	(290)	(348)
12 Months or Greater - Fair Value	4,957	371
12 Months or Greater - Unrealized Losses	(54)	(12)
Total Fair Value	103,202	87,929
Total Unrealized Losses	(344)	(360)
Foreign government bonds
Unrealized Losses on Investments [Line Items]
Less than 12 Months - Fair Value	4,972	4,006
Less than 12 Months - Unrealized Losses	(1)	(2)
12 Months or Greater - Fair Value	24	23
12 Months or Greater - Unrealized Losses	(11)	(11)
Total Fair Value	4,996	4,029
Total Unrealized Losses	(12)	(13)
Mortgage- and asset-backed securities
Unrealized Losses on Investments [Line Items]
Less than 12 Months - Fair Value	713	1,068
Less than 12 Months - Unrealized Losses	(2)	(3)
12 Months or Greater - Fair Value	236	198
12 Months or Greater - Unrealized Losses	(2)	(1)
Total Fair Value	949	1,266
Total Unrealized Losses	(4)	(4)
Corporate notes and bonds
Unrealized Losses on Investments [Line Items]
Less than 12 Months - Fair Value	502	669
Less than 12 Months - Unrealized Losses	(4)	(8)
12 Months or Greater - Fair Value	283	177
12 Months or Greater - Unrealized Losses	(5)	(4)
Total Fair Value	785	846
Total Unrealized Losses	(9)	(12)
Common and preferred stock
Unrealized Losses on Investments [Line Items]
Less than 12 Months - Fair Value	30	69
Less than 12 Months - Unrealized Losses	0	(6)
12 Months or Greater - Fair Value	59	148
12 Months or Greater - Unrealized Losses	(9)	(28)
Total Fair Value	89	217
Total Unrealized Losses	$ (9)	$ (34)

Debt Investment Maturities (Detail) $ in Millions	Sep. 30, 2017 USD ($)
Cost Basis
Due in one year or less	$ 22,611
Due after one year through five years	101,909
Due after five years through 10 years	8,121
Due after 10 years	921
Total	133,562
Estimated Fair Value
Due in one year or less	22,558
Due after one year through five years	101,734
Due after five years through 10 years	8,145
Due after 10 years	942
Total	$ 133,379

Derivatives - Additional Information (Detail) - USD ($)	3 Months Ended
Derivatives - Additional Information (Detail) - USD ($)	Sep. 30, 2017	Jun. 30, 2017
Derivative [Line Items]
Maximum length of time hedged in cash flow hedge	3 years
Minimum required liquidity under certain counterparty agreements	$ 1,000,000,000
Minimum liquidity for the period as defined by certain counterparty agreements	1,000,000,000
Estimated derivative net gains (losses) included in AOCI that will be reclassified into earnings within 12 months	$ 29,000,000
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	$ 8,200,000,000	$ 10,600,000,000
Derivatives Sold \| Equity Contracts
Derivative [Line Items]
Notional amounts	2,600,000,000	2,400,000,000
Derivatives Sold \| Equity Contracts \| Designated Hedge Derivatives
Derivative [Line Items]
Notional amounts	1,800,000,000	1,800,000,000
Derivatives Sold \| Interest Rate Contracts \| Non-designated Hedge Derivatives
Derivative [Line Items]
Notional amounts	364,000,000	352,000,000
Derivatives Sold \| Credit Contracts \| Non-designated Hedge Derivatives
Derivative [Line Items]
Notional amounts	49,000,000	63,000,000
Derivatives Sold \| Cash flow hedging \| Foreign Exchange Contracts
Derivative [Line Items]
Notional amounts	8,900,000,000	8,900,000,000
Derivatives Sold \| Fair value hedging \| Foreign Exchange Contracts
Derivative [Line Items]
Notional amounts	5,000,000,000	5,100,000,000
Derivatives Purchased \| Foreign Exchange Contracts \| Non-designated Hedge Derivatives
Derivative [Line Items]
Notional amounts	11,000,000,000	8,800,000,000
Derivatives Purchased \| Equity Contracts
Derivative [Line Items]
Notional amounts	1,600,000,000	1,900,000,000
Derivatives Purchased \| Equity Contracts \| Designated Hedge Derivatives
Derivative [Line Items]
Notional amounts	1,600,000,000	1,600,000,000
Derivatives Purchased \| Interest Rate Contracts \| Non-designated Hedge Derivatives
Derivative [Line Items]
Notional amounts	528,000,000	233,000,000
Derivatives Purchased \| Mortgage-backed securities \| Non-designated Hedge Derivatives
Derivative [Line Items]
Notional amounts	553,000,000	567,000,000
Derivatives Purchased \| Credit Contracts \| Non-designated Hedge Derivatives
Derivative [Line Items]
Notional amounts	$ 252,000,000	$ 267,000,000

Fair Values of Derivative Instruments (Detail) - USD ($) $ in Millions	Sep. 30, 2017	Jun. 30, 2017
Short-term Investments
Derivatives, Fair Value [Line Items]
Derivative Assets	$ 104	$ 100
Net amount, assets	86	80
Short-term Investments \| Eligible for Offsetting
Derivatives, Fair Value [Line Items]
Derivative Assets	104	100
Gross amounts of derivatives offset on the balance sheet, assets	(18)	(20)
Net amounts presented on the balance sheet, assets	86	80
Gross amounts of derivatives not offset on the balance sheet, assets	0	0
Cash collateral received, assets	0	0
Short-term Investments \| Non-designated Hedge Derivatives
Derivatives, Fair Value [Line Items]
Derivative Assets	23	20
Short-term Investments \| Non-designated Hedge Derivatives \| Foreign Exchange Contracts
Derivatives, Fair Value [Line Items]
Derivative Assets	10	9
Short-term Investments \| Non-designated Hedge Derivatives \| Equity Contracts
Derivatives, Fair Value [Line Items]
Derivative Assets	5	3
Short-term Investments \| Non-designated Hedge Derivatives \| Interest Rate Contracts
Derivatives, Fair Value [Line Items]
Derivative Assets	4	3
Short-term Investments \| Non-designated Hedge Derivatives \| Credit Contracts
Derivatives, Fair Value [Line Items]
Derivative Assets	4	5
Short-term Investments \| Designated Hedge Derivatives
Derivatives, Fair Value [Line Items]
Derivative Assets	81	80
Short-term Investments \| Designated Hedge Derivatives \| Foreign Exchange Contracts
Derivatives, Fair Value [Line Items]
Derivative Assets	81	80
Short-term Investments \| Designated Hedge Derivatives \| Equity Contracts
Derivatives, Fair Value [Line Items]
Derivative Assets	0	0
Other Current Assets
Derivatives, Fair Value [Line Items]
Derivative Assets	182	336
Net amount, assets	90	204
Other Current Assets \| Eligible for Offsetting
Derivatives, Fair Value [Line Items]
Derivative Assets	182	336
Gross amounts of derivatives offset on the balance sheet, assets	(92)	(132)
Net amounts presented on the balance sheet, assets	90	204
Gross amounts of derivatives not offset on the balance sheet, assets	0	0
Cash collateral received, assets	0	0
Other Current Assets \| Non-designated Hedge Derivatives
Derivatives, Fair Value [Line Items]
Derivative Assets	93	203
Other Current Assets \| Non-designated Hedge Derivatives \| Foreign Exchange Contracts
Derivatives, Fair Value [Line Items]
Derivative Assets	93	203
Other Current Assets \| Non-designated Hedge Derivatives \| Equity Contracts
Derivatives, Fair Value [Line Items]
Derivative Assets	0	0
Other Current Assets \| Non-designated Hedge Derivatives \| Interest Rate Contracts
Derivatives, Fair Value [Line Items]
Derivative Assets	0	0
Other Current Assets \| Non-designated Hedge Derivatives \| Credit Contracts
Derivatives, Fair Value [Line Items]
Derivative Assets	0	0
Other Current Assets \| Designated Hedge Derivatives
Derivatives, Fair Value [Line Items]
Derivative Assets	89	133
Other Current Assets \| Designated Hedge Derivatives \| Foreign Exchange Contracts
Derivatives, Fair Value [Line Items]
Derivative Assets	89	133
Other Current Assets \| Designated Hedge Derivatives \| Equity Contracts
Derivatives, Fair Value [Line Items]
Derivative Assets	0	0
Equity and Other Investments
Derivatives, Fair Value [Line Items]
Derivative Assets	23	67
Net amount, assets	0	0
Equity and Other Investments \| Eligible for Offsetting
Derivatives, Fair Value [Line Items]
Derivative Assets	23	67
Gross amounts of derivatives offset on the balance sheet, assets	(23)	(67)
Net amounts presented on the balance sheet, assets	0	0
Gross amounts of derivatives not offset on the balance sheet, assets	0	0
Cash collateral received, assets	0	0
Equity and Other Investments \| Non-designated Hedge Derivatives
Derivatives, Fair Value [Line Items]
Derivative Assets	0	0
Equity and Other Investments \| Non-designated Hedge Derivatives \| Foreign Exchange Contracts
Derivatives, Fair Value [Line Items]
Derivative Assets	0	0
Equity and Other Investments \| Non-designated Hedge Derivatives \| Equity Contracts
Derivatives, Fair Value [Line Items]
Derivative Assets	0	0
Equity and Other Investments \| Non-designated Hedge Derivatives \| Interest Rate Contracts
Derivatives, Fair Value [Line Items]
Derivative Assets	0	0
Equity and Other Investments \| Non-designated Hedge Derivatives \| Credit Contracts
Derivatives, Fair Value [Line Items]
Derivative Assets	0	0
Equity and Other Investments \| Designated Hedge Derivatives
Derivatives, Fair Value [Line Items]
Derivative Assets	23	67
Equity and Other Investments \| Designated Hedge Derivatives \| Foreign Exchange Contracts
Derivatives, Fair Value [Line Items]
Derivative Assets	0	0
Equity and Other Investments \| Designated Hedge Derivatives \| Equity Contracts
Derivatives, Fair Value [Line Items]
Derivative Assets	23	67
Other Long-term Assets
Derivatives, Fair Value [Line Items]
Derivative Assets	20	6
Net amount, assets	13	(2)
Other Long-term Assets \| Eligible for Offsetting
Derivatives, Fair Value [Line Items]
Derivative Assets	20	6
Gross amounts of derivatives offset on the balance sheet, assets	(7)	(8)
Net amounts presented on the balance sheet, assets	13	(2)
Gross amounts of derivatives not offset on the balance sheet, assets	0	0
Cash collateral received, assets	0	0
Other Long-term Assets \| Non-designated Hedge Derivatives
Derivatives, Fair Value [Line Items]
Derivative Assets	14	6
Other Long-term Assets \| Non-designated Hedge Derivatives \| Foreign Exchange Contracts
Derivatives, Fair Value [Line Items]
Derivative Assets	14	6
Other Long-term Assets \| Non-designated Hedge Derivatives \| Equity Contracts
Derivatives, Fair Value [Line Items]
Derivative Assets	0	0
Other Long-term Assets \| Non-designated Hedge Derivatives \| Interest Rate Contracts
Derivatives, Fair Value [Line Items]
Derivative Assets	0	0
Other Long-term Assets \| Non-designated Hedge Derivatives \| Credit Contracts
Derivatives, Fair Value [Line Items]
Derivative Assets	0	0
Other Long-term Assets \| Designated Hedge Derivatives
Derivatives, Fair Value [Line Items]
Derivative Assets	6	0
Other Long-term Assets \| Designated Hedge Derivatives \| Foreign Exchange Contracts
Derivatives, Fair Value [Line Items]
Derivative Assets	6	0
Other Long-term Assets \| Designated Hedge Derivatives \| Equity Contracts
Derivatives, Fair Value [Line Items]
Derivative Assets	0	0
Other Current Liabilities
Derivatives, Fair Value [Line Items]
Derivative Liabilities	(448)	(337)
Net amount, liabilities	(445)	(341)
Other Current Liabilities \| Eligible for Offsetting
Derivatives, Fair Value [Line Items]
Derivative Liabilities	(444)	(334)
Gross amounts of derivatives offset on the balance sheet, liabilities	133	221
Net amounts presented on the balance sheet, liabilities	(311)	(113)
Gross amounts of derivatives not offset on the balance sheet, liabilities	0	0
Cash collateral received, liabilities	(134)	(228)
Other Current Liabilities \| Non-designated Hedge Derivatives
Derivatives, Fair Value [Line Items]
Derivative Liabilities	(108)	(148)
Other Current Liabilities \| Non-designated Hedge Derivatives \| Foreign Exchange Contracts
Derivatives, Fair Value [Line Items]
Derivative Liabilities	(83)	(134)
Other Current Liabilities \| Non-designated Hedge Derivatives \| Equity Contracts
Derivatives, Fair Value [Line Items]
Derivative Liabilities	(16)	(6)
Other Current Liabilities \| Non-designated Hedge Derivatives \| Interest Rate Contracts
Derivatives, Fair Value [Line Items]
Derivative Liabilities	(8)	(7)
Other Current Liabilities \| Non-designated Hedge Derivatives \| Credit Contracts
Derivatives, Fair Value [Line Items]
Derivative Liabilities	(1)	(1)
Other Current Liabilities \| Designated Hedge Derivatives
Derivatives, Fair Value [Line Items]
Derivative Liabilities	(340)	(189)
Other Current Liabilities \| Designated Hedge Derivatives \| Foreign Exchange Contracts
Derivatives, Fair Value [Line Items]
Derivative Liabilities	(3)	(3)
Other Current Liabilities \| Designated Hedge Derivatives \| Equity Contracts
Derivatives, Fair Value [Line Items]
Derivative Liabilities	(337)	(186)
Other Long-term Liabilities
Derivatives, Fair Value [Line Items]
Derivative Liabilities	(7)	(8)
Net amount, liabilities	0	(1)
Other Long-term Liabilities \| Eligible for Offsetting
Derivatives, Fair Value [Line Items]
Derivative Liabilities	(7)	(8)
Gross amounts of derivatives offset on the balance sheet, liabilities	7	7
Net amounts presented on the balance sheet, liabilities	0	(1)
Gross amounts of derivatives not offset on the balance sheet, liabilities	0	0
Cash collateral received, liabilities	0	0
Other Long-term Liabilities \| Non-designated Hedge Derivatives
Derivatives, Fair Value [Line Items]
Derivative Liabilities	(7)	(8)
Other Long-term Liabilities \| Non-designated Hedge Derivatives \| Foreign Exchange Contracts
Derivatives, Fair Value [Line Items]
Derivative Liabilities	(7)	(8)
Other Long-term Liabilities \| Non-designated Hedge Derivatives \| Equity Contracts
Derivatives, Fair Value [Line Items]
Derivative Liabilities	0	0
Other Long-term Liabilities \| Non-designated Hedge Derivatives \| Interest Rate Contracts
Derivatives, Fair Value [Line Items]
Derivative Liabilities	0	0
Other Long-term Liabilities \| Non-designated Hedge Derivatives \| Credit Contracts
Derivatives, Fair Value [Line Items]
Derivative Liabilities	0	0
Other Long-term Liabilities \| Designated Hedge Derivatives
Derivatives, Fair Value [Line Items]
Derivative Liabilities	0	0
Other Long-term Liabilities \| Designated Hedge Derivatives \| Foreign Exchange Contracts
Derivatives, Fair Value [Line Items]
Derivative Liabilities	0	0
Other Long-term Liabilities \| Designated Hedge Derivatives \| Equity Contracts
Derivatives, Fair Value [Line Items]
Derivative Liabilities	$ 0	$ 0

Gains (Losses) on Fair Value Hedges and Related Hedged Items (Detail) - USD ($) $ in Millions	3 Months Ended
	Sep. 30, 2017	Sep. 30, 2016
Foreign Exchange Contracts
Derivative Instruments, Gain (Loss) [Line Items]
Derivatives	$ 22	$ (48)
Hedged items	(2)	68
Total amount of ineffectiveness	20	20
Equity Contracts
Derivative Instruments, Gain (Loss) [Line Items]
Derivatives	(236)	(10)
Hedged items	236	10
Total amount of ineffectiveness	0	0
Amount of equity contracts excluded from effectiveness assessment	$ 40	$ (3)

Gains (Losses) Related to Cash Flow Hedges (Detail) - USD ($) $ in Millions	3 Months Ended
	Sep. 30, 2017	Sep. 30, 2016
Effective Portion
Gains recognized in other comprehensive income (net of tax of $0 and $1)	$ 5	$ 35
Designated Hedge Derivatives \| Foreign Exchange Contracts
Effective Portion
Gains reclassified from accumulated other comprehensive income into revenue	111	75
Amount Excluded from Effectiveness Assessment and Ineffective Portion
Losses recognized in other income (expense), net	$ (91)	$ (70)

Gains (Losses) Related to Cash Flow Hedges (Parenthetical) (Detail) - USD ($) $ in Millions	3 Months Ended
	Sep. 30, 2017	Sep. 30, 2016
Designated Hedge Derivatives \| Foreign Exchange Contracts
Derivative Instruments, Gain (Loss) [Line Items]
Gains recognized in other comprehensive income, tax	$ 0	$ 1

Non-Designated Derivative Gains (Losses) (Detail) - USD ($) $ in Millions	3 Months Ended
	Sep. 30, 2017	Sep. 30, 2016
Derivative Instruments, Gain (Loss) [Line Items]
Changes in fair value of derivatives not designated as hedges	$ (87)	$ (64)
Foreign Exchange Contracts
Derivative Instruments, Gain (Loss) [Line Items]
Changes in fair value of derivatives not designated as hedges	(69)	(31)
Equity Contracts
Derivative Instruments, Gain (Loss) [Line Items]
Changes in fair value of derivatives not designated as hedges	(29)	(17)
Interest Rate Contracts
Derivative Instruments, Gain (Loss) [Line Items]
Changes in fair value of derivatives not designated as hedges	11	4
Credit Contracts
Derivative Instruments, Gain (Loss) [Line Items]
Changes in fair value of derivatives not designated as hedges	0	2
Other Contracts
Derivative Instruments, Gain (Loss) [Line Items]
Changes in fair value of derivatives not designated as hedges	$ 0	$ (22)

Reconciliation of Total Assets Measured at Fair Value on Recurring Basis to Balance Sheet Presentation (Detail) - USD ($) $ in Millions	Sep. 30, 2017	Jun. 30, 2017
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Net fair value of assets measured at fair value on a recurring basis	$ 138,314	$ 133,985
Other	3	1
Recorded basis of investment components	143,814	139,004
Other Current and Long-term Assets
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Less derivative net assets classified as other current and long-term assets	(103)	(202)
Fair Value, Measurements, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash	4,052	3,624
Fair Value, Measurements, Nonrecurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Common and preferred stock measured at fair value on a nonrecurring basis	1,020	1,073
Other investments measured at fair value on a nonrecurring basis	$ 528	$ 523

Components of Inventories (Detail) - USD ($) $ in Millions	Sep. 30, 2017	Jun. 30, 2017
Inventory [Line Items]
Raw materials	$ 766	$ 797
Work in process	112	145
Finished goods	2,333	1,239
Total	$ 3,211	$ 2,181

Business Combinations - Additional Information (Detail) - LinkedIn Corporation - USD ($) $ in Billions		3 Months Ended
	Dec. 08, 2016	Sep. 30, 2017
Business Acquisition [Line Items]
Acquisition date	Dec. 08, 2016
Name of acquired entity		LinkedIn
Total purchase price	$ 27.0
Cash paid to acquire the business	$ 26.9

Carrying Amount of Goodwill (Detail) $ in Millions	3 Months Ended
Carrying Amount of Goodwill (Detail) $ in Millions	Sep. 30, 2017 USD ($)
Goodwill [Line Items]
Beginning Balance	$ 35,122
Acquisitions	125
Other	142
Ending Balance	35,389
Productivity and Business Processes
Goodwill [Line Items]
Beginning Balance	23,739
Acquisitions	0
Other	51
Ending Balance	23,790
Intelligent Cloud
Goodwill [Line Items]
Beginning Balance	5,555
Acquisitions	68
Other	(2)
Ending Balance	5,621
More Personal Computing
Goodwill [Line Items]
Beginning Balance	5,828
Acquisitions	57
Other	93
Ending Balance	$ 5,978

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

Sep. 30, 2017

Jun. 30, 2017

Finite-Lived Intangible Assets [Line Items]

Gross Carrying Amount

$ 16,741

$ 16,667

Accumulated Amortization

(7,143)

(6,561)

Net Carrying Amount

9,598

10,106

Technology-based

Finite-Lived Intangible Assets [Line Items]

Gross Carrying Amount

^[1]

7,833

7,765

Accumulated Amortization

^[1]

(4,686)

(4,318)

Net Carrying Amount

^[1]

3,147

3,447

Marketing-related

Finite-Lived Intangible Assets [Line Items]

Gross Carrying Amount

4,040

4,016

Accumulated Amortization

(902)

(829)

Net Carrying Amount

3,138

3,187

Contract-based

Finite-Lived Intangible Assets [Line Items]

Gross Carrying Amount

819

841

Accumulated Amortization

(725)

(722)

Net Carrying Amount

119

Customer-related

Finite-Lived Intangible Assets [Line Items]

Gross Carrying Amount

4,049

4,045

Accumulated Amortization

(830)

(692)

Net Carrying Amount

$ 3,219

$ 3,353

[1]	Technology-based intangible assets included $46 million and $59 million of net carrying amount of software to be sold, leased, or otherwise marketed as of September 30, 2017 and June 30, 2017, respectively.

Finite-Lived Intangible Assets (Parenthetical) (Detail) - USD ($) $ in Millions	Sep. 30, 2017	Jun. 30, 2017
Technology-based
Finite-Lived Intangible Assets [Line Items]
Net carrying amount of software to be sold, leased, or otherwise marketed	$ 46	$ 59

Intangible Assets - Additional Information (Detail) - USD ($) $ in Millions	3 Months Ended
	Sep. 30, 2017	Sep. 30, 2016
Finite-Lived Intangible Assets [Line Items]
Intangible assets amortization expense	$ 563	$ 214

Estimated Future Amortization Expense Related to Intangible Assets (Detail) - USD ($) $ in Millions	Sep. 30, 2017	Jun. 30, 2017
Finite-Lived Intangible Assets [Line Items]
Year Ending June 30, 2018 (excluding the three months ended September 30, 2017)	$ 1,661
Year Ending June 30, 2019	1,701
Year Ending June 30, 2020	1,193
Year Ending June 30, 2021	1,006
Year Ending June 30, 2022	934
Thereafter	3,103
Net Carrying Amount	$ 9,598	$ 10,106

Debt - Additional Information (Detail) - USD ($)	3 Months Ended	12 Months Ended
Debt - Additional Information (Detail) - USD ($)	Sep. 30, 2017	Jun. 30, 2017	Oct. 31, 2017
Debt Instrument [Line Items]
Commercial paper	$ 8,200,000,000	$ 9,100,000,000
Credit facility, financial covenant	As of September 30, 2017, 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	77,300,000,000	77,100,000,000
Long-term debt fair value	81,300,000,000	80,300,000,000
Debt issuance costs and unamortized discount	702,000,000	$ 715,000,000
Credit Facility Expire on October 31st 2017
Debt Instrument [Line Items]
Credit facility	$ 5,000,000,000
Credit facility, expiration date	Oct. 31, 2017
Credit Facility Expire on November 14th 2018
Debt Instrument [Line Items]
Credit facility	$ 5,000,000,000
Credit facility, expiration date	Nov. 14, 2018
New Credit Facility One Effective from October 2017 \| Scenario, Plan
Debt Instrument [Line Items]
Credit facility			$ 5,000,000,000
New Credit Facility Two Effective from October 2017 \| Scenario, Plan
Debt Instrument [Line Items]
Credit facility			$ 5,000,000,000
Commercial paper
Debt Instrument [Line Items]
Commercial paper, weighted average interest rate	1.20%	1.01%
Commercial paper \| Lower Limit
Debt Instrument [Line Items]
Commercial paper, maturity term	34 days	25 days
Commercial paper \| Upper Limit
Debt Instrument [Line Items]
Commercial paper, maturity term	196 days	264 days

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

3 Months Ended

12 Months Ended

Sep. 30, 2017

Jun. 30, 2017

Income Taxes - Additional Information Regarding Examinations (Detail)	3 Months Ended
	Sep. 30, 2017	Sep. 30, 2015	Mar. 31, 2011
Earliest Tax Year \| Foreign Country
Income Tax Examination [Line Items]
Tax years subject to examination	1996
Latest Tax Year \| Foreign Country
Income Tax Examination [Line Items]
Tax years subject to examination	2017
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) - USD ($) $ in Millions	3 Months Ended	12 Months Ended
	Sep. 30, 2017	Jun. 30, 2017
Restructuring Cost and Reserve [Line Items]
Restructuring charges	$ 0
2017 Restructuring Plan
Restructuring Cost and Reserve [Line Items]
Completion date	Jun. 30, 2018
Severance
Restructuring Cost and Reserve [Line Items]
Restructuring charges	$ 0
Severance \| 2017 Restructuring Plan
Restructuring Cost and Reserve [Line Items]
Restructuring charges		$ 306

Unearned Revenue by Segment (Detail) - USD ($) $ in Millions	Sep. 30, 2017	Jun. 30, 2017	Jul. 01, 2016
Deferred Revenue Arrangement [Line Items]
Unearned revenue	$ 24,904	$ 26,656	$ 22,200
Productivity and Business Processes
Deferred Revenue Arrangement [Line Items]
Unearned revenue	11,808	12,692
Intelligent Cloud
Deferred Revenue Arrangement [Line Items]
Unearned revenue	10,156	11,152
More Personal Computing
Deferred Revenue Arrangement [Line Items]
Unearned revenue	$ 2,940	$ 2,812

Changes in Unearned Revenue (Detail) $ in Millions	3 Months Ended
Changes in Unearned Revenue (Detail) $ in Millions	Sep. 30, 2017 USD ($)
Deferred Revenue Arrangement [Line Items]
Balance, beginning of period	$ 26,656
Deferral of revenue	10,988
Recognition of unearned revenue	(12,740)
Balance, end of period	$ 24,904

Leases - Additional Information (Detail) - USD ($) $ in Millions	3 Months Ended
	Sep. 30, 2017	Jun. 30, 2017
Leases [Line Items]
Assets recorded under finance leases	$ 3,400	$ 2,700
Accumulated depreciation associated with finance leases	209	$ 161
Operating Lease
Leases [Line Items]
Additional leases, primarily for datacenters, that have not yet commenced	219
Finance Lease
Leases [Line Items]
Additional leases, primarily for datacenters, that have not yet commenced	$ 2,300
Lower Limit
Leases [Line Items]
Operating and Finance leases, remaining lease terms	1 year
Additional operating leases that have not yet commenced, lease terms	1 year
Additional finance leases that have not yet commenced, lease terms	1 year
Upper Limit
Leases [Line Items]
Operating and Finance leases, remaining lease terms	20 years
Operating leases, options to extend leases term	5 years
Finance leases, options to extend leases term	5 years
Operating and Finance leases, options to terminate leases term	1 year
Additional operating leases that have not yet commenced, lease terms	20 years
Additional finance leases that have not yet commenced, lease terms	20 years

Other Information Related to Leases (Detail) - USD ($) $ in Millions	3 Months Ended
	Sep. 30, 2017	Sep. 30, 2016
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$ 369	$ 267
Operating cash flows from finance leases	30	12
Financing cash flows from finance leases	25	6
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	391	55
Finance leases	$ 728	$ 267
Weighted Average Remaining Lease Term
Operating leases	7 years	5 years
Finance leases	14 years	12 years
Weighted Average Discount Rate
Operating leases	2.50%	2.30%
Finance leases	4.70%	5.10%

Future Minimum Lease Payments under Non-cancellable Leases (Detail) $ in Millions	Sep. 30, 2017 USD ($)
Leases [Line Items]
Operating Leases, Year Ending June 30, 2018 (excluding the three months ended September 30, 2017)	$ 1,110
Operating Leases, Year Ending June 30, 2019	1,385
Operating Leases, Year Ending June 30, 2020	1,267
Operating Leases, Year Ending June 30, 2021	1,022
Operating Leases, Year Ending June 30, 2022	833
Operating Leases, Thereafter	2,333
Operating Leases, Total future minimum lease payments	7,950
Operating Leases, Less imputed interest	(930)
Operating Leases	7,020
Finance Leases, Year Ending June 30, 2018 (excluding the three months ended September 30, 2017)	205
Finance Leases, Year Ending June 30, 2019	281
Finance Leases, Year Ending June 30, 2020	287
Finance Leases, Year Ending June 30, 2021	293
Finance Leases, Year Ending June 30, 2022	299
Finance Leases, Thereafter	3,133
Finance Leases, Total future minimum lease payments	4,498
Finance Leases, Less imputed interest	(1,225)
Finance Leases	3,273
Other Current Liabilities
Leases [Line Items]
Operating Leases	1,252
Finance Leases	146
Operating Lease Liabilities
Leases [Line Items]
Operating Leases	5,768
Finance Leases	0
Other Long-term Liabilities
Leases [Line Items]
Operating Leases	0
Finance Leases	$ 3,127

Contingencies - Additional Information (Detail) $ in Millions	Sep. 30, 2017 USD ($)
Loss Contingencies [Line Items]
Accrual for disclosed loss contingencies, current, ending balance	$ 371
Amount not accrued for estimated maximum losses for disclosed loss contingencies	$ 1,100

Stockholders' Equity - Additional Information (Detail) - USD ($)	Sep. 30, 2017	Sep. 20, 2016	Sep. 16, 2013
Share Repurchase Program 2013
Share Repurchases [Line Items]
Amount available for repurchase under the share repurchase program approved by the company's Board of Directors			$ 40,000,000,000
Share Repurchase Program 2016
Share Repurchases [Line Items]
Amount available for repurchase under the share repurchase program approved by the company's Board of Directors		$ 40,000,000,000
Unused amount of share repurchase program	$ 35,200,000,000

Dividends Declared (Detail) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended
	Sep. 30, 2017	Sep. 30, 2016
Dividends [Line Items]
Declaration Date	Sep. 19, 2017	Sep. 20, 2016
Dividend Per Share	$ 0.42	$ 0.39
Record Date	Nov. 16, 2017	Nov. 17, 2016
Total Amount	$ 3,242	$ 3,024
Payment Date	Dec. 14, 2017	Dec. 08, 2016

Segment Revenue (Detail) - USD ($) $ in Millions	3 Months Ended
Segment Revenue (Detail) - USD ($) $ in Millions	Sep. 30, 2017	Sep. 30, 2016
Segment Reporting Information [Line Items]
Revenue	$ 24,538	$ 21,928
Productivity and Business Processes
Segment Reporting Information [Line Items]
Revenue	8,238	6,436
Intelligent Cloud
Segment Reporting Information [Line Items]
Revenue	6,922	6,097
More Personal Computing
Segment Reporting Information [Line Items]
Revenue	$ 9,378	$ 9,395

Segment Information and Geographic Data - Additional Information (Detail)	3 Months Ended
	Sep. 30, 2017
Segment Reporting Information [Line Items]
Sales to an individual customer	No sales to an individual customer or country other than the United States accounted for more than 10% of revenue for the three months ended September 30, 2017 or 2016.

Revenue Classified by Significant Product and Service Offerings (Detail) - USD ($) $ in Millions	3 Months Ended
	Sep. 30, 2017	Sep. 30, 2016
Revenue from External Customer [Line Items]
Revenue	$ 24,538	$ 21,928
Office Products and Cloud Services
Revenue from External Customer [Line Items]
Revenue	6,575	5,982
Server Products and Cloud Services
Revenue from External Customer [Line Items]
Revenue	5,496	4,689
Windows
Revenue from External Customer [Line Items]
Revenue	4,643	4,643
Gaming
Revenue from External Customer [Line Items]
Revenue	1,896	1,885
Search Advertising
Revenue from External Customer [Line Items]
Revenue	1,639	1,429
Enterprise Services
Revenue from External Customer [Line Items]
Revenue	1,371	1,355
Devices
Revenue from External Customer [Line Items]
Revenue	1,154	1,362
LinkedIn
Revenue from External Customer [Line Items]
Revenue	1,148	0
Other products and services
Revenue from External Customer [Line Items]
Revenue	$ 616	$ 583