Document and Entity Information
Document and Entity Information - $ / shares | 3 Months Ended | |
Sep. 30, 2020 | Oct. 22, 2020 | |
Entity Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2020 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q1 | |
Entity Registrant Name | MICROSOFT CORPORATION | |
Entity Central Index Key | 0000789019 | |
Current Fiscal Year End Date | --06-30 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity File Number | 001-37845 | |
Entity Incorporation, State or Country Code | WA | |
Entity Tax Identification Number | 91-1144442 | |
Entity Address, Address Line One | ONE MICROSOFT WAY | |
Entity Address, City or Town | REDMOND | |
Entity Address, State or Province | WA | |
Entity Address, Postal Zip Code | 98052-6399 | |
City Area Code | 425 | |
Local Phone Number | 882-8080 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity Common Stock, Shares Outstanding | 7,560,495,969 | |
Entity Common Stock, Par Value Per Share | $ 0.00000625 | |
Common Stock | ||
Entity Information [Line Items] | ||
Trading Symbol | MSFT | |
Title of 12(b) Security | Common stock, $0.00000625 par value per share | |
Security Exchange Name | NASDAQ | |
2.125% Notes Due 2021 | ||
Entity Information [Line Items] | ||
Trading Symbol | MSFT | |
Title of 12(b) Security | 2.125% Notes due 2021 | |
Security Exchange Name | NASDAQ | |
3.125% Notes Due 2028 | ||
Entity Information [Line Items] | ||
Trading Symbol | MSFT | |
Title of 12(b) Security | 3.125% Notes due 2028 | |
Security Exchange Name | NASDAQ | |
2.625% Notes Due 2033 | ||
Entity Information [Line Items] | ||
Trading Symbol | MSFT | |
Title of 12(b) Security | 2.625% Notes due 2033 | |
Security Exchange Name | NASDAQ |
INCOME STATEMENTS
INCOME STATEMENTS - USD ($) shares in Millions, $ in Millions | 3 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Revenue | $ 37,154 | $ 33,055 |
Cost of revenue | 11,002 | 10,406 |
Gross margin | 26,152 | 22,649 |
Research and development | 4,926 | 4,565 |
Sales and marketing | 4,231 | 4,337 |
General and administrative | 1,119 | 1,061 |
Operating income | 15,876 | 12,686 |
Other income, net | 248 | 0 |
Income before income taxes | 16,124 | 12,686 |
Provision for income taxes | 2,231 | 2,008 |
Net income | $ 13,893 | $ 10,678 |
Earnings per share: | ||
Basic | $ 1.84 | $ 1.40 |
Diluted | $ 1.82 | $ 1.38 |
Weighted average shares outstanding: | ||
Basic | 7,566 | 7,634 |
Diluted | 7,637 | 7,710 |
Product | ||
Revenue | $ 15,803 | $ 15,768 |
Cost of revenue | 3,597 | 3,305 |
Service and Other | ||
Revenue | 21,351 | 17,287 |
Cost of revenue | $ 7,405 | $ 7,101 |
COMPREHENSIVE INCOME STATEMENTS
COMPREHENSIVE INCOME STATEMENTS - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Statement Of Income And Comprehensive Income [Abstract] | ||
Net income | $ 13,893 | $ 10,678 |
Other comprehensive income (loss), net of tax: | ||
Net change related to derivatives | 4 | (2) |
Net change related to investments | (201) | 577 |
Translation adjustments and other | 111 | (296) |
Other comprehensive income (loss) | (86) | 279 |
Comprehensive income | $ 13,807 | $ 10,957 |
BALANCE SHEETS
BALANCE SHEETS - USD ($) $ in Millions | Sep. 30, 2020 | Jun. 30, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 17,205 | $ 13,576 |
Short-term investments | 120,772 | 122,951 |
Total cash, cash equivalents, and short-term investments | 137,977 | 136,527 |
Accounts receivable, net of allowance for doubtful accounts of $610 and $788 | 22,851 | 32,011 |
Inventories | 2,705 | 1,895 |
Other current assets | 13,544 | 11,482 |
Total current assets | 177,077 | 181,915 |
Property and equipment, net of accumulated depreciation of $45,417 and $43,197 | 47,927 | 44,151 |
Operating lease right-of-use assets | 9,047 | 8,753 |
Equity investments | 3,103 | 2,965 |
Goodwill | 43,890 | 43,351 |
Intangible assets, net | 6,923 | 7,038 |
Other long-term assets | 13,034 | 13,138 |
Total assets | 301,001 | 301,311 |
Current liabilities: | ||
Accounts payable | 12,509 | 12,530 |
Current portion of long-term debt | 6,497 | 3,749 |
Accrued compensation | 5,714 | 7,874 |
Short-term income taxes | 2,384 | 2,130 |
Short-term unearned revenue | 33,476 | 36,000 |
Other current liabilities | 9,476 | 10,027 |
Total current liabilities | 70,056 | 72,310 |
Long-term debt | 57,055 | 59,578 |
Long-term income taxes | 28,204 | 29,432 |
Long-term unearned revenue | 2,829 | 3,180 |
Deferred income taxes | 187 | 204 |
Operating lease liabilities | 7,753 | 7,671 |
Other long-term liabilities | 11,525 | 10,632 |
Total liabilities | 177,609 | 183,007 |
Commitments and contingencies | ||
Stockholders’ equity: | ||
Common stock and paid-in capital – shares authorized 24,000; outstanding 7,564 and 7,571 | 81,089 | 80,552 |
Retained earnings | 39,193 | 34,566 |
Accumulated other comprehensive income | 3,110 | 3,186 |
Total stockholders’ equity | 123,392 | 118,304 |
Total liabilities and stockholders’ equity | $ 301,001 | $ 301,311 |
BALANCE SHEETS (Parenthetical)
BALANCE SHEETS (Parenthetical) - USD ($) $ in Millions | Sep. 30, 2020 | Jun. 30, 2020 |
Statement Of Financial Position [Abstract] | ||
Accounts receivable, allowance for doubtful accounts | $ 610 | $ 788 |
Property and equipment, accumulated depreciation | $ 45,417 | $ 43,197 |
Common stock, shares authorized | 24,000,000,000 | 24,000,000,000 |
Common stock, outstanding | 7,564,000,000 | 7,571,000,000 |
CASH FLOWS STATEMENTS
CASH FLOWS STATEMENTS - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Operations | ||
Net income | $ 13,893 | $ 10,678 |
Adjustments to reconcile net income to net cash from operations: | ||
Depreciation, amortization, and other | 2,645 | 2,971 |
Stock-based compensation expense | 1,456 | 1,262 |
Net recognized losses (gains) on investments and derivatives | (128) | 11 |
Deferred income taxes | (11) | (177) |
Changes in operating assets and liabilities: | ||
Accounts receivable | 8,843 | 10,090 |
Inventories | (808) | (561) |
Other current assets | (54) | (438) |
Other long-term assets | (62) | (333) |
Accounts payable | 315 | (547) |
Unearned revenue | (3,064) | (2,892) |
Income taxes | (983) | (3,336) |
Other current liabilities | (2,951) | (3,320) |
Other long-term liabilities | 244 | 410 |
Net cash from operations | 19,335 | 13,818 |
Financing | ||
Repayments of debt | 0 | (2,500) |
Common stock issued | 545 | 427 |
Common stock repurchased | (6,743) | (4,912) |
Common stock cash dividends paid | (3,856) | (3,510) |
Other, net | (235) | 286 |
Net cash used in financing | (10,289) | (10,209) |
Investing | ||
Additions to property and equipment | (4,907) | (3,385) |
Acquisition of companies, net of cash acquired, and purchases of intangible and other assets | (481) | (462) |
Purchases of investments | (14,580) | (23,390) |
Maturities of investments | 14,266 | 19,082 |
Sales of investments | 2,414 | 6,379 |
Other, net | (2,083) | 0 |
Net cash used in investing | (5,371) | (1,776) |
Effect of foreign exchange rates on cash and cash equivalents | (46) | (72) |
Net change in cash and cash equivalents | 3,629 | 1,761 |
Cash and cash equivalents, beginning of period | 13,576 | 11,356 |
Cash and cash equivalents, end of period | $ 17,205 | $ 13,117 |
STOCKHOLDERS' EQUITY STATEMENTS
STOCKHOLDERS' EQUITY STATEMENTS - USD ($) $ in Millions | Total | Common stock and paid-in capital | Retained earnings | Retained earningsCumulative effect of accounting changes | Accumulated other comprehensive income (loss) | Accumulated other comprehensive income (loss)Cumulative effect of accounting changes |
Balance, beginning of period at Jun. 30, 2019 | $ 78,520 | $ 24,150 | $ (340) | |||
Accounting Standards Update [Extensible List] | us-gaap:AccountingStandardsUpdate201601Member | |||||
Common stock issued | 427 | |||||
Net income | $ 10,678 | 10,678 | ||||
Other comprehensive income (loss) | 279 | 279 | ||||
Common stock cash dividends | (3,886) | (3,887) | ||||
Common stock repurchased | (1,326) | (3,701) | ||||
Stock-based compensation expense | 1,262 | |||||
Other, net | (1) | |||||
Balance, end of period at Sep. 30, 2019 | $ 106,061 | 78,882 | 27,240 | $ 0 | (61) | $ 0 |
Cash dividends declared per common share | $ 0.51 | |||||
Balance, beginning of period at Jun. 30, 2020 | $ 118,304 | 80,552 | 34,566 | 3,186 | ||
Accounting Standards Update [Extensible List] | us-gaap:AccountingStandardsUpdate201601Member | |||||
Common stock issued | 815 | |||||
Net income | $ 13,893 | 13,893 | ||||
Other comprehensive income (loss) | (86) | (86) | ||||
Common stock cash dividends | (4,236) | (4,231) | ||||
Common stock repurchased | (1,732) | (5,003) | ||||
Stock-based compensation expense | 1,456 | |||||
Other, net | (2) | |||||
Balance, end of period at Sep. 30, 2020 | $ 123,392 | $ 81,089 | $ 39,193 | $ (32) | $ 3,110 | $ 10 |
Cash dividends declared per common share | $ 0.56 |
ACCOUNTING POLICIES
ACCOUNTING POLICIES | 3 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
ACCOUNTING POLICIES | NOTE 1 — ACCOUNTING POLICIES Accounting Principles Our unaudited interim consolidated financial statements and accompanying notes are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). In the opinion of management, the unaudited interim consolidated financial statements reflect all adjustments of a normal recurring nature that are necessary for a fair presentation of the results for the interim periods presented. Interim results are not necessarily indicative of results for a full year. The information included in this Form 10-Q should be read in conjunction with information included in the Microsoft Corporation fiscal year 2020 Form 10-K filed with the U.S. Securities and Exchange Commission (“SEC”) on July 30, 2020. Principles of Consolidation The consolidated financial statements include the accounts of Microsoft Corporation and its subsidiaries. Intercompany transactions and balances have been eliminated. Estimates and Assumptions Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. Examples of estimates and assumptions include: for revenue recognition, determining the nature and timing of satisfaction of performance obligations, and determining the standalone selling price (“SSP”) of performance obligations, variable consideration, and other obligations such as product returns and refunds; loss contingencies; product warranties; the fair value of and/or potential impairment of goodwill and intangible assets for our reporting units; product life cycles; useful lives of our tangible and intangible assets; allowances for doubtful accounts; the market value of, and demand for, our inventory; stock-based compensation forfeiture rates; when technological feasibility is achieved for our products; the potential outcome of uncertain tax positions that have been recognized in our consolidated financial statements or tax returns; and determining the timing and amount of impairments for investments. Actual results and outcomes may differ from management’s estimates and assumptions due to risks and uncertainties, including uncertainty in the current economic environment due to the recent outbreak of a novel strain of the coronavirus (“COVID-19”). In July 2020, we completed an assessment of the useful lives of our server and network equipment and determined we should increase the estimated useful life of server equipment from three years to four years and increase the estimated useful life of network equipment from two years to four years. This change in accounting estimate was effective beginning fiscal year 2021. Based on the carrying amount of server and network equipment included in property and equipment, net as of June 30, 2020, the effect of this change in estimate for the three months ended September 30, 2020, was an increase in operating income of $927 million and net income of $763 million, or $0.10 Financial Instruments Investments We consider all highly liquid interest-earning investments with a maturity of three months or less at the date of purchase to be cash equivalents. The fair values of these investments approximate their carrying values. In general, investments with original maturities of greater than three months and remaining maturities of less than one year are classified as short-term investments. Investments with maturities beyond one year may be classified as short-term based on their highly liquid nature and because such marketable securities represent the investment of cash that is available for current operations. Debt investments are classified as available-for-sale and realized gains and losses are recorded using the specific identification method. Changes in fair value, excluding credit losses and impairments, are recorded in other comprehensive income . Fair value is calculated based on publicly available market information or other estimates determined by management. If the cost of an investment exceeds its fair value, we evaluate, among other factors, general market conditions, credit quality of debt instrument issuers, and the extent to which the fair value is less than cost. To determine credit losses, we employ a systematic methodology that considers available quantitative and qualitative evidence . In addition, we consider specific adverse conditions related to the financial health of , and business outlook for , the investee . If we have plans to sell the security or it is more likely than not that we will be required to sell the security before recovery, then a decline in fair value below cost is recorded as an impairment charge in other income (expense), net and a new cost basis in the investment is established. If market, industry, and/or investee conditions deteriorate, we may incur future impairments. Equity investments with readily determinable fair values are measured at fair value. Equity investments without readily determinable fair values are measured using the equity method or measured at cost with adjustments for observable changes in price or impairments (referred to as the measurement alternative). We perform a qualitative assessment on a periodic basis and recognize an impairment if there are sufficient indicators that the fair value of the investment is less than carrying value. Changes in value are recorded in other income (expense), net. Derivatives Derivative instruments are recognized as either assets or liabilities and measured at fair value. The accounting for changes in the fair value of a derivative depends on the intended use of the derivative and the resulting designation. For derivative instruments designated as fair value hedges, gains and losses are recognized in other income (expense), net with offsetting gains and losses on the hedged items. Gains and losses representing hedge components excluded from the assessment of effectiveness are recognized in other income (expense), net. For derivative instruments designated as cash flow hedges, gains and losses are initially reported as a component of other comprehensive income and subsequently recognized in earnings with the corresponding hedged item. Gains and losses representing hedge components excluded from the assessment of effectiveness are recognized in earnings. For derivative instruments that are not designated as hedges, gains and losses from changes in fair values are primarily recognized in other income (expense), net. Fair Value Measurements We account for certain assets and liabilities at fair value. The hierarchy below lists three levels of fair value based on the extent to which inputs used in measuring fair value are observable in the market. We categorize each of our fair value measurements in one of these three levels based on the lowest level input that is significant to the fair value measurement in its entirety. These levels are: • Level 1 • Level 2 • Level 3 – inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques, including option pricing models and discounted cash flow models. Our Level 3 assets and liabilities include investments in corporate notes and bonds , municipal securities , and goodwill and intangible assets, when they are recorded at fair value due to an impairment charge. Unobservable inputs used in the models are significant to the fair values of the assets and liabilities. We measure equity investments without readily determinable fair values on a nonrecurring basis. The fair values of these investments are determined based on valuation techniques using the best information available, and may include quoted market prices, market comparables, and discounted cash flow projections. Our other current financial assets and current financial liabilities have fair values that approximate their carrying values. Contract Balances and Other Receivables As of September 30, 2020 and June 30, 2020, other receivables due from suppliers were $1.1 billion and $442 million, respectively, and are included in accounts receivable, net in our consolidated balance sheets. As of both September 30, 2020 and June 30, 2020, long-term accounts receivable, net of allowance for doubtful accounts was $2.7 billion and is included in other long-term assets in our consolidated balance sheets. We record financing receivables when we offer certain of our customers the option to acquire our software products and services offerings through a financing program in a limited number of countries. As of September 30, 2020 and June 30, 2020, financing receivables, net were $4.8 billion and $5.2 billion, respectively, for short-term and long-term financing receivables, which are included in other current assets and other long-term assets in our consolidated balance sheets. We record an allowance to cover expected losses based on troubled accounts, historical experience, and other currently available evidence. Recent Accounting Guidance Recently Adopted Accounting Guidance Financial Instruments – Credit Losses In June 2016, the FASB issued a new standard to replace the incurred loss impairment methodology under current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. We adopted the standard effective July 1, 2020. We use a forward-looking expected credit loss model for accounts receivable, loans, and other financial instruments. Credit losses relating to available-for-sale debt securities are recorded through an allowance for credit losses rather than as a reduction in the amortized cost basis of the securities. We applied 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. The adoption of the standard did not have a material impact on our consolidated financial statements. Recent Accounting Guidance Not Yet Adopted Accounting for Income Taxes In December 2019, the FASB issued a new standard to simplify the accounting for income taxes. The guidance eliminates certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period, and the recognition of deferred tax liabilities for outside basis differences related to changes in ownership of equity method investments and foreign subsidiaries. The guidance also simplifies aspects of accounting for franchise taxes and enacted changes in tax laws or rates, and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill. The standard will be effective for us beginning July 1, 2021, with early adoption permitted. We are currently evaluating the impact of this standard in our consolidated financial statements, including accounting policies, processes, and systems. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 3 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | NOTE 2 — EARNINGS PER SHARE Basic earnings per share (“EPS”) is computed based on the weighted average number of shares of common stock outstanding during the period. Diluted EPS is computed based on the weighted average number of shares of common stock plus the effect of dilutive potential common shares outstanding during the period using the treasury stock method. Dilutive potential common shares include outstanding stock options and stock awards. The components of basic and diluted EPS were as follows: (In millions, except earnings per share) Three Months Ended September 30, 2020 2019 Net income available for common shareholders (A) $ 13,893 $ 10,678 Weighted average outstanding shares of common stock (B) 7,566 7,634 Dilutive effect of stock-based awards 71 76 Common stock and common stock equivalents (C) 7,637 7,710 Earnings Per Share Basic (A/B) $ 1.84 $ 1.40 Diluted (A/C) $ 1.82 $ 1.38 Anti-dilutive stock-based awards excluded from the calculations of diluted EPS were immaterial during the periods presented. |
OTHER INCOME (EXPENSE), NET
OTHER INCOME (EXPENSE), NET | 3 Months Ended |
Sep. 30, 2020 | |
Other Income And Expenses [Abstract] | |
OTHER INCOME (EXPENSE), NET | NOTE 3 — OTHER INCOME (EXPENSE), NET The components of other income (expense), net were as follows: (In millions) Three Months Ended September 30, 2020 2019 Interest and dividends income $ 570 $ 724 Interest expense (589 ) (637 ) Net recognized gains (losses) on investments 125 (57 ) Net gains on derivatives 3 46 Net gains (losses) on foreign currency remeasurements 139 (58 ) Other, net 0 (18 ) Total $ 248 $ 0 Net Recognized Gains (Losses) on Investments Net recognized gains (losses) on debt investments were as follows: (In millions) Three Months Ended September 30, 2020 2019 Realized gains from sales of available-for-sale securities $ 19 $ 7 Realized losses from sales of available-for-sale securities (5 ) (4 ) Impairments and allowance for credit losses 3 (4 ) Total $ 17 $ (1 ) Net recognized gains (losses) on equity investments were as follows: (In millions) Three Months Ended September 30, 2020 2019 Net realized gains on investments sold $ 17 $ 22 Net unrealized gains (losses) on investments still held 100 (56 ) Impairments of investments (9 ) (22 ) Total $ 108 $ (56 ) |
INVESTMENTS
INVESTMENTS | 3 Months Ended |
Sep. 30, 2020 | |
Investments Debt And Equity Securities [Abstract] | |
INVESTMENTS | NOTE 4 — INVESTMENTS Investment Components The components of investments were as follows: (In millions) Fair Value Adjusted Cost Basis Unrealized Gains Unrealized Losses Recorded Basis Cash and Cash Equivalents Short-term Investments Equity Investments September 30, 2020 Changes in Fair Value Recorded in Other Comprehensive Income Commercial paper Level 2 $ 5,128 $ 0 $ 0 $ 5,128 $ 2,869 $ 2,259 $ 0 Certificates of deposit Level 2 2,674 0 0 2,674 1,781 893 0 U.S. government securities Level 1 93,143 6,230 0 99,373 4,556 94,817 0 U.S. agency securities Level 2 3,339 3 0 3,342 1,550 1,792 0 Foreign government bonds Level 2 7,054 7 (3 ) 7,058 0 7,058 0 Mortgage- and asset-backed securities Level 2 4,764 42 (4 ) 4,802 0 4,802 0 Corporate notes and bonds Level 2 8,287 332 (5 ) 8,614 0 8,614 0 Corporate notes and bonds Level 3 52 0 0 52 0 52 0 Municipal securities Level 2 312 60 (3 ) 369 0 369 0 Municipal securities Level 3 95 0 (7 ) 88 0 88 0 Total debt investments $ 124,848 $ 6,674 $ (22 ) $ 131,500 $ 10,756 $ 120,744 $ 0 Changes in Fair Value Recorded in Net Income Equity investments Level 1 $ 1,170 $ 724 $ 0 $ 446 Equity investments Other 2,657 0 0 2,657 Total equity investments $ 3,827 $ 724 $ 0 $ 3,103 Cash $ 5,725 $ 5,725 $ 0 $ 0 Derivatives, net (a) 28 0 28 0 Total $ 141,080 $ 17,205 $ 120,772 $ 3,103 (In millions) Fair Value Adjusted Cost Basis Unrealized Gains Unrealized Losses Recorded Basis Cash and Cash Equivalents Short-term Investments Equity Investments June 30, 2020 Changes in Fair Value Recorded in Other Comprehensive Income Commercial paper Level 2 $ 4,687 $ 1 $ 0 $ 4,688 $ 1,618 $ 3,070 $ 0 Certificates of deposit Level 2 2,898 0 0 2,898 1,646 1,252 0 U.S. government securities Level 1 92,067 6,495 (1 ) 98,561 3,168 95,393 0 U.S. agency securities Level 2 2,439 2 0 2,441 449 1,992 0 Foreign government bonds Level 2 6,982 6 (3 ) 6,985 1 6,984 0 Mortgage- and asset-backed securities Level 2 4,865 41 (6 ) 4,900 0 4,900 0 Corporate notes and bonds Level 2 8,500 327 (17 ) 8,810 0 8,810 0 Corporate notes and bonds Level 3 58 0 0 58 0 58 0 Municipal securities Level 2 313 57 (4 ) 366 0 366 0 Municipal securities Level 3 91 0 0 91 0 91 0 Total debt investments $ 122,900 $ 6,929 $ (31 ) $ 129,798 $ 6,882 $ 122,916 $ 0 Changes in Fair Value Recorded in Net Income Equity investments Level 1 $ 1,198 $ 784 $ 0 $ 414 Equity investments Other 2,551 0 0 2,551 Total equity investments $ 3,749 $ 784 $ 0 $ 2,965 Cash $ 5,910 $ 5,910 $ 0 $ 0 Derivatives, net (a) 35 0 35 0 Total $ 139,492 $ 13,576 $ 122,951 $ 2,965 ( a ) Refer to Note 5 – Derivatives for further information on the fair value of our derivative instruments. Equity investments presented as “Other” in the tables above include investments without readily determinable fair values measured using the equity method or measured at cost with adjustments for observable changes in price or impairments, and investments measured at fair value using net asset value as a practical expedient which are not categorized in the fair value hierarchy. As of both September 30, 2020 and June 30, 2020, equity investments without readily determinable fair values measured at cost with adjustments for observable changes in price or impairments were $1.4 Unrealized Losses on Debt Investments Debt investments with continuous unrealized losses for less than 12 months and 12 months or greater and their related fair values were as follows: Less than 12 Months 12 Months or Greater Total (In millions) Fair Value Unrealized Fair Value Unrealized Total September 30, 2020 U.S. government and agency securities $ 1,847 $ 0 $ 0 $ 0 $ 1,847 $ 0 Foreign government bonds 977 (3 ) 0 0 977 (3 ) Mortgage- and asset-backed securities 832 (4 ) 0 0 832 (4 ) Corporate notes and bonds 421 (5 ) 0 0 421 (5 ) Municipal securities 119 (10 ) 0 0 119 (10 ) Total $ 4,196 $ (22 ) $ 0 $ 0 $ 4,196 $ (22 ) Less than 12 Months 12 Months or Greater Total (In millions) Fair Value Unrealized Fair Value Unrealized Total June 30, 2020 U.S. government and agency securities $ 2,323 $ (1 ) $ 0 $ 0 $ 2,323 $ (1 ) Foreign government bonds 500 (3 ) 0 0 500 (3 ) Mortgage- and asset-backed securities 1,014 (6 ) 0 0 1,014 (6 ) Corporate notes and bonds 649 (17 ) 0 0 649 (17 ) Municipal securities 66 (4 ) 0 0 66 (4 ) Total $ 4,552 $ (31 ) $ 0 $ 0 $ 4,552 $ (31 ) Unrealized losses from fixed-income securities are primarily attributable to changes in interest rates. Management does not believe any remaining unrealized losses represent impairments based on our evaluation of available evidence. Debt Investment Maturities (In millions) Adjusted Cost Basis Estimated Fair Value September 30, 2020 Due in one year or less $ 35,327 $ 35,397 Due after one year through five years 55,735 59,048 Due after five years through 10 years 30,786 33,870 Due after 10 years 3,000 3,185 Total $ 124,848 $ 131,500 |
DERIVATIVES
DERIVATIVES | 3 Months Ended |
Sep. 30, 2020 | |
Derivative Instruments And Hedging Activities Disclosure [Abstract] | |
DERIVATIVES | NOTE 5 — DERIVATIVES We use derivative instruments to manage risks related to foreign currencies, interest rates, equity prices, and credit; to enhance investment returns; and to facilitate portfolio diversification. Our objectives for holding derivatives include reducing, eliminating, and efficiently managing the economic impact of these exposures as effectively as possible. Our derivative programs include strategies that both qualify and do not qualify for hedge accounting treatment. Foreign Currencies Certain forecasted transactions, assets, and liabilities are exposed to foreign currency risk. We monitor our foreign currency exposures daily to maximize the economic effectiveness of our foreign currency hedge positions. Foreign currency risks related to certain non-U.S. dollar-denominated investments are hedged using foreign exchange forward contracts that are designated as fair value hedging instruments. Foreign currency risks related to certain Euro-denominated debt are hedged using foreign exchange forward contracts that are designated as cash flow hedging instruments. In the past, option and forward contracts were used to hedge a portion of forecasted international revenue and were designated as cash flow hedging instruments. Principal currencies hedged included the Euro, Japanese yen, British pound, Canadian dollar, and Australian dollar. Certain options and forwards not designated as hedging instruments are also used to manage the variability in foreign exchange rates on certain balance sheet amounts and to manage other foreign currency exposures. Interest Rate Interest rate risks related to certain fixed-rate debt are hedged using interest rate swaps that are designated as fair value hedging instruments to effectively convert the fixed interest rates to floating interest rates. Securities held in our fixed-income portfolio are subject to different interest rate risks based on their maturities. We manage the average maturity of our fixed-income portfolio to achieve economic returns that correlate to certain broad-based fixed-income indices using exchange-traded option and futures contracts and over-the-counter swap and option contracts . These contracts are not designated as hedging instruments and are included in “O ther contracts ” in the tables below. Equity Securities held in our equity investments portfolio are subject to market price risk. At times, we may hold options, futures, and swap contracts. These contracts are not designated as hedging instruments and are included in “Other contracts” in the tables below. Credit Our fixed-income portfolio is diversified and consists primarily of investment-grade securities. We use credit default swap contracts to manage credit exposures relative to broad-based indices and to facilitate portfolio diversification. These contracts are not designated as hedging instruments and are included in “Other contracts” in the tables below. Credit-Risk-Related Contingent Features Certain of our counterparty agreements for derivative instruments contain provisions that require our issued and outstanding long-term unsecured debt to maintain an investment grade credit rating and require us to maintain minimum liquidity of $1.0 billion. To the extent we fail to meet these requirements, we will be required to post collateral, similar to the standard convention related to over-the-counter derivatives. As of September 30, 2020, our long-term unsecured debt rating was AAA, and cash investments were in excess of $1.0 billion. As a result, no collateral was required to be posted. The following table presents the notional amounts of our outstanding derivative instruments measured in U.S. dollar equivalents: (In millions) September 30, 2020 June 30, 2020 Designated as Hedging Instruments Foreign exchange contracts purchased $ 635 $ 635 Foreign exchange contracts sold 6,844 6,754 Interest rate contracts purchased 1,292 1,295 Not Designated as Hedging Instruments Foreign exchange contracts purchased 11,935 11,896 Foreign exchange contracts sold 10,903 15,595 Other contracts purchased 2,202 1,844 Other contracts sold 749 757 Fair Values of Derivative Instruments The following table presents our derivative instruments: Derivative Derivative Derivative Derivative (In millions) Assets Liabilities Assets Liabilities September 30, 2020 June 30, 2020 Designated as Hedging Instruments Foreign exchange contracts $ 16 $ (67 ) $ 44 $ (54 ) Interest rate contracts 89 0 93 0 Not Designated as Hedging Instruments Foreign exchange contracts 165 (247 ) 245 (334 ) Other contracts 6 (27 ) 18 (11 ) Gross amounts of derivatives 276 (341 ) 400 (399 ) Gross amounts of derivatives offset in the balance sheet (74 ) 76 (154 ) 158 Cash collateral received 0 (58 ) 0 (154 ) Net amounts of derivatives $ 202 $ (323 ) $ 246 $ (395 ) Reported as Short-term investments $ 28 $ 0 $ 35 $ 0 Other current assets 81 0 199 0 Other long-term assets 93 0 12 0 Other current liabilities 0 (232 ) 0 (334 ) Other long-term liabilities 0 (91 ) 0 (61 ) Total $ 202 $ (323 ) $ 246 $ (395 ) Gross derivative assets and liabilities subject to legally enforceable master netting agreements for which we have elected to offset were $274 million and $340 million, respectively, as of September 30, 2020, and $399 million and $399 million, respectively, as of June 30, 2020. The following table presents the fair value of our derivatives instruments on a gross basis: (In millions) Level 1 Level 2 Level 3 Total September 30, 2020 Derivative assets $ 0 $ 275 $ 1 $ 276 Derivative liabilities 0 (341 ) 0 (341 ) June 30, 2020 Derivative assets 1 398 1 400 Derivative liabilities 0 (399 ) 0 (399 ) Gains (losses) on derivative instruments recognized in our consolidated income statements were as follows: (In millions) Revenue Other Income (Expense), Net Revenue Other Income (Expense), Net Three Months Ended September 30, 2020 2019 Designated as Fair Value Hedging Instruments Foreign exchange contracts Derivatives $ 0 $ (169 ) $ 0 $ 30 Hedged items 0 168 0 (33 ) Excluded from effectiveness assessment 0 8 0 41 Interest rate contracts Derivatives 0 0 0 1 Hedged items 0 4 0 (1 ) Designated as Cash Flow Hedging Instruments Foreign exchange contracts Amount reclassified from accumulated other comprehensive income 0 20 0 (5 ) Excluded from effectiveness assessment 0 0 0 0 Not Designated as Hedging Instruments Foreign exchange contracts 0 58 0 (171 ) Other contracts 0 4 0 1 Gains (losses), net of tax, on derivative instruments recognized in our consolidated comprehensive income statements were as follows: (In millions) Three Months Ended September 30, 2020 2019 Designated as Cash Flow Hedging Instruments Foreign exchange contracts Included in effectiveness assessment $ 20 $ (6 ) |
INVENTORIES
INVENTORIES | 3 Months Ended |
Sep. 30, 2020 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | NOTE 6 — INVENTORIES The components of inventories were as follows: (In millions) September 30, 2020 June 30, 2020 Raw materials $ 796 $ 700 Work in process 83 83 Finished goods 1,826 1,112 Total $ 2,705 $ 1,895 |
BUSINESS COMBINATIONS
BUSINESS COMBINATIONS | 3 Months Ended |
Sep. 30, 2020 | |
Business Combinations [Abstract] | |
BUSINESS COMBINATIONS | NOTE 7 — BUSINESS COMBINATIONS On September 19, 2020, we entered into a definitive agreement to acquire ZeniMax Media Inc., the parent company of Bethesda Softworks LLC (“Bethesda”), for $7.5 billion in cash. Bethesda is one of the largest, privately held game developers and publishers in the world, and will bring a broad portfolio of games, technology, and talent to Xbox. We expect this acquisition to close in the second half of fiscal year 2021, subject to customary closing conditions and completion of regulatory review. |
GOODWILL
GOODWILL | 3 Months Ended |
Sep. 30, 2020 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
GOODWILL | NOTE 8 — GOODWILL Changes in the carrying amount of goodwill were as follows: (In millions) June 30, 2020 Acquisitions Other September 30, 2020 Productivity and Business Processes $ 24,190 $ 0 $ 33 $ 24,223 Intelligent Cloud 12,697 443 1 13,141 More Personal Computing 6,464 0 62 6,526 Total $ 43,351 $ 443 $ 96 $ 43,890 The measurement periods for the valuation of assets acquired and liabilities assumed end as soon as information on the facts and circumstances that existed as of the acquisition dates becomes available, but do not exceed 12 months. Adjustments in purchase price allocations may require a change in the amounts allocated to goodwill during the periods in which the adjustments are determined. Any change in the goodwill amounts resulting from foreign currency translations and purchase accounting adjustments are presented as “Other” in the table above. Also included in “Other” are business dispositions and transfers between segments due to reorganizations, as applicable. |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 3 Months Ended |
Sep. 30, 2020 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS | NOTE 9 — INTANGIBLE ASSETS The components of intangible assets, all of which are finite-lived, were as follows: (In millions) Gross Accumulated Net Gross Accumulated Net September 30, 2020 June 30, 2020 Technology-based $ 8,327 $ (6,527 ) $ 1,800 $ 8,160 $ (6,381 ) $ 1,779 Customer-related 5,066 (2,482 ) 2,584 4,967 (2,320 ) 2,647 Marketing-related 4,159 (1,655 ) 2,504 4,158 (1,588 ) 2,570 Contract-based 475 (440 ) 35 474 (432 ) 42 Total $ 18,027 $ (11,104 ) $ 6,923 $ 17,759 $ (10,721 ) $ 7,038 Intangible assets amortization expense was $383 million and $434 million for the three months ended September 30, 2020 and 2019, respectively. The following table outlines the estimated future amortization expense related to intangible assets held as of September 30, 2020: (In millions) Year Ending June 30, 2021 (excluding the three months ended September 30, 2020) $ 1,150 2022 1,461 2023 1,267 2024 904 2025 487 Thereafter 1,654 Total $ 6,923 |
DEBT
DEBT | 3 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
DEBT | NOTE 10 — DEBT The components of debt were as follows: (In millions, issuance by calendar year) Maturities (calendar year) Stated Interest Rate Effective Interest Rate September 30 , 2020 June 30, 2020 2009 issuance of $3.8 billion (a) 2039 5.20% 5.24% $ 559 $ 559 2010 issuance of $4.8 billion (a) 2020 – 2040 3.00% – 4.50% 3.14% – 4.57% 1,571 1,571 2011 issuance of $2.3 billion (a) 2021 – 2041 4.00% – 5.30% 4.08% – 5.36% 1,270 1,270 2012 issuance of $2.3 billion 2022 – 2042 2.13% – 3.50% 2.24% – 3.57% 1,650 1,650 2013 issuance of $5.2 billion (a) 2023 – 2043 2.38% – 4.88% 2.47% – 4.92% 2,919 2,919 2013 issuance of €4.1 billion 2021 – 2033 2.13% – 3.13% 2.23% – 3.22% 4,748 4,549 2015 issuance of $23.8 billion (a) 2020 – 2055 2.00% – 4.75% 2.09% – 4.78% 15,549 15,549 2016 issuance of $19.8 billion (a) 2021 – 2056 1.55% – 3.95% 1.64% – 4.03% 16,955 16,955 2017 issuance of $17.0 billion (a) 2022 – 2057 2.40% – 4.50% 2.52% – 4.53% 12,385 12,385 2020 issuance of $10.0 billion (a) 2050 – 2060 2.53% – 2.68% 2.53% – 2.68% 10,000 10,000 Total face value 67,606 67,407 Unamortized discount and issuance costs (542 ) (554 ) Hedge fair value adjustments (b) 89 93 Premium on debt exchange (a) (3,601 ) (3,619 ) Total debt 63,552 63,327 Current portion of long-term debt (6,497 ) (3,749 ) Long-term debt $ 57,055 $ 59,578 (a) In June 2020, we exchanged a portion of our existing debt at premium for cash and new debt with longer maturities. The premium will be amortized over the term of the new debt. (b ) Refer to Note 5 – Derivatives for further information on the interest rate swaps related to fixed-rate debt. As of September 30, 2020 and June 30, 2020, the estimated fair value of long-term debt, including the current portion, was $77.7 billion and $77.1 billion, respectively. The estimated fair values are based on Level 2 inputs. Debt in the table above is comprised of senior unsecured obligations and ranks equally with our other outstanding obligations. Interest is paid semi-annually, except for the Euro-denominated debt, which is paid annually. The following table outlines maturities of our long-term debt , including the current portion, September 30 (In millions) Year Ending June 30, 2021 (excluding the three months ended September 30, 2020) $ 3,750 2022 8,052 2023 2,750 2024 5,250 2025 2,250 Thereafter 45,554 Total $ 67,606 |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 11 — INCOME TAXES Effective Tax Rate Our effective tax rate was 14% and 16% for the three months ended September 30, 2020 and 2019, respectively. The decrease in our effective tax rate for the current quarter compared to the prior year was primarily due to an increase in tax benefits relating to stock-based compensation. Our effective tax rate was lower than the U.S. federal statutory rate for the three months ended September 30, 2020, 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 and Puerto Rico, and tax benefits relating to stock-based compensation. Uncertain Tax Positions As of September 30, 2020 and June 30, 2020, unrecognized tax benefits and other income tax liabilities were $16.9 billion and $16.6 billion, respectively, and are included in long-term income taxes in our consolidated balance sheets. We settled a portion of the Internal Revenue Service (“IRS”) audit for tax years 2004 to 2006 in fiscal year 2011. In February 2012, the IRS withdrew its 2011 Revenue Agents Report related to unresolved issues for tax years 2004 to 2006 and reopened the audit phase of the examination. We also settled a portion of the IRS audit for tax years 2007 to 2009 in fiscal year 2016, and a portion of the IRS audit for tax years 2010 to 2013 in fiscal year 2018. We remain under audit for tax years 2004 to 2017. As of September 30, 2020, the primary unresolved issues for the IRS audits relate to transfer pricing, which could have a material impact in our consolidated financial statements when the matters are resolved. We believe our allowances for income tax contingencies are adequate. We have not received a proposed assessment for the unresolved key transfer pricing issues and do not expect a final resolution of these issues in the next 12 months. Based on the information currently available, we do not anticipate a significant increase or decrease to our tax contingencies for these issues within the next 12 months. We are subject to income tax in many jurisdictions outside the U.S. Our operations in certain jurisdictions remain subject to examination for tax years 1996 to 2020, some of which are currently under audit by local tax authorities. The resolution of each of these audits is not expected to be material to our consolidated financial statements. |
UNEARNED REVENUE
UNEARNED REVENUE | 3 Months Ended |
Sep. 30, 2020 | |
Revenue From Contract With Customer [Abstract] | |
UNEARNED REVENUE | NOTE 12 — UNEARNED REVENUE Unearned revenue by segment was as follows: (In millions) September 30, June 30, Productivity and Business Processes $ 17,675 $ 18,643 Intelligent Cloud 15,039 16,620 More Personal Computing 3,591 3,917 Total $ 36,305 $ 39,180 Changes in unearned revenue were as follows: (In millions) Three Months Ended September 30, 2020 Balance, beginning of period $ 39,180 Deferral of revenue 17,976 Recognition of unearned revenue (20,851 ) Balance, end of period $ 36,305 Revenue allocated to remaining performance obligations, which includes unearned revenue and amounts that will be invoiced and recognized as revenue in future periods , was $ 111 billion as of September 30 , 20 20 , of which $ 107 billion is related to the commercial portion of revenue . We expect to recognize approximately 50 % of th is revenue over the next 12 months and the remainder thereafter. |
LEASES
LEASES | 3 Months Ended |
Sep. 30, 2020 | |
Leases [Abstract] | |
LEASES | NOTE 13 — LEASES We have operating and finance leases for datacenters, corporate offices, research and development facilities, retail stores, and certain equipment. Our leases have remaining lease terms of 1 year to 20 years, some of which include options to extend the leases for up to 5 years The components of lease expense were as follows: (In millions) Three Months Ended September 30, 2020 2019 Operating lease cost $ 498 $ 465 Finance lease cost: Amortization of right-of-use assets $ 206 $ 125 Interest on lease liabilities 92 78 Total finance lease cost $ 298 $ 203 Supplemental cash flow information related to leases was as follows: (In millions) Three Months Ended September 30, 2020 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 491 $ 453 Operating cash flows from finance leases 92 78 Financing cash flows from finance leases 136 79 Right-of-use assets obtained in exchange for lease obligations: Operating leases 678 983 Finance leases 635 1,489 Supplemental balance sheet information related to leases was as follows: (In millions, except lease term and discount rate) September 30, 2020 June 30, Operating Leases Operating lease right-of-use assets $ 9,047 $ 8,753 Other current liabilities $ 1,744 $ 1,616 Operating lease liabilities 7,753 7,671 Total operating lease liabilities $ 9,497 $ 9,287 Finance Leases Property and equipment, at cost $ 11,174 $ 10,371 Accumulated depreciation (1,591 ) (1,385 ) Property and equipment, net $ 9,583 $ 8,986 Other current liabilities $ 596 $ 540 Other long-term liabilities 9,571 8,956 Total finance lease liabilities $ 10,167 $ 9,496 Weighted Average Remaining Lease Term Operating leases 7 years 8 years Finance leases 12 years 13 years Weighted Average Discount Rate Operating leases 2.6% 2.7% Finance leases 3.8% 3.9% Maturities of lease liabilities were as follows: (In millions) Year Ending June 30, Operating Leases Finance Leases 2021 (excluding the three months ended September 30, 2020) $ 1,522 $ 709 2022 1,738 958 2023 1,566 968 2024 1,362 982 2025 1,090 1,304 Thereafter 3,513 7,805 Total lease payments 10,791 12,726 Less imputed interest (1,294 ) (2,559 ) Total $ 9,497 $ 10,167 As of September 30, 2020, we have additional operating and finance leases, primarily for datacenters, that have not yet commenced of $4.3 billion and $4.6 billion, respectively. These operating and finance leases will commence between fiscal year 2021 and fiscal year 2024 with lease terms of 1 year 16 years |
CONTINGENCIES
CONTINGENCIES | 3 Months Ended |
Sep. 30, 2020 | |
Commitments And Contingencies Disclosure [Abstract] | |
CONTINGENCIES | NOTE 14 — CONTINGENCIES Patent and Intellectual Property Claims There were 70 patent infringement cases pending against Microsoft as of September 30, 2020, none of which are material individually or in aggregate. 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. Following a mediation, the parties agreed to a global settlement of all three Canadian actions, and submitted the proposed settlement agreement to the courts in all three jurisdictions for approval. The final settlement and form of notice have been approved by the courts in British Columbia, Ontario, and Quebec. The ten month claims period will commence upon distribution of notice to the class, Other Antitrust Litigation and Claims China State Administration for Industry and Commerce Investigation In 2014, Microsoft was informed that China’s State Agency for Market Regulation (“SAMR”) (formerly State Administration for Industry and Commerce) had begun a formal investigation relating to China’s Anti-Monopoly Law, and the SAMR conducted onsite inspections of Microsoft offices in Beijing, Shanghai, Guangzhou, and Chengdu. The SAMR has presented its preliminary views as to certain possible violations of China's Anti-Monopoly Law, and discussions are expected to continue. Product-Related Litigation U.S. Cell Phone Litigation Microsoft Mobile Oy, a subsidiary of Microsoft, along with other handset manufacturers and network operators, is a defendant in 40 lawsuits filed in the Superior Court for the District of Columbia by individual plaintiffs who allege that radio emissions from cellular handsets caused their brain tumors and other adverse health effects. We assumed responsibility for these claims in our agreement to acquire Nokia’s Devices and Services business and have been substituted for the Nokia defendants. Nine of these cases were filed in 2002 and are consolidated for certain pre-trial proceedings; the remaining cases are stayed. In a separate 2009 decision, the Court of Appeals for the District of Columbia held that adverse health effect claims arising from the use of cellular handsets that operate within the U.S. Federal Communications Commission radio frequency emission guidelines (“FCC Guidelines”) are pre-empted by federal law. The plaintiffs allege that their handsets either operated outside the FCC Guidelines or were manufactured before the FCC Guidelines went into effect. The lawsuits also allege an industry-wide conspiracy to manipulate the science and testing around emission guidelines. In 2013, the defendants in the consolidated cases moved to exclude the plaintiffs’ expert evidence of general causation on the basis of flawed scientific methodologies. In 2014, the trial court granted in part and denied in part the defendants’ motion to exclude the plaintiffs’ general causation experts. The defendants filed an interlocutory appeal to the District of Columbia Court of Appeals challenging the standard for evaluating expert scientific evidence. In October 2016, the Court of Appeals issued its decision adopting the standard advocated by the defendants and remanding the cases to the trial court for further proceedings under that standard. The plaintiffs have filed supplemental expert evidence, portions of which the defendants have moved to strike. In August 2018, the trial court issued an order striking portions of the plaintiffs’ expert reports. A hearing on general causation is scheduled for July 2021. Other Contingencies We also are subject to a variety of other claims and suits that arise from time to time in the ordinary course of our business. Although management currently believes that resolving claims against us, individually or in aggregate, will not have a material adverse impact in our consolidated financial statements, these matters are subject to inherent uncertainties and management’s view of these matters may change in the future. As of September 30, 2020, we accrued aggregate legal liabilities of $311 million. While we intend to defend these matters vigorously, adverse outcomes that we estimate could reach approximately $500 million in aggregate beyond recorded amounts are reasonably possible. Were unfavorable final outcomes to occur, there exists the possibility of a material adverse impact in our consolidated financial statements for the period in which the effects become reasonably estimable. |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 3 Months Ended |
Sep. 30, 2020 | |
Equity [Abstract] | |
STOCKHOLDERS' EQUITY | NOTE 15 — STOCKHOLDERS’ EQUITY Share Repurchases On September 20, 2016, our Board of Directors approved a share repurchase program authorizing up to $40.0 billion in share repurchases. This share repurchase program commenced in December 2016 and was completed in February 2020. On September 18, 2019, our Board of Directors approved a share repurchase program authorizing up to $40.0 billion in share repurchases. This share repurchase program commenced in February 2020, following completion of the program approved on September 20, 2016, has no expiration date, and may be terminated at any time. As of September 30, 2020, $26.4 billion remained of this $40.0 billion share repurchase program. We repurchased the following shares of common stock under the share repurchase program: (In millions) Shares Amount Shares Amount Fiscal Year 2021 2020 First Quarter 25 $ 5,270 29 $ 4,000 Shares repurchased during the first quarter of fiscal year 2021 were under the share repurchase program approved on September 18, 2019. Shares repurchased during the first quarter of fiscal year 2020 were under the share repurchase program approved on September 20, 2016. The above table excludes shares repurchased to settle employee tax withholding related to the vesting of stock awards of $1.5 billion and $967 million for the first quarter of fiscal years 2021 and 2020, respectively. All repurchases were made using cash resources. Dividends Our Board of Directors declared the following dividends: Declaration Date Record Date Payment Date Dividend Per Share Amount Fiscal Year 2021 (In millions) September 15, 2020 November 19, 2020 December 10, 2020 $ 0.56 $ 4,236 Fiscal Year 2020 September 18, 2019 November 21, 2019 December 12, 2019 $ 0.51 $ 3,886 The dividend declared on September 15, 2020 was included in other current liabilities as of September 30, 2020. |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | 3 Months Ended |
Sep. 30, 2020 | |
Equity [Abstract] | |
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | NOTE 16 — ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) The following table summarizes the changes in accumulated other comprehensive income (loss) by component: (In millions) Three Months Ended September 30, 2020 2019 Derivatives Balance, beginning of period $ (38 ) $ 0 Unrealized gains (losses), net of tax of $5 20 (6 ) Reclassification adjustments for (gains) losses included in earnings (20 ) 5 Tax expense (benefit) included in provision for income taxes 4 (1 ) Amounts reclassified from accumulated other comprehensive income (loss) (16 ) 4 Net change related to derivatives, net of tax of $1 4 (2 ) Balance, end of period $ (34 ) $ (2 ) Investments Balance, beginning of period $ 5,478 $ 1,488 Unrealized gains (losses), net of tax of $(50) (188 ) 576 Reclassification adjustments for (gains) losses included in other income (expense), net (17 ) 1 Tax expense included in provision for income taxes 4 0 Amounts reclassified from accumulated other comprehensive income (loss) (13 ) 1 Net change related to investments, net of tax of $(54) (201 ) 577 Cumulative effect of accounting changes 10 0 Balance, end of period $ 5,287 $ 2,065 Translation Adjustments and Other Balance, beginning of period $ (2,254 ) $ (1,828 ) Translation adjustments and other, net of tax of $(9) 111 (296 ) Balance, end of period $ (2,143 ) $ (2,124 ) Accumulated other comprehensive income (loss), end of period $ 3,110 $ (61 ) |
SEGMENT INFORMATION AND GEOGRAP
SEGMENT INFORMATION AND GEOGRAPHIC DATA | 3 Months Ended |
Sep. 30, 2020 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION AND GEOGRAPHIC DATA | NOTE 17 — SEGMENT INFORMATION AND GEOGRAPHIC DATA In its operation of the business, management, including our chief operating decision maker, who is also our Chief Executive Officer, reviews certain financial information, including segmented internal profit and loss statements prepared on a basis not consistent with GAAP. During the periods presented, we reported our financial performance based on the following segments: Productivity and Business Processes, Intelligent Cloud, and More Personal Computing. 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, the Office 365 portion of Microsoft 365 Commercial subscriptions, and Office licensed on-premises, comprising Office, Exchange, SharePoint, Microsoft Teams, Office 365 Security and Compliance, and Skype for Business, and related Client Access Licenses (“CALs”). • Office Consumer, including Microsoft 365 Consumer subscriptions and Office licensed on-premises, and Office Consumer Services, including Skype, Outlook.com, and OneDrive. • LinkedIn, including Talent Solutions, Learning Solutions, Marketing Solutions, Sales Solutions, and Premium Subscriptions. • Dynamics business solutions, including Dynamics 365, a set of cloud-based applications across ERP and CRM, Dynamics ERP on-premises, and Dynamics CRM on-premises. Intelligent Cloud Our Intelligent Cloud segment consists of our public, private, and hybrid server products and cloud services that can power modern business and developers. This segment primarily comprises: • Server products and cloud services, including Azure; SQL Server, Windows Server, Visual Studio, System Center, and related CALs; and GitHub. • Enterprise Services, including Premier Support Services and Microsoft Consulting Services. More Personal Computing Our More Personal Computing segment consists of products and services that put customers at the center of the experience with our technology. This segment primarily comprises: • Windows, including Windows OEM licensing and other non-volume licensing of the Windows operating system; Windows Commercial, comprising volume licensing of the Windows operating system, Windows cloud services, and other Windows commercial offerings; patent licensing; Windows Internet of Things; and MSN advertising. • Devices, including Surface and PC accessories. • Gaming, including Xbox hardware and Xbox content and services, comprising Xbox Live (transactions, Xbox Game Pass and other subscriptions, cloud services, and advertising), video games, and third-party video game royalties. • Search. 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. Segment revenue and operating income were as follows during the periods presented: (In millions) Three Months Ended September 30, 2020 2019 Revenue Productivity and Business Processes $ 12,319 $ 11,077 Intelligent Cloud 12,986 10,845 More Personal Computing 11,849 11,133 Total $ 37,154 $ 33,055 Operating Income Productivity and Business Processes $ 5,706 $ 4,782 Intelligent Cloud 5,422 3,889 More Personal Computing 4,748 4,015 Total $ 15,876 $ 12,686 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, 2020 or 2019. Revenue, classified by the major geographic areas in which our customers were located, was as follows: (In millions) Three Months Ended September 30, 2020 2019 United States (a) $ 19,025 $ 17,270 Other countries 18,129 15,785 Total $ 37,154 $ 33,055 (a) Includes billings to OEMs and certain multinational organizations because of the nature of these businesses and the impracticability of determining the geographic source of the revenue. Revenue from external customers, classified by significant product and service offerings, was as follows: (In millions) Three Months Ended September 30, 2020 2019 Server products and cloud services $ 11,195 $ 9,192 Office products and cloud services 9,278 8,466 Windows 5,305 5,353 Gaming 3,092 2,542 2,206 1,909 Search advertising 1,789 1,991 Enterprise Services 1,637 1,545 Devices 1,620 1,202 Other 1,032 855 Total $ 37,154 $ 33,055 Our commercial cloud revenue, which includes Office 365 Commercial, Azure, the commercial portion of LinkedIn, Dynamics 365, and other commercial cloud properties, was $15.2 billion and $11.6 billion for the three months ended September 30, 2020 and 2019, respectively. These amounts are primarily included in Office products and cloud services, Server products and cloud services, and LinkedIn in the table above. Assets are not allocated to segments for internal reporting presentations. A portion of amortization and depreciation is included with various other costs in an overhead allocation to each segment. It is impracticable for us to separately identify the amount of amortization and depreciation by segment that is included in the measure of segment profit or loss. |
ACCOUNTING POLICIES (Policies)
ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Accounting Principles | Accounting Principles Our unaudited interim consolidated financial statements and accompanying notes are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). In the opinion of management, the unaudited interim consolidated financial statements reflect all adjustments of a normal recurring nature that are necessary for a fair presentation of the results for the interim periods presented. Interim results are not necessarily indicative of results for a full year. The information included in this Form 10-Q should be read in conjunction with information included in the Microsoft Corporation fiscal year 2020 Form 10-K filed with the U.S. Securities and Exchange Commission (“SEC”) on July 30, 2020. |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of Microsoft Corporation and its subsidiaries. Intercompany transactions and balances have been eliminated. |
Estimates and Assumptions | Estimates and Assumptions Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. Examples of estimates and assumptions include: for revenue recognition, determining the nature and timing of satisfaction of performance obligations, and determining the standalone selling price (“SSP”) of performance obligations, variable consideration, and other obligations such as product returns and refunds; loss contingencies; product warranties; the fair value of and/or potential impairment of goodwill and intangible assets for our reporting units; product life cycles; useful lives of our tangible and intangible assets; allowances for doubtful accounts; the market value of, and demand for, our inventory; stock-based compensation forfeiture rates; when technological feasibility is achieved for our products; the potential outcome of uncertain tax positions that have been recognized in our consolidated financial statements or tax returns; and determining the timing and amount of impairments for investments. Actual results and outcomes may differ from management’s estimates and assumptions due to risks and uncertainties, including uncertainty in the current economic environment due to the recent outbreak of a novel strain of the coronavirus (“COVID-19”). In July 2020, we completed an assessment of the useful lives of our server and network equipment and determined we should increase the estimated useful life of server equipment from three years to four years and increase the estimated useful life of network equipment from two years to four years. This change in accounting estimate was effective beginning fiscal year 2021. Based on the carrying amount of server and network equipment included in property and equipment, net as of June 30, 2020, the effect of this change in estimate for the three months ended September 30, 2020, was an increase in operating income of $927 million and net income of $763 million, or $0.10 |
Investments | Investments We consider all highly liquid interest-earning investments with a maturity of three months or less at the date of purchase to be cash equivalents. The fair values of these investments approximate their carrying values. In general, investments with original maturities of greater than three months and remaining maturities of less than one year are classified as short-term investments. Investments with maturities beyond one year may be classified as short-term based on their highly liquid nature and because such marketable securities represent the investment of cash that is available for current operations. Debt investments are classified as available-for-sale and realized gains and losses are recorded using the specific identification method. Changes in fair value, excluding credit losses and impairments, are recorded in other comprehensive income . Fair value is calculated based on publicly available market information or other estimates determined by management. If the cost of an investment exceeds its fair value, we evaluate, among other factors, general market conditions, credit quality of debt instrument issuers, and the extent to which the fair value is less than cost. To determine credit losses, we employ a systematic methodology that considers available quantitative and qualitative evidence . In addition, we consider specific adverse conditions related to the financial health of , and business outlook for , the investee . If we have plans to sell the security or it is more likely than not that we will be required to sell the security before recovery, then a decline in fair value below cost is recorded as an impairment charge in other income (expense), net and a new cost basis in the investment is established. If market, industry, and/or investee conditions deteriorate, we may incur future impairments. Equity investments with readily determinable fair values are measured at fair value. Equity investments without readily determinable fair values are measured using the equity method or measured at cost with adjustments for observable changes in price or impairments (referred to as the measurement alternative). We perform a qualitative assessment on a periodic basis and recognize an impairment if there are sufficient indicators that the fair value of the investment is less than carrying value. Changes in value are recorded in other income (expense), net. |
Derivatives | Derivatives Derivative instruments are recognized as either assets or liabilities and measured at fair value. The accounting for changes in the fair value of a derivative depends on the intended use of the derivative and the resulting designation. For derivative instruments designated as fair value hedges, gains and losses are recognized in other income (expense), net with offsetting gains and losses on the hedged items. Gains and losses representing hedge components excluded from the assessment of effectiveness are recognized in other income (expense), net. For derivative instruments designated as cash flow hedges, gains and losses are initially reported as a component of other comprehensive income and subsequently recognized in earnings with the corresponding hedged item. Gains and losses representing hedge components excluded from the assessment of effectiveness are recognized in earnings. For derivative instruments that are not designated as hedges, gains and losses from changes in fair values are primarily recognized in other income (expense), net. |
Fair Value Measurements | Fair Value Measurements We account for certain assets and liabilities at fair value. The hierarchy below lists three levels of fair value based on the extent to which inputs used in measuring fair value are observable in the market. We categorize each of our fair value measurements in one of these three levels based on the lowest level input that is significant to the fair value measurement in its entirety. These levels are: • Level 1 • Level 2 • Level 3 – inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques, including option pricing models and discounted cash flow models. Our Level 3 assets and liabilities include investments in corporate notes and bonds , municipal securities , and goodwill and intangible assets, when they are recorded at fair value due to an impairment charge. Unobservable inputs used in the models are significant to the fair values of the assets and liabilities. We measure equity investments without readily determinable fair values on a nonrecurring basis. The fair values of these investments are determined based on valuation techniques using the best information available, and may include quoted market prices, market comparables, and discounted cash flow projections. Our other current financial assets and current financial liabilities have fair values that approximate their carrying values. |
Contract Balances and Other Receivables | Contract Balances and Other Receivables As of September 30, 2020 and June 30, 2020, other receivables due from suppliers were $1.1 billion and $442 million, respectively, and are included in accounts receivable, net in our consolidated balance sheets. As of both September 30, 2020 and June 30, 2020, long-term accounts receivable, net of allowance for doubtful accounts was $2.7 billion and is included in other long-term assets in our consolidated balance sheets. We record financing receivables when we offer certain of our customers the option to acquire our software products and services offerings through a financing program in a limited number of countries. As of September 30, 2020 and June 30, 2020, financing receivables, net were $4.8 billion and $5.2 billion, respectively, for short-term and long-term financing receivables, which are included in other current assets and other long-term assets in our consolidated balance sheets. We record an allowance to cover expected losses based on troubled accounts, historical experience, and other currently available evidence. |
Recent Accounting Guidance | Recent Accounting Guidance Recently Adopted Accounting Guidance Financial Instruments – Credit Losses In June 2016, the FASB issued a new standard to replace the incurred loss impairment methodology under current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. We adopted the standard effective July 1, 2020. We use a forward-looking expected credit loss model for accounts receivable, loans, and other financial instruments. Credit losses relating to available-for-sale debt securities are recorded through an allowance for credit losses rather than as a reduction in the amortized cost basis of the securities. We applied 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. The adoption of the standard did not have a material impact on our consolidated financial statements. Recent Accounting Guidance Not Yet Adopted Accounting for Income Taxes In December 2019, the FASB issued a new standard to simplify the accounting for income taxes. The guidance eliminates certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period, and the recognition of deferred tax liabilities for outside basis differences related to changes in ownership of equity method investments and foreign subsidiaries. The guidance also simplifies aspects of accounting for franchise taxes and enacted changes in tax laws or rates, and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill. The standard will be effective for us beginning July 1, 2021, with early adoption permitted. We are currently evaluating the impact of this standard in our consolidated financial statements, including accounting policies, processes, and systems. |
Earnings Per Share | Basic earnings per share (“EPS”) is computed based on the weighted average number of shares of common stock outstanding during the period. Diluted EPS is computed based on the weighted average number of shares of common stock plus the effect of dilutive potential common shares outstanding during the period using the treasury stock method. Dilutive potential common shares include outstanding stock options and stock awards. |
Segment Reporting | Revenue and costs are generally directly attributed to our segments. However, due to the integrated structure of our business, certain revenue recognized and costs incurred by one segment may benefit other segments. Revenue from certain contracts is allocated among the segments based on the relative value of the underlying products and services, which can include allocation based on actual prices charged, prices when sold separately, or estimated costs plus a profit margin. Cost of revenue is allocated in certain cases based on a relative revenue methodology. Operating expenses that are allocated primarily include those relating to marketing of products and services from which multiple segments benefit and are generally allocated based on relative gross margin. In addition, certain costs incurred at a corporate level that 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. Assets are not allocated to segments for internal reporting presentations. A portion of amortization and depreciation is included with various other costs in an overhead allocation to each segment. It is impracticable for us to separately identify the amount of amortization and depreciation by segment that is included in the measure of segment profit or loss. |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 3 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
Basic and Diluted Earnings Per Share | The components of basic and diluted EPS were as follows: (In millions, except earnings per share) Three Months Ended September 30, 2020 2019 Net income available for common shareholders (A) $ 13,893 $ 10,678 Weighted average outstanding shares of common stock (B) 7,566 7,634 Dilutive effect of stock-based awards 71 76 Common stock and common stock equivalents (C) 7,637 7,710 Earnings Per Share Basic (A/B) $ 1.84 $ 1.40 Diluted (A/C) $ 1.82 $ 1.38 |
OTHER INCOME (EXPENSE), NET (Ta
OTHER INCOME (EXPENSE), NET (Tables) | 3 Months Ended |
Sep. 30, 2020 | |
Components of Other Income (Expense), Net | The components of other income (expense), net were as follows: (In millions) Three Months Ended September 30, 2020 2019 Interest and dividends income $ 570 $ 724 Interest expense (589 ) (637 ) Net recognized gains (losses) on investments 125 (57 ) Net gains on derivatives 3 46 Net gains (losses) on foreign currency remeasurements 139 (58 ) Other, net 0 (18 ) Total $ 248 $ 0 |
Debt Securities | |
Net Recognized Gains (Losses) on Investments | Net recognized gains (losses) on debt investments were as follows: (In millions) Three Months Ended September 30, 2020 2019 Realized gains from sales of available-for-sale securities $ 19 $ 7 Realized losses from sales of available-for-sale securities (5 ) (4 ) Impairments and allowance for credit losses 3 (4 ) Total $ 17 $ (1 ) |
Equity Securities | |
Net Recognized Gains (Losses) on Investments | Net recognized gains (losses) on equity investments were as follows: (In millions) Three Months Ended September 30, 2020 2019 Net realized gains on investments sold $ 17 $ 22 Net unrealized gains (losses) on investments still held 100 (56 ) Impairments of investments (9 ) (22 ) Total $ 108 $ (56 ) |
INVESTMENTS (Tables)
INVESTMENTS (Tables) | 3 Months Ended |
Sep. 30, 2020 | |
Investments Debt And Equity Securities [Abstract] | |
Investment Components | The components of investments were as follows: (In millions) Fair Value Adjusted Cost Basis Unrealized Gains Unrealized Losses Recorded Basis Cash and Cash Equivalents Short-term Investments Equity Investments September 30, 2020 Changes in Fair Value Recorded in Other Comprehensive Income Commercial paper Level 2 $ 5,128 $ 0 $ 0 $ 5,128 $ 2,869 $ 2,259 $ 0 Certificates of deposit Level 2 2,674 0 0 2,674 1,781 893 0 U.S. government securities Level 1 93,143 6,230 0 99,373 4,556 94,817 0 U.S. agency securities Level 2 3,339 3 0 3,342 1,550 1,792 0 Foreign government bonds Level 2 7,054 7 (3 ) 7,058 0 7,058 0 Mortgage- and asset-backed securities Level 2 4,764 42 (4 ) 4,802 0 4,802 0 Corporate notes and bonds Level 2 8,287 332 (5 ) 8,614 0 8,614 0 Corporate notes and bonds Level 3 52 0 0 52 0 52 0 Municipal securities Level 2 312 60 (3 ) 369 0 369 0 Municipal securities Level 3 95 0 (7 ) 88 0 88 0 Total debt investments $ 124,848 $ 6,674 $ (22 ) $ 131,500 $ 10,756 $ 120,744 $ 0 Changes in Fair Value Recorded in Net Income Equity investments Level 1 $ 1,170 $ 724 $ 0 $ 446 Equity investments Other 2,657 0 0 2,657 Total equity investments $ 3,827 $ 724 $ 0 $ 3,103 Cash $ 5,725 $ 5,725 $ 0 $ 0 Derivatives, net (a) 28 0 28 0 Total $ 141,080 $ 17,205 $ 120,772 $ 3,103 (In millions) Fair Value Adjusted Cost Basis Unrealized Gains Unrealized Losses Recorded Basis Cash and Cash Equivalents Short-term Investments Equity Investments June 30, 2020 Changes in Fair Value Recorded in Other Comprehensive Income Commercial paper Level 2 $ 4,687 $ 1 $ 0 $ 4,688 $ 1,618 $ 3,070 $ 0 Certificates of deposit Level 2 2,898 0 0 2,898 1,646 1,252 0 U.S. government securities Level 1 92,067 6,495 (1 ) 98,561 3,168 95,393 0 U.S. agency securities Level 2 2,439 2 0 2,441 449 1,992 0 Foreign government bonds Level 2 6,982 6 (3 ) 6,985 1 6,984 0 Mortgage- and asset-backed securities Level 2 4,865 41 (6 ) 4,900 0 4,900 0 Corporate notes and bonds Level 2 8,500 327 (17 ) 8,810 0 8,810 0 Corporate notes and bonds Level 3 58 0 0 58 0 58 0 Municipal securities Level 2 313 57 (4 ) 366 0 366 0 Municipal securities Level 3 91 0 0 91 0 91 0 Total debt investments $ 122,900 $ 6,929 $ (31 ) $ 129,798 $ 6,882 $ 122,916 $ 0 Changes in Fair Value Recorded in Net Income Equity investments Level 1 $ 1,198 $ 784 $ 0 $ 414 Equity investments Other 2,551 0 0 2,551 Total equity investments $ 3,749 $ 784 $ 0 $ 2,965 Cash $ 5,910 $ 5,910 $ 0 $ 0 Derivatives, net (a) 35 0 35 0 Total $ 139,492 $ 13,576 $ 122,951 $ 2,965 ( a ) Refer to Note 5 – Derivatives for further information on the fair value of our derivative instruments. |
Unrealized Losses on Debt Investments | Debt investments with continuous unrealized losses for less than 12 months and 12 months or greater and their related fair values were as follows: Less than 12 Months 12 Months or Greater Total (In millions) Fair Value Unrealized Fair Value Unrealized Total September 30, 2020 U.S. government and agency securities $ 1,847 $ 0 $ 0 $ 0 $ 1,847 $ 0 Foreign government bonds 977 (3 ) 0 0 977 (3 ) Mortgage- and asset-backed securities 832 (4 ) 0 0 832 (4 ) Corporate notes and bonds 421 (5 ) 0 0 421 (5 ) Municipal securities 119 (10 ) 0 0 119 (10 ) Total $ 4,196 $ (22 ) $ 0 $ 0 $ 4,196 $ (22 ) Less than 12 Months 12 Months or Greater Total (In millions) Fair Value Unrealized Fair Value Unrealized Total June 30, 2020 U.S. government and agency securities $ 2,323 $ (1 ) $ 0 $ 0 $ 2,323 $ (1 ) Foreign government bonds 500 (3 ) 0 0 500 (3 ) Mortgage- and asset-backed securities 1,014 (6 ) 0 0 1,014 (6 ) Corporate notes and bonds 649 (17 ) 0 0 649 (17 ) Municipal securities 66 (4 ) 0 0 66 (4 ) Total $ 4,552 $ (31 ) $ 0 $ 0 $ 4,552 $ (31 ) |
Debt Investment Maturities | Debt Investment Maturities (In millions) Adjusted Cost Basis Estimated Fair Value September 30, 2020 Due in one year or less $ 35,327 $ 35,397 Due after one year through five years 55,735 59,048 Due after five years through 10 years 30,786 33,870 Due after 10 years 3,000 3,185 Total $ 124,848 $ 131,500 |
DERIVATIVES (Tables)
DERIVATIVES (Tables) | 3 Months Ended |
Sep. 30, 2020 | |
Notional Amounts of Outstanding Derivative Instruments Measured in U.S. Dollar Equivalents | The following table presents the notional amounts of our outstanding derivative instruments measured in U.S. dollar equivalents: (In millions) September 30, 2020 June 30, 2020 Designated as Hedging Instruments Foreign exchange contracts purchased $ 635 $ 635 Foreign exchange contracts sold 6,844 6,754 Interest rate contracts purchased 1,292 1,295 Not Designated as Hedging Instruments Foreign exchange contracts purchased 11,935 11,896 Foreign exchange contracts sold 10,903 15,595 Other contracts purchased 2,202 1,844 Other contracts sold 749 757 |
Fair Values of Derivative Instruments | The following table presents our derivative instruments: Derivative Derivative Derivative Derivative (In millions) Assets Liabilities Assets Liabilities September 30, 2020 June 30, 2020 Designated as Hedging Instruments Foreign exchange contracts $ 16 $ (67 ) $ 44 $ (54 ) Interest rate contracts 89 0 93 0 Not Designated as Hedging Instruments Foreign exchange contracts 165 (247 ) 245 (334 ) Other contracts 6 (27 ) 18 (11 ) Gross amounts of derivatives 276 (341 ) 400 (399 ) Gross amounts of derivatives offset in the balance sheet (74 ) 76 (154 ) 158 Cash collateral received 0 (58 ) 0 (154 ) Net amounts of derivatives $ 202 $ (323 ) $ 246 $ (395 ) Reported as Short-term investments $ 28 $ 0 $ 35 $ 0 Other current assets 81 0 199 0 Other long-term assets 93 0 12 0 Other current liabilities 0 (232 ) 0 (334 ) Other long-term liabilities 0 (91 ) 0 (61 ) Total $ 202 $ (323 ) $ 246 $ (395 ) The following table presents the fair value of our derivatives instruments on a gross basis: (In millions) Level 1 Level 2 Level 3 Total September 30, 2020 Derivative assets $ 0 $ 275 $ 1 $ 276 Derivative liabilities 0 (341 ) 0 (341 ) June 30, 2020 Derivative assets 1 398 1 400 Derivative liabilities 0 (399 ) 0 (399 ) |
Gains (Losses) on Derivative Instruments | Gains (losses) on derivative instruments recognized in our consolidated income statements were as follows: (In millions) Revenue Other Income (Expense), Net Revenue Other Income (Expense), Net Three Months Ended September 30, 2020 2019 Designated as Fair Value Hedging Instruments Foreign exchange contracts Derivatives $ 0 $ (169 ) $ 0 $ 30 Hedged items 0 168 0 (33 ) Excluded from effectiveness assessment 0 8 0 41 Interest rate contracts Derivatives 0 0 0 1 Hedged items 0 4 0 (1 ) Designated as Cash Flow Hedging Instruments Foreign exchange contracts Amount reclassified from accumulated other comprehensive income 0 20 0 (5 ) Excluded from effectiveness assessment 0 0 0 0 Not Designated as Hedging Instruments Foreign exchange contracts 0 58 0 (171 ) Other contracts 0 4 0 1 |
Cash Flow Hedges | Other Comprehensive Income | |
Gains (Losses) on Derivative Instruments | Gains (losses), net of tax, on derivative instruments recognized in our consolidated comprehensive income statements were as follows: (In millions) Three Months Ended September 30, 2020 2019 Designated as Cash Flow Hedging Instruments Foreign exchange contracts Included in effectiveness assessment $ 20 $ (6 ) |
INVENTORIES (Tables)
INVENTORIES (Tables) | 3 Months Ended |
Sep. 30, 2020 | |
Inventory Disclosure [Abstract] | |
Components of Inventories | The components of inventories were as follows: (In millions) September 30, 2020 June 30, 2020 Raw materials $ 796 $ 700 Work in process 83 83 Finished goods 1,826 1,112 Total $ 2,705 $ 1,895 |
GOODWILL (Tables)
GOODWILL (Tables) | 3 Months Ended |
Sep. 30, 2020 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Carrying Amount of Goodwill | Changes in the carrying amount of goodwill were as follows: (In millions) June 30, 2020 Acquisitions Other September 30, 2020 Productivity and Business Processes $ 24,190 $ 0 $ 33 $ 24,223 Intelligent Cloud 12,697 443 1 13,141 More Personal Computing 6,464 0 62 6,526 Total $ 43,351 $ 443 $ 96 $ 43,890 |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 3 Months Ended |
Sep. 30, 2020 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Finite-Lived Intangible Assets | The components of intangible assets, all of which are finite-lived, were as follows: (In millions) Gross Accumulated Net Gross Accumulated Net September 30, 2020 June 30, 2020 Technology-based $ 8,327 $ (6,527 ) $ 1,800 $ 8,160 $ (6,381 ) $ 1,779 Customer-related 5,066 (2,482 ) 2,584 4,967 (2,320 ) 2,647 Marketing-related 4,159 (1,655 ) 2,504 4,158 (1,588 ) 2,570 Contract-based 475 (440 ) 35 474 (432 ) 42 Total $ 18,027 $ (11,104 ) $ 6,923 $ 17,759 $ (10,721 ) $ 7,038 |
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, 2020: (In millions) Year Ending June 30, 2021 (excluding the three months ended September 30, 2020) $ 1,150 2022 1,461 2023 1,267 2024 904 2025 487 Thereafter 1,654 Total $ 6,923 |
DEBT (Tables)
DEBT (Tables) | 3 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Debt | The components of debt were as follows: (In millions, issuance by calendar year) Maturities (calendar year) Stated Interest Rate Effective Interest Rate September 30 , 2020 June 30, 2020 2009 issuance of $3.8 billion (a) 2039 5.20% 5.24% $ 559 $ 559 2010 issuance of $4.8 billion (a) 2020 – 2040 3.00% – 4.50% 3.14% – 4.57% 1,571 1,571 2011 issuance of $2.3 billion (a) 2021 – 2041 4.00% – 5.30% 4.08% – 5.36% 1,270 1,270 2012 issuance of $2.3 billion 2022 – 2042 2.13% – 3.50% 2.24% – 3.57% 1,650 1,650 2013 issuance of $5.2 billion (a) 2023 – 2043 2.38% – 4.88% 2.47% – 4.92% 2,919 2,919 2013 issuance of €4.1 billion 2021 – 2033 2.13% – 3.13% 2.23% – 3.22% 4,748 4,549 2015 issuance of $23.8 billion (a) 2020 – 2055 2.00% – 4.75% 2.09% – 4.78% 15,549 15,549 2016 issuance of $19.8 billion (a) 2021 – 2056 1.55% – 3.95% 1.64% – 4.03% 16,955 16,955 2017 issuance of $17.0 billion (a) 2022 – 2057 2.40% – 4.50% 2.52% – 4.53% 12,385 12,385 2020 issuance of $10.0 billion (a) 2050 – 2060 2.53% – 2.68% 2.53% – 2.68% 10,000 10,000 Total face value 67,606 67,407 Unamortized discount and issuance costs (542 ) (554 ) Hedge fair value adjustments (b) 89 93 Premium on debt exchange (a) (3,601 ) (3,619 ) Total debt 63,552 63,327 Current portion of long-term debt (6,497 ) (3,749 ) Long-term debt $ 57,055 $ 59,578 (a) In June 2020, we exchanged a portion of our existing debt at premium for cash and new debt with longer maturities. The premium will be amortized over the term of the new debt. (b ) Refer to Note 5 – Derivatives for further information on the interest rate swaps related to fixed-rate debt. |
Maturities of Long-term Debt Including Current Portion | The following table outlines maturities of our long-term debt , including the current portion, September 30 (In millions) Year Ending June 30, 2021 (excluding the three months ended September 30, 2020) $ 3,750 2022 8,052 2023 2,750 2024 5,250 2025 2,250 Thereafter 45,554 Total $ 67,606 |
UNEARNED REVENUE (Tables)
UNEARNED REVENUE (Tables) | 3 Months Ended |
Sep. 30, 2020 | |
Revenue From Contract With Customer [Abstract] | |
Unearned Revenue by Segment | Unearned revenue by segment was as follows: (In millions) September 30, June 30, Productivity and Business Processes $ 17,675 $ 18,643 Intelligent Cloud 15,039 16,620 More Personal Computing 3,591 3,917 Total $ 36,305 $ 39,180 |
Changes in Unearned Revenue | Changes in unearned revenue were as follows: (In millions) Three Months Ended September 30, 2020 Balance, beginning of period $ 39,180 Deferral of revenue 17,976 Recognition of unearned revenue (20,851 ) Balance, end of period $ 36,305 |
LEASES (Tables)
LEASES (Tables) | 3 Months Ended |
Sep. 30, 2020 | |
Leases [Abstract] | |
Components of Lease Expense | The components of lease expense were as follows: (In millions) Three Months Ended September 30, 2020 2019 Operating lease cost $ 498 $ 465 Finance lease cost: Amortization of right-of-use assets $ 206 $ 125 Interest on lease liabilities 92 78 Total finance lease cost $ 298 $ 203 |
Supplemental Cash Flow Information Related to Leases | Supplemental cash flow information related to leases was as follows: (In millions) Three Months Ended September 30, 2020 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 491 $ 453 Operating cash flows from finance leases 92 78 Financing cash flows from finance leases 136 79 Right-of-use assets obtained in exchange for lease obligations: Operating leases 678 983 Finance leases 635 1,489 |
Supplemental Balance Sheet Information Related to Leases | Supplemental balance sheet information related to leases was as follows: (In millions, except lease term and discount rate) September 30, 2020 June 30, Operating Leases Operating lease right-of-use assets $ 9,047 $ 8,753 Other current liabilities $ 1,744 $ 1,616 Operating lease liabilities 7,753 7,671 Total operating lease liabilities $ 9,497 $ 9,287 Finance Leases Property and equipment, at cost $ 11,174 $ 10,371 Accumulated depreciation (1,591 ) (1,385 ) Property and equipment, net $ 9,583 $ 8,986 Other current liabilities $ 596 $ 540 Other long-term liabilities 9,571 8,956 Total finance lease liabilities $ 10,167 $ 9,496 Weighted Average Remaining Lease Term Operating leases 7 years 8 years Finance leases 12 years 13 years Weighted Average Discount Rate Operating leases 2.6% 2.7% Finance leases 3.8% 3.9% |
Maturities of Lease Liabilities | Maturities of lease liabilities were as follows: (In millions) Year Ending June 30, Operating Leases Finance Leases 2021 (excluding the three months ended September 30, 2020) $ 1,522 $ 709 2022 1,738 958 2023 1,566 968 2024 1,362 982 2025 1,090 1,304 Thereafter 3,513 7,805 Total lease payments 10,791 12,726 Less imputed interest (1,294 ) (2,559 ) Total $ 9,497 $ 10,167 |
STOCKHOLDERS' EQUITY (Tables)
STOCKHOLDERS' EQUITY (Tables) | 3 Months Ended |
Sep. 30, 2020 | |
Equity [Abstract] | |
Share Repurchases | We repurchased the following shares of common stock under the share repurchase program: (In millions) Shares Amount Shares Amount Fiscal Year 2021 2020 First Quarter 25 $ 5,270 29 $ 4,000 |
Dividends Declared | Our Board of Directors declared the following dividends: Declaration Date Record Date Payment Date Dividend Per Share Amount Fiscal Year 2021 (In millions) September 15, 2020 November 19, 2020 December 10, 2020 $ 0.56 $ 4,236 Fiscal Year 2020 September 18, 2019 November 21, 2019 December 12, 2019 $ 0.51 $ 3,886 |
ACCUMULATED OTHER COMPREHENSI_2
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Tables) | 3 Months Ended |
Sep. 30, 2020 | |
Equity [Abstract] | |
Summary of Changes in Accumulated Other Comprehensive Income (Loss) by Component | The following table summarizes the changes in accumulated other comprehensive income (loss) by component: (In millions) Three Months Ended September 30, 2020 2019 Derivatives Balance, beginning of period $ (38 ) $ 0 Unrealized gains (losses), net of tax of $5 20 (6 ) Reclassification adjustments for (gains) losses included in earnings (20 ) 5 Tax expense (benefit) included in provision for income taxes 4 (1 ) Amounts reclassified from accumulated other comprehensive income (loss) (16 ) 4 Net change related to derivatives, net of tax of $1 4 (2 ) Balance, end of period $ (34 ) $ (2 ) Investments Balance, beginning of period $ 5,478 $ 1,488 Unrealized gains (losses), net of tax of $(50) (188 ) 576 Reclassification adjustments for (gains) losses included in other income (expense), net (17 ) 1 Tax expense included in provision for income taxes 4 0 Amounts reclassified from accumulated other comprehensive income (loss) (13 ) 1 Net change related to investments, net of tax of $(54) (201 ) 577 Cumulative effect of accounting changes 10 0 Balance, end of period $ 5,287 $ 2,065 Translation Adjustments and Other Balance, beginning of period $ (2,254 ) $ (1,828 ) Translation adjustments and other, net of tax of $(9) 111 (296 ) Balance, end of period $ (2,143 ) $ (2,124 ) Accumulated other comprehensive income (loss), end of period $ 3,110 $ (61 ) |
SEGMENT INFORMATION AND GEOGR_2
SEGMENT INFORMATION AND GEOGRAPHIC DATA (Tables) | 3 Months Ended |
Sep. 30, 2020 | |
Segment Reporting [Abstract] | |
Segment Revenue | Segment revenue and operating income were as follows during the periods presented: (In millions) Three Months Ended September 30, 2020 2019 Revenue Productivity and Business Processes $ 12,319 $ 11,077 Intelligent Cloud 12,986 10,845 More Personal Computing 11,849 11,133 Total $ 37,154 $ 33,055 Operating Income Productivity and Business Processes $ 5,706 $ 4,782 Intelligent Cloud 5,422 3,889 More Personal Computing 4,748 4,015 Total $ 15,876 $ 12,686 |
Segment Operating Income (Loss) | Segment revenue and operating income were as follows during the periods presented: (In millions) Three Months Ended September 30, 2020 2019 Revenue Productivity and Business Processes $ 12,319 $ 11,077 Intelligent Cloud 12,986 10,845 More Personal Computing 11,849 11,133 Total $ 37,154 $ 33,055 Operating Income Productivity and Business Processes $ 5,706 $ 4,782 Intelligent Cloud 5,422 3,889 More Personal Computing 4,748 4,015 Total $ 15,876 $ 12,686 |
Revenue Classified by Major Geographic Areas | Revenue, classified by the major geographic areas in which our customers were located, was as follows: (In millions) Three Months Ended September 30, 2020 2019 United States (a) $ 19,025 $ 17,270 Other countries 18,129 15,785 Total $ 37,154 $ 33,055 (a) Includes billings to OEMs and certain multinational organizations because of the nature of these businesses and the impracticability of determining the geographic source of the revenue. |
Revenue Classified by Significant Product and Service Offerings | Revenue from external customers, classified by significant product and service offerings, was as follows: (In millions) Three Months Ended September 30, 2020 2019 Server products and cloud services $ 11,195 $ 9,192 Office products and cloud services 9,278 8,466 Windows 5,305 5,353 Gaming 3,092 2,542 2,206 1,909 Search advertising 1,789 1,991 Enterprise Services 1,637 1,545 Devices 1,620 1,202 Other 1,032 855 Total $ 37,154 $ 33,055 Our commercial cloud revenue, which includes Office 365 Commercial, Azure, the commercial portion of LinkedIn, Dynamics 365, and other commercial cloud properties, was $15.2 billion and $11.6 billion for the three months ended September 30, 2020 and 2019, respectively. These amounts are primarily included in Office products and cloud services, Server products and cloud services, and LinkedIn in the table above. |
Accounting Policies - Additiona
Accounting Policies - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Millions | Jul. 01, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | Jun. 30, 2020 |
Significant Accounting Policies [Line Items] | ||||
Operating income | $ 15,876 | $ 12,686 | ||
Net income | $ 13,893 | $ 10,678 | ||
Income per basic share | $ 1.84 | $ 1.40 | ||
Income per diluted share | $ 1.82 | $ 1.38 | ||
Other receivables due from suppliers | $ 1,100 | $ 442 | ||
Long-term accounts receivable, net of allowance for doubtful accounts | 2,700 | 2,700 | ||
Financing receivables, net | 4,800 | $ 5,200 | ||
Service Life | ||||
Significant Accounting Policies [Line Items] | ||||
Operating income | 927 | |||
Net income | $ 763 | |||
Income per basic share | $ 0.10 | |||
Income per diluted share | $ 0.10 | |||
Server Equipment | Service Life | ||||
Significant Accounting Policies [Line Items] | ||||
Estimated useful lives | 4 years | 3 years | ||
Network Equipment | Service Life | ||||
Significant Accounting Policies [Line Items] | ||||
Estimated useful lives | 4 years | 2 years |
Basic and Diluted Earnings Per
Basic and Diluted Earnings Per Share (Detail) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Earnings Per Share Basic And Diluted [Abstract] | ||
Net income available for common shareholders (A) | $ 13,893 | $ 10,678 |
Weighted average outstanding shares of common stock (B) | 7,566 | 7,634 |
Dilutive effect of stock-based awards | 71 | 76 |
Common stock and common stock equivalents (C) | 7,637 | 7,710 |
Earnings Per Share | ||
Basic (A/B) | $ 1.84 | $ 1.40 |
Diluted (A/C) | $ 1.82 | $ 1.38 |
Components of Other Income (Exp
Components of Other Income (Expense), Net (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Other Income And Expenses [Abstract] | ||
Interest and dividends income | $ 570 | $ 724 |
Interest expense | (589) | (637) |
Net recognized gains (losses) on investments | 125 | (57) |
Net gains on derivatives | 3 | 46 |
Net gains (losses) on foreign currency remeasurements | 139 | (58) |
Other, net | 0 | (18) |
Total | $ 248 | $ 0 |
Net Recognized Gains (Losses) o
Net Recognized Gains (Losses) on Debt Investments (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Schedule Of Gain Loss On Investments Including Marketable Securities And Investments Held At Cost Income Statement Reported Amounts Summary [Line Items] | ||
Realized gains from sales of available-for-sale securities | $ 19 | $ 7 |
Realized losses from sales of available-for-sale securities | (5) | (4) |
Total | 125 | (57) |
Debt Securities | ||
Schedule Of Gain Loss On Investments Including Marketable Securities And Investments Held At Cost Income Statement Reported Amounts Summary [Line Items] | ||
Impairments and allowance for credit losses | 3 | (4) |
Total | $ 17 | $ (1) |
Net Recognized Gains (Losses)_2
Net Recognized Gains (Losses) on Equity Investments (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Schedule Of Gain Loss On Investments Including Marketable Securities And Investments Held At Cost Income Statement Reported Amounts Summary [Line Items] | ||
Net realized gains on investments sold | $ 17 | $ 22 |
Net unrealized gains (losses) on investments still held | 100 | (56) |
Total | 125 | (57) |
Equity Securities | ||
Schedule Of Gain Loss On Investments Including Marketable Securities And Investments Held At Cost Income Statement Reported Amounts Summary [Line Items] | ||
Impairments of investments | (9) | (22) |
Total | $ 108 | $ (56) |
Investment Components (Detail)
Investment Components (Detail) - USD ($) $ in Millions | Sep. 30, 2020 | Jun. 30, 2020 | |
Cash, Cash Equivalents and Investments [Line Items] | |||
Debt investments, Adjusted Cost Basis | $ 124,848 | ||
Debt investments, Recorded Basis | 131,500 | ||
Derivative, net | 202 | $ 246 | |
Cash and cash equivalents | 17,205 | 13,576 | |
Short-term Investments | 120,772 | 122,951 | |
Equity Investments | 3,103 | 2,965 | |
Cash, cash equivalents, and investments | 141,080 | 139,492 | |
Equity investments | |||
Cash, Cash Equivalents and Investments [Line Items] | |||
Equity investments, Recorded Basis | 3,827 | 3,749 | |
Cash and cash equivalents | 724 | 784 | |
Short-term Investments | 0 | 0 | |
Equity Investments | 3,103 | 2,965 | |
Equity investments | Other | |||
Cash, Cash Equivalents and Investments [Line Items] | |||
Equity investments, Recorded Basis | 2,657 | 2,551 | |
Cash and cash equivalents | 0 | 0 | |
Short-term Investments | 0 | 0 | |
Equity Investments | 2,657 | 2,551 | |
Equity investments | Level 1 | |||
Cash, Cash Equivalents and Investments [Line Items] | |||
Equity investments, Recorded Basis | 1,170 | 1,198 | |
Cash and cash equivalents | 724 | 784 | |
Short-term Investments | 0 | 0 | |
Equity Investments | 446 | 414 | |
Cash | |||
Cash, Cash Equivalents and Investments [Line Items] | |||
Cash | 5,725 | 5,910 | |
Cash and cash equivalents | 5,725 | 5,910 | |
Short-term Investments | 0 | 0 | |
Equity Investments | 0 | 0 | |
Derivatives, net | |||
Cash, Cash Equivalents and Investments [Line Items] | |||
Derivative, net | [1] | 28 | 35 |
Cash and cash equivalents | [1] | 0 | 0 |
Short-term Investments | [1] | 28 | 35 |
Equity Investments | [1] | 0 | 0 |
Debt investments | |||
Cash, Cash Equivalents and Investments [Line Items] | |||
Debt investments, Adjusted Cost Basis | 124,848 | 122,900 | |
Debt investments, Unrealized Gains | 6,674 | 6,929 | |
Debt investments, Unrealized Losses | (22) | (31) | |
Debt investments, Recorded Basis | 131,500 | 129,798 | |
Cash and cash equivalents | 10,756 | 6,882 | |
Short-term Investments | 120,744 | 122,916 | |
Equity Investments | 0 | 0 | |
Debt investments | Commercial Paper | Level 2 | |||
Cash, Cash Equivalents and Investments [Line Items] | |||
Debt investments, Adjusted Cost Basis | 5,128 | 4,687 | |
Debt investments, Unrealized Gains | 0 | 1 | |
Debt investments, Unrealized Losses | 0 | 0 | |
Debt investments, Recorded Basis | 5,128 | 4,688 | |
Cash and cash equivalents | 2,869 | 1,618 | |
Short-term Investments | 2,259 | 3,070 | |
Equity Investments | 0 | 0 | |
Debt investments | Certificates of deposit | Level 2 | |||
Cash, Cash Equivalents and Investments [Line Items] | |||
Debt investments, Adjusted Cost Basis | 2,674 | 2,898 | |
Debt investments, Unrealized Gains | 0 | 0 | |
Debt investments, Unrealized Losses | 0 | 0 | |
Debt investments, Recorded Basis | 2,674 | 2,898 | |
Cash and cash equivalents | 1,781 | 1,646 | |
Short-term Investments | 893 | 1,252 | |
Equity Investments | 0 | 0 | |
Debt investments | U.S. government securities | Level 1 | |||
Cash, Cash Equivalents and Investments [Line Items] | |||
Debt investments, Adjusted Cost Basis | 93,143 | 92,067 | |
Debt investments, Unrealized Gains | 6,230 | 6,495 | |
Debt investments, Unrealized Losses | 0 | (1) | |
Debt investments, Recorded Basis | 99,373 | 98,561 | |
Cash and cash equivalents | 4,556 | 3,168 | |
Short-term Investments | 94,817 | 95,393 | |
Equity Investments | 0 | 0 | |
Debt investments | U.S. agency securities | Level 2 | |||
Cash, Cash Equivalents and Investments [Line Items] | |||
Debt investments, Adjusted Cost Basis | 3,339 | 2,439 | |
Debt investments, Unrealized Gains | 3 | 2 | |
Debt investments, Unrealized Losses | 0 | 0 | |
Debt investments, Recorded Basis | 3,342 | 2,441 | |
Cash and cash equivalents | 1,550 | 449 | |
Short-term Investments | 1,792 | 1,992 | |
Equity Investments | 0 | 0 | |
Debt investments | Foreign government bonds | Level 2 | |||
Cash, Cash Equivalents and Investments [Line Items] | |||
Debt investments, Adjusted Cost Basis | 7,054 | 6,982 | |
Debt investments, Unrealized Gains | 7 | 6 | |
Debt investments, Unrealized Losses | (3) | (3) | |
Debt investments, Recorded Basis | 7,058 | 6,985 | |
Cash and cash equivalents | 0 | 1 | |
Short-term Investments | 7,058 | 6,984 | |
Equity Investments | 0 | 0 | |
Debt investments | Mortgage- and asset-backed securities | Level 2 | |||
Cash, Cash Equivalents and Investments [Line Items] | |||
Debt investments, Adjusted Cost Basis | 4,764 | 4,865 | |
Debt investments, Unrealized Gains | 42 | 41 | |
Debt investments, Unrealized Losses | (4) | (6) | |
Debt investments, Recorded Basis | 4,802 | 4,900 | |
Cash and cash equivalents | 0 | 0 | |
Short-term Investments | 4,802 | 4,900 | |
Equity Investments | 0 | 0 | |
Debt investments | Corporate notes and bonds | Level 2 | |||
Cash, Cash Equivalents and Investments [Line Items] | |||
Debt investments, Adjusted Cost Basis | 8,287 | 8,500 | |
Debt investments, Unrealized Gains | 332 | 327 | |
Debt investments, Unrealized Losses | (5) | (17) | |
Debt investments, Recorded Basis | 8,614 | 8,810 | |
Cash and cash equivalents | 0 | 0 | |
Short-term Investments | 8,614 | 8,810 | |
Equity Investments | 0 | 0 | |
Debt investments | Corporate notes and bonds | Level 3 | |||
Cash, Cash Equivalents and Investments [Line Items] | |||
Debt investments, Adjusted Cost Basis | 52 | 58 | |
Debt investments, Unrealized Gains | 0 | 0 | |
Debt investments, Unrealized Losses | 0 | 0 | |
Debt investments, Recorded Basis | 52 | 58 | |
Cash and cash equivalents | 0 | 0 | |
Short-term Investments | 52 | 58 | |
Equity Investments | 0 | 0 | |
Debt investments | Municipal securities | Level 2 | |||
Cash, Cash Equivalents and Investments [Line Items] | |||
Debt investments, Adjusted Cost Basis | 312 | 313 | |
Debt investments, Unrealized Gains | 60 | 57 | |
Debt investments, Unrealized Losses | (3) | (4) | |
Debt investments, Recorded Basis | 369 | 366 | |
Cash and cash equivalents | 0 | 0 | |
Short-term Investments | 369 | 366 | |
Equity Investments | 0 | 0 | |
Debt investments | Municipal securities | Level 3 | |||
Cash, Cash Equivalents and Investments [Line Items] | |||
Debt investments, Adjusted Cost Basis | 95 | 91 | |
Debt investments, Unrealized Gains | 0 | 0 | |
Debt investments, Unrealized Losses | (7) | 0 | |
Debt investments, Recorded Basis | 88 | 91 | |
Cash and cash equivalents | 0 | 0 | |
Short-term Investments | 88 | 91 | |
Equity Investments | $ 0 | $ 0 | |
[1] | Refer to Note 5 – Derivatives for further information on the fair value of our derivative instruments. |
Investments - Additional Inform
Investments - Additional Information (Detail) - USD ($) $ in Billions | Sep. 30, 2020 | Jun. 30, 2020 |
Investments Debt And Equity Securities [Abstract] | ||
Equity investments without readily determinable fair values measured at cost with adjustments for observable changes in price or impairments | $ 1.4 | $ 1.4 |
Unrealized Losses on Debt Inves
Unrealized Losses on Debt Investments (Detail) - USD ($) $ in Millions | Sep. 30, 2020 | Jun. 30, 2020 |
Unrealized Losses on Investments [Line Items] | ||
Less than 12 Months - Fair Value | $ 4,196 | $ 4,552 |
Less than 12 Months - Unrealized Losses | (22) | (31) |
12 Months or Greater - Fair Value | 0 | 0 |
12 Months or Greater - Unrealized Losses | 0 | 0 |
Total Fair Value | 4,196 | 4,552 |
Total Unrealized Losses | (22) | (31) |
U.S. government and agency securities | ||
Unrealized Losses on Investments [Line Items] | ||
Less than 12 Months - Fair Value | 1,847 | 2,323 |
Less than 12 Months - Unrealized Losses | 0 | (1) |
12 Months or Greater - Fair Value | 0 | 0 |
12 Months or Greater - Unrealized Losses | 0 | 0 |
Total Fair Value | 1,847 | 2,323 |
Total Unrealized Losses | 0 | (1) |
Foreign government bonds | ||
Unrealized Losses on Investments [Line Items] | ||
Less than 12 Months - Fair Value | 977 | 500 |
Less than 12 Months - Unrealized Losses | (3) | (3) |
12 Months or Greater - Fair Value | 0 | 0 |
12 Months or Greater - Unrealized Losses | 0 | 0 |
Total Fair Value | 977 | 500 |
Total Unrealized Losses | (3) | (3) |
Mortgage- and asset-backed securities | ||
Unrealized Losses on Investments [Line Items] | ||
Less than 12 Months - Fair Value | 832 | 1,014 |
Less than 12 Months - Unrealized Losses | (4) | (6) |
12 Months or Greater - Fair Value | 0 | 0 |
12 Months or Greater - Unrealized Losses | 0 | 0 |
Total Fair Value | 832 | 1,014 |
Total Unrealized Losses | (4) | (6) |
Corporate notes and bonds | ||
Unrealized Losses on Investments [Line Items] | ||
Less than 12 Months - Fair Value | 421 | 649 |
Less than 12 Months - Unrealized Losses | (5) | (17) |
12 Months or Greater - Fair Value | 0 | 0 |
12 Months or Greater - Unrealized Losses | 0 | 0 |
Total Fair Value | 421 | 649 |
Total Unrealized Losses | (5) | (17) |
Municipal securities | ||
Unrealized Losses on Investments [Line Items] | ||
Less than 12 Months - Fair Value | 119 | 66 |
Less than 12 Months - Unrealized Losses | (10) | (4) |
12 Months or Greater - Fair Value | 0 | 0 |
12 Months or Greater - Unrealized Losses | 0 | 0 |
Total Fair Value | 119 | 66 |
Total Unrealized Losses | $ (10) | $ (4) |
Debt Investment Maturities (Det
Debt Investment Maturities (Detail) $ in Millions | Sep. 30, 2020USD ($) |
Adjusted Cost Basis | |
Due in one year or less | $ 35,327 |
Due after one year through five years | 55,735 |
Due after five years through 10 years | 30,786 |
Due after 10 years | 3,000 |
Debt investments, Adjusted Cost Basis | 124,848 |
Estimated Fair Value | |
Due in one year or less | 35,397 |
Due after one year through five years | 59,048 |
Due after five years through 10 years | 33,870 |
Due after 10 years | 3,185 |
Total | $ 131,500 |
Derivatives - Additional Inform
Derivatives - Additional Information (Detail) - USD ($) | 3 Months Ended | |
Sep. 30, 2020 | Jun. 30, 2020 | |
Derivative [Line Items] | ||
Minimum required liquidity under certain counterparty agreements | $ 1,000,000,000 | |
Minimum liquidity for the period as defined by certain counterparty agreements | 1,000,000,000 | |
Gross amounts of derivative assets, elected to offset | 274,000,000 | $ 399,000,000 |
Gross amounts of derivative liabilities, elected to offset | $ 340,000,000 | $ 399,000,000 |
Senior Unsecured Obligations | ||
Derivative [Line Items] | ||
Debt instrument credit rating | AAA |
Notional Amounts of Outstanding
Notional Amounts of Outstanding Derivative Instruments Measured in U.S. Dollar Equivalents (Detail) - USD ($) $ in Millions | Sep. 30, 2020 | Jun. 30, 2020 |
Designated as Hedging Instruments | Foreign Exchange Contracts | Derivatives Purchased | ||
Derivative [Line Items] | ||
Notional amounts | $ 635 | $ 635 |
Designated as Hedging Instruments | Foreign Exchange Contracts | Derivatives Sold | ||
Derivative [Line Items] | ||
Notional amounts | 6,844 | 6,754 |
Designated as Hedging Instruments | Interest Rate Contracts | Derivatives Purchased | ||
Derivative [Line Items] | ||
Notional amounts | 1,292 | 1,295 |
Not Designated as Hedging Instruments | Foreign Exchange Contracts | Derivatives Purchased | ||
Derivative [Line Items] | ||
Notional amounts | 11,935 | 11,896 |
Not Designated as Hedging Instruments | Foreign Exchange Contracts | Derivatives Sold | ||
Derivative [Line Items] | ||
Notional amounts | 10,903 | 15,595 |
Not Designated as Hedging Instruments | Other Contracts | Derivatives Purchased | ||
Derivative [Line Items] | ||
Notional amounts | 2,202 | 1,844 |
Not Designated as Hedging Instruments | Other Contracts | Derivatives Sold | ||
Derivative [Line Items] | ||
Notional amounts | $ 749 | $ 757 |
Fair Values of Derivative Instr
Fair Values of Derivative Instruments (Detail) - USD ($) $ in Millions | Sep. 30, 2020 | Jun. 30, 2020 |
Derivatives Fair Value [Line Items] | ||
Derivative Assets | $ 276 | $ 400 |
Gross amounts of derivatives offset in the balance sheet, assets | (74) | (154) |
Cash collateral received, assets | 0 | 0 |
Net amounts of derivatives, assets | 202 | 246 |
Derivative Liabilities | (341) | (399) |
Gross amounts of derivatives offset in the balance sheet, liabilities | 76 | 158 |
Cash collateral received, liabilities | (58) | (154) |
Net amounts of derivatives, liabilities | (323) | (395) |
Level 1 | ||
Derivatives Fair Value [Line Items] | ||
Derivative Assets | 0 | 1 |
Derivative Liabilities | 0 | 0 |
Level 2 | ||
Derivatives Fair Value [Line Items] | ||
Derivative Assets | 275 | 398 |
Derivative Liabilities | (341) | (399) |
Level 3 | ||
Derivatives Fair Value [Line Items] | ||
Derivative Assets | 1 | 1 |
Derivative Liabilities | 0 | 0 |
Designated as Hedging Instruments | Foreign Exchange Contracts | ||
Derivatives Fair Value [Line Items] | ||
Derivative Assets | 16 | 44 |
Derivative Liabilities | (67) | (54) |
Designated as Hedging Instruments | Interest Rate Contracts | ||
Derivatives Fair Value [Line Items] | ||
Derivative Assets | 89 | 93 |
Derivative Liabilities | 0 | 0 |
Not Designated as Hedging Instruments | Foreign Exchange Contracts | ||
Derivatives Fair Value [Line Items] | ||
Derivative Assets | 165 | 245 |
Derivative Liabilities | (247) | (334) |
Not Designated as Hedging Instruments | Other Contracts | ||
Derivatives Fair Value [Line Items] | ||
Derivative Assets | 6 | 18 |
Derivative Liabilities | (27) | (11) |
Short-term Investments | ||
Derivatives Fair Value [Line Items] | ||
Net amounts of derivatives, assets | 28 | 35 |
Other Current Assets | ||
Derivatives Fair Value [Line Items] | ||
Net amounts of derivatives, assets | 81 | 199 |
Other Long-term Assets | ||
Derivatives Fair Value [Line Items] | ||
Net amounts of derivatives, assets | 93 | 12 |
Other Current Liabilities | ||
Derivatives Fair Value [Line Items] | ||
Net amounts of derivatives, liabilities | (232) | (334) |
Other Long-term Liabilities | ||
Derivatives Fair Value [Line Items] | ||
Net amounts of derivatives, liabilities | $ (91) | $ (61) |
Gains (Losses) on Derivative In
Gains (Losses) on Derivative Instruments Recognized on Consolidated Income Statements (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Revenue | Foreign Exchange Contracts | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gains (Losses) on Derivatives Not Designated as Hedges | $ 0 | $ 0 |
Revenue | Other Contracts | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gains (Losses) on Derivatives Not Designated as Hedges | 0 | 0 |
Other Income (Expense), Net | Foreign Exchange Contracts | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gains (Losses) on Derivatives Not Designated as Hedges | 58 | (171) |
Other Income (Expense), Net | Other Contracts | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gains (Losses) on Derivatives Not Designated as Hedges | 4 | 1 |
Fair Value Hedges | Revenue | Foreign Exchange Contracts | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivatives | 0 | 0 |
Hedged items | 0 | 0 |
Excluded from effectiveness assessment | 0 | 0 |
Fair Value Hedges | Revenue | Interest Rate Contracts | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivatives | 0 | 0 |
Hedged items | 0 | 0 |
Fair Value Hedges | Other Income (Expense), Net | Foreign Exchange Contracts | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivatives | (169) | 30 |
Hedged items | 168 | (33) |
Excluded from effectiveness assessment | 8 | 41 |
Fair Value Hedges | Other Income (Expense), Net | Interest Rate Contracts | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivatives | 0 | 1 |
Hedged items | 4 | (1) |
Cash Flow Hedges | Revenue | Foreign Exchange Contracts | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount reclassified from accumulated other comprehensive income | 0 | 0 |
Excluded from effectiveness assessment | 0 | 0 |
Cash Flow Hedges | Other Income (Expense), Net | Foreign Exchange Contracts | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount reclassified from accumulated other comprehensive income | 20 | (5) |
Excluded from effectiveness assessment | $ 0 | $ 0 |
Gains (Losses), Net of Tax, on
Gains (Losses), Net of Tax, on Derivative Instruments Recognized on Consolidated Comprehensive Income Statements (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Cash Flow Hedges | Foreign Exchange Contracts | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Included in effectiveness assessment | $ 20 | $ (6) |
Components of Inventories (Deta
Components of Inventories (Detail) - USD ($) $ in Millions | Sep. 30, 2020 | Jun. 30, 2020 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 796 | $ 700 |
Work in process | 83 | 83 |
Finished goods | 1,826 | 1,112 |
Total | $ 2,705 | $ 1,895 |
Business Combinations - Additio
Business Combinations - Additional Information (Detail) - ZeniMax Media Inc. $ in Billions | Sep. 19, 2020USD ($) |
Business Acquisition [Line Items] | |
Total purchase price to be transferred | $ 7.5 |
Acquisition agreement date | Sep. 19, 2020 |
Carrying Amount of Goodwill (De
Carrying Amount of Goodwill (Detail) $ in Millions | 3 Months Ended |
Sep. 30, 2020USD ($) | |
Goodwill [Line Items] | |
Beginning Balance | $ 43,351 |
Acquisitions | 443 |
Other | 96 |
Ending Balance | 43,890 |
Productivity and Business Processes | |
Goodwill [Line Items] | |
Beginning Balance | 24,190 |
Acquisitions | 0 |
Other | 33 |
Ending Balance | 24,223 |
Intelligent Cloud | |
Goodwill [Line Items] | |
Beginning Balance | 12,697 |
Acquisitions | 443 |
Other | 1 |
Ending Balance | 13,141 |
More Personal Computing | |
Goodwill [Line Items] | |
Beginning Balance | 6,464 |
Acquisitions | 0 |
Other | 62 |
Ending Balance | $ 6,526 |
Finite-Lived Intangible Assets
Finite-Lived Intangible Assets (Detail) - USD ($) $ in Millions | Sep. 30, 2020 | Jun. 30, 2020 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 18,027 | $ 17,759 |
Accumulated Amortization | (11,104) | (10,721) |
Net Carrying Amount | 6,923 | 7,038 |
Technology-based | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 8,327 | 8,160 |
Accumulated Amortization | (6,527) | (6,381) |
Net Carrying Amount | 1,800 | 1,779 |
Customer-related | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 5,066 | 4,967 |
Accumulated Amortization | (2,482) | (2,320) |
Net Carrying Amount | 2,584 | 2,647 |
Marketing-related | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 4,159 | 4,158 |
Accumulated Amortization | (1,655) | (1,588) |
Net Carrying Amount | 2,504 | 2,570 |
Contract-based | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 475 | 474 |
Accumulated Amortization | (440) | (432) |
Net Carrying Amount | $ 35 | $ 42 |
Intangible Assets - Additional
Intangible Assets - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Goodwill And Intangible Assets Disclosure [Abstract] | ||
Intangible assets amortization expense | $ 383 | $ 434 |
Estimated Future Amortization E
Estimated Future Amortization Expense Related to Intangible Assets (Detail) - USD ($) $ in Millions | Sep. 30, 2020 | Jun. 30, 2020 |
Goodwill And Intangible Assets Disclosure [Abstract] | ||
Year Ending June 30, 2021 (excluding the three months ended September 30, 2020) | $ 1,150 | |
Year Ending June 30, 2022 | 1,461 | |
Year Ending June 30, 2023 | 1,267 | |
Year Ending June 30, 2024 | 904 | |
Year Ending June 30, 2025 | 487 | |
Thereafter | 1,654 | |
Net Carrying Amount | $ 6,923 | $ 7,038 |
Debt (Detail)
Debt (Detail) - USD ($) $ in Millions | 3 Months Ended | ||
Sep. 30, 2020 | Jun. 30, 2020 | ||
Debt Instrument [Line Items] | |||
Total face value | $ 67,606 | $ 67,407 | |
Unamortized discount and issuance costs | (542) | (554) | |
Hedge fair value adjustments | [1] | 89 | 93 |
Premium on debt exchange | [2] | (3,601) | (3,619) |
Total debt | 63,552 | 63,327 | |
Current portion of long-term debt | (6,497) | (3,749) | |
Long-term debt | $ 57,055 | 59,578 | |
2009 Issuance of $3.8 billion | |||
Debt Instrument [Line Items] | |||
Maturities (calendar year) | [2] | 2039 | |
Stated Interest Rate | [2] | 5.20% | |
Effective Interest Rate | [2] | 5.24% | |
Total face value | [2] | $ 559 | 559 |
2010 Issuance of $4.8 billion | |||
Debt Instrument [Line Items] | |||
Total face value | [2] | $ 1,571 | 1,571 |
2010 Issuance of $4.8 billion | Minimum | |||
Debt Instrument [Line Items] | |||
Maturities (calendar year) | [2] | 2020 | |
Stated Interest Rate | [2] | 3.00% | |
Effective Interest Rate | [2] | 3.14% | |
2010 Issuance of $4.8 billion | Maximum | |||
Debt Instrument [Line Items] | |||
Maturities (calendar year) | [2] | 2040 | |
Stated Interest Rate | [2] | 4.50% | |
Effective Interest Rate | [2] | 4.57% | |
2011 Issuance of $2.3 billion | |||
Debt Instrument [Line Items] | |||
Total face value | [2] | $ 1,270 | 1,270 |
2011 Issuance of $2.3 billion | Minimum | |||
Debt Instrument [Line Items] | |||
Maturities (calendar year) | [2] | 2021 | |
Stated Interest Rate | [2] | 4.00% | |
Effective Interest Rate | [2] | 4.08% | |
2011 Issuance of $2.3 billion | Maximum | |||
Debt Instrument [Line Items] | |||
Maturities (calendar year) | [2] | 2041 | |
Stated Interest Rate | [2] | 5.30% | |
Effective Interest Rate | [2] | 5.36% | |
2012 Issuance of $2.3 billion | |||
Debt Instrument [Line Items] | |||
Total face value | $ 1,650 | 1,650 | |
2012 Issuance of $2.3 billion | Minimum | |||
Debt Instrument [Line Items] | |||
Maturities (calendar year) | 2022 | ||
Stated Interest Rate | 2.13% | ||
Effective Interest Rate | 2.24% | ||
2012 Issuance of $2.3 billion | Maximum | |||
Debt Instrument [Line Items] | |||
Maturities (calendar year) | 2042 | ||
Stated Interest Rate | 3.50% | ||
Effective Interest Rate | 3.57% | ||
2013 Issuance of $5.2 billion | |||
Debt Instrument [Line Items] | |||
Total face value | [2] | $ 2,919 | 2,919 |
2013 Issuance of $5.2 billion | Minimum | |||
Debt Instrument [Line Items] | |||
Maturities (calendar year) | [2] | 2023 | |
Stated Interest Rate | [2] | 2.38% | |
Effective Interest Rate | [2] | 2.47% | |
2013 Issuance of $5.2 billion | Maximum | |||
Debt Instrument [Line Items] | |||
Maturities (calendar year) | [2] | 2043 | |
Stated Interest Rate | [2] | 4.88% | |
Effective Interest Rate | [2] | 4.92% | |
2013 Issuance of €4.1 billion | |||
Debt Instrument [Line Items] | |||
Total face value | $ 4,748 | 4,549 | |
2013 Issuance of €4.1 billion | Minimum | |||
Debt Instrument [Line Items] | |||
Maturities (calendar year) | 2021 | ||
Stated Interest Rate | 2.13% | ||
Effective Interest Rate | 2.23% | ||
2013 Issuance of €4.1 billion | Maximum | |||
Debt Instrument [Line Items] | |||
Maturities (calendar year) | 2033 | ||
Stated Interest Rate | 3.13% | ||
Effective Interest Rate | 3.22% | ||
2015 Issuance of $23.8 billion | |||
Debt Instrument [Line Items] | |||
Total face value | [2] | $ 15,549 | 15,549 |
2015 Issuance of $23.8 billion | Minimum | |||
Debt Instrument [Line Items] | |||
Maturities (calendar year) | [2] | 2020 | |
Stated Interest Rate | [2] | 2.00% | |
Effective Interest Rate | [2] | 2.09% | |
2015 Issuance of $23.8 billion | Maximum | |||
Debt Instrument [Line Items] | |||
Maturities (calendar year) | [2] | 2055 | |
Stated Interest Rate | [2] | 4.75% | |
Effective Interest Rate | [2] | 4.78% | |
2016 Issuance of $19.8 billion | |||
Debt Instrument [Line Items] | |||
Total face value | [2] | $ 16,955 | 16,955 |
2016 Issuance of $19.8 billion | Minimum | |||
Debt Instrument [Line Items] | |||
Maturities (calendar year) | [2] | 2021 | |
Stated Interest Rate | [2] | 1.55% | |
Effective Interest Rate | [2] | 1.64% | |
2016 Issuance of $19.8 billion | Maximum | |||
Debt Instrument [Line Items] | |||
Maturities (calendar year) | [2] | 2056 | |
Stated Interest Rate | [2] | 3.95% | |
Effective Interest Rate | [2] | 4.03% | |
2017 Issuance of $17.0 billion | |||
Debt Instrument [Line Items] | |||
Total face value | [2] | $ 12,385 | 12,385 |
2017 Issuance of $17.0 billion | Minimum | |||
Debt Instrument [Line Items] | |||
Maturities (calendar year) | [2] | 2022 | |
Stated Interest Rate | [2] | 2.40% | |
Effective Interest Rate | [2] | 2.52% | |
2017 Issuance of $17.0 billion | Maximum | |||
Debt Instrument [Line Items] | |||
Maturities (calendar year) | [2] | 2057 | |
Stated Interest Rate | [2] | 4.50% | |
Effective Interest Rate | [2] | 4.53% | |
2020 Issuance of $10.0 billion | |||
Debt Instrument [Line Items] | |||
Total face value | [2] | $ 10,000 | $ 10,000 |
2020 Issuance of $10.0 billion | Minimum | |||
Debt Instrument [Line Items] | |||
Maturities (calendar year) | [2] | 2050 | |
Stated Interest Rate | [2] | 2.53% | |
Effective Interest Rate | [2] | 2.53% | |
2020 Issuance of $10.0 billion | Maximum | |||
Debt Instrument [Line Items] | |||
Maturities (calendar year) | [2] | 2060 | |
Stated Interest Rate | [2] | 2.68% | |
Effective Interest Rate | [2] | 2.68% | |
[1] | Refer to Note 5 – Derivatives for further information on the interest rate swaps related to fixed-rate debt. | ||
[2] | In June 2020, we exchanged a portion of our existing debt at premium for cash and new debt with longer maturities. The premium will be amortized over the term of the new debt. |
Debt (Parenthetical) (Detail)
Debt (Parenthetical) (Detail) - 3 months ended Sep. 30, 2020 € in Billions, $ in Billions | USD ($) | EUR (€) |
2009 Issuance of $3.8 billion | ||
Debt Instrument [Line Items] | ||
Debt, issuance date | 2009 | |
Debt, face value | $ 3.8 | |
2010 Issuance of $4.8 billion | ||
Debt Instrument [Line Items] | ||
Debt, issuance date | 2010 | |
Debt, face value | $ 4.8 | |
2011 Issuance of $2.3 billion | ||
Debt Instrument [Line Items] | ||
Debt, issuance date | 2011 | |
Debt, face value | $ 2.3 | |
2012 Issuance of $2.3 billion | ||
Debt Instrument [Line Items] | ||
Debt, issuance date | 2012 | |
Debt, face value | $ 2.3 | |
2013 Issuance of $5.2 billion | ||
Debt Instrument [Line Items] | ||
Debt, issuance date | 2013 | |
Debt, face value | $ 5.2 | |
2013 Issuance of €4.1 billion | ||
Debt Instrument [Line Items] | ||
Debt, issuance date | 2013 | |
Debt, face value | € | € 4.1 | |
2015 Issuance of $23.8 billion | ||
Debt Instrument [Line Items] | ||
Debt, issuance date | 2015 | |
Debt, face value | $ 23.8 | |
2016 Issuance of $19.8 billion | ||
Debt Instrument [Line Items] | ||
Debt, issuance date | 2016 | |
Debt, face value | $ 19.8 | |
2017 Issuance of $17.0 billion | ||
Debt Instrument [Line Items] | ||
Debt, issuance date | 2017 | |
Debt, face value | $ 17 | |
2020 Issuance of $10.0 billion | ||
Debt Instrument [Line Items] | ||
Debt, issuance date | 2020 | |
Debt, face value | $ 10 |
Debt - Additional Information (
Debt - Additional Information (Detail) - USD ($) $ in Billions | Sep. 30, 2020 | Jun. 30, 2020 |
Debt Disclosure [Abstract] | ||
Long-term debt fair value | $ 77.7 | $ 77.1 |
Maturities of Long-term Debt In
Maturities of Long-term Debt Including Current Portion (Detail) - USD ($) $ in Millions | Sep. 30, 2020 | Jun. 30, 2020 |
Debt Disclosure [Abstract] | ||
Year Ending June 30, 2021 (excluding the three months ended September 30, 2020) | $ 3,750 | |
Year Ending June 30, 2022 | 8,052 | |
Year Ending June 30, 2023 | 2,750 | |
Year Ending June 30, 2024 | 5,250 | |
Year Ending June 30, 2025 | 2,250 | |
Thereafter | 45,554 | |
Total | $ 67,606 | $ 67,407 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Jun. 30, 2020 | |
Income Taxes [Line Items] | |||
Effective tax rate | 14.00% | 16.00% | |
Long-term income taxes | $ 28,204 | $ 29,432 | |
Unrecognized Tax Benefits and Other Income Tax Liabilities | |||
Income Taxes [Line Items] | |||
Long-term income taxes | $ 16,900 | $ 16,600 |
Income Taxes - Additional Inf_2
Income Taxes - Additional Information Regarding Examinations (Detail) | 3 Months Ended | 12 Months Ended | ||
Sep. 30, 2020 | Jun. 30, 2018 | Jun. 30, 2016 | Jun. 30, 2011 | |
Earliest Tax Year | Foreign Country | ||||
Income Tax Examination [Line Items] | ||||
Tax years subject to examination | 1996 | |||
Latest Tax Year | Foreign Country | ||||
Income Tax Examination [Line Items] | ||||
Tax years subject to examination | 2020 | |||
Internal Revenue Service (IRS) | Earliest Tax Year | ||||
Income Tax Examination [Line Items] | ||||
Tax years under audit | 2010 | 2007 | 2004 | |
Tax years subject to examination | 2004 | |||
Internal Revenue Service (IRS) | Latest Tax Year | ||||
Income Tax Examination [Line Items] | ||||
Tax years under audit | 2013 | 2009 | 2006 | |
Tax years subject to examination | 2017 |
Unearned Revenue by Segment (De
Unearned Revenue by Segment (Detail) - USD ($) $ in Millions | Sep. 30, 2020 | Jun. 30, 2020 |
Contract With Customer Liability [Line Items] | ||
Unearned revenue | $ 36,305 | $ 39,180 |
Productivity and Business Processes | ||
Contract With Customer Liability [Line Items] | ||
Unearned revenue | 17,675 | 18,643 |
Intelligent Cloud | ||
Contract With Customer Liability [Line Items] | ||
Unearned revenue | 15,039 | 16,620 |
More Personal Computing | ||
Contract With Customer Liability [Line Items] | ||
Unearned revenue | $ 3,591 | $ 3,917 |
Changes in Unearned Revenue (De
Changes in Unearned Revenue (Detail) $ in Millions | 3 Months Ended |
Sep. 30, 2020USD ($) | |
Revenue From Contract With Customer [Abstract] | |
Balance, beginning of period | $ 39,180 |
Deferral of revenue | 17,976 |
Recognition of unearned revenue | (20,851) |
Balance, end of period | $ 36,305 |
Unearned Revenue - Additional I
Unearned Revenue - Additional Information (Detail) $ in Billions | Sep. 30, 2020USD ($) |
Contract With Customer Liability [Line Items] | |
Revenue allocated to remaining performance obligations | $ 111 |
Commercial Customers | |
Contract With Customer Liability [Line Items] | |
Revenue allocated to remaining performance obligations | $ 107 |
Unearned Revenue - Remaining Pe
Unearned Revenue - Remaining Performance Obligation - Additional Information (Detail) - Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2020-10-01 | Sep. 30, 2020 |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Revenue allocated to remaining performance obligations, percentage of revenue expected to be recognized | 50.00% |
Revenue allocated to remaining performance obligations, expected timing of satisfaction | 12 months |
Leases - Additional Information
Leases - Additional Information (Detail) $ in Billions | 3 Months Ended |
Sep. 30, 2020USD ($) | |
Operating Lease | |
Leases [Line Items] | |
Additional leases, primarily for datacenters, that have not yet commenced | $ 4.3 |
Finance Lease | |
Leases [Line Items] | |
Additional leases, primarily for datacenters, that have not yet commenced | $ 4.6 |
Minimum | |
Leases [Line Items] | |
Operating and Finance leases, remaining lease terms | 1 year |
Additional operating leases that have not yet commenced, lease terms | 1 year |
Additional finance leases that have not yet commenced, lease terms | 1 year |
Maximum | |
Leases [Line Items] | |
Operating and Finance leases, remaining lease terms | 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 | 16 years |
Additional finance leases that have not yet commenced, lease terms | 16 years |
Components of Lease Expense (De
Components of Lease Expense (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Leases [Abstract] | ||
Operating lease cost | $ 498 | $ 465 |
Finance lease cost: | ||
Amortization of right-of-use assets | 206 | 125 |
Interest on lease liabilities | 92 | 78 |
Total finance lease cost | $ 298 | $ 203 |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information Related to Leases (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Cash paid for amounts included in the measurement of lease liabilities: | ||
Operating cash flows from operating leases | $ 491 | $ 453 |
Operating cash flows from finance leases | 92 | 78 |
Financing cash flows from finance leases | 136 | 79 |
Right-of-use assets obtained in exchange for lease obligations: | ||
Operating leases | 678 | 983 |
Finance leases | $ 635 | $ 1,489 |
Supplemental Balance Sheet Info
Supplemental Balance Sheet Information Related to Leases (Detail) - USD ($) $ in Millions | Sep. 30, 2020 | Jun. 30, 2020 |
Operating Leases | ||
Operating lease right-of-use assets | $ 9,047 | $ 8,753 |
Total operating lease liabilities | 9,497 | 9,287 |
Finance Leases | ||
Accumulated depreciation | (45,417) | (43,197) |
Property and equipment, net | 47,927 | 44,151 |
Total finance lease liabilities | $ 10,167 | $ 9,496 |
Weighted Average Remaining Lease Term | ||
Operating leases | 7 years | 8 years |
Finance leases | 12 years | 13 years |
Weighted Average Discount Rate | ||
Operating leases | 2.60% | 2.70% |
Finance leases | 3.80% | 3.90% |
Finance Lease | ||
Finance Leases | ||
Property and equipment, at cost | $ 11,174 | $ 10,371 |
Accumulated depreciation | (1,591) | (1,385) |
Property and equipment, net | 9,583 | 8,986 |
Other Current Liabilities | ||
Operating Leases | ||
Total operating lease liabilities | 1,744 | 1,616 |
Finance Leases | ||
Total finance lease liabilities | 596 | 540 |
Operating Lease Liabilities | ||
Operating Leases | ||
Total operating lease liabilities | 7,753 | 7,671 |
Other Long-term Liabilities | ||
Finance Leases | ||
Total finance lease liabilities | $ 9,571 | $ 8,956 |
Maturities of Lease Liabilities
Maturities of Lease Liabilities (Detail) - USD ($) $ in Millions | Sep. 30, 2020 | Jun. 30, 2020 |
Leases [Abstract] | ||
Operating Leases, Year Ending June 30, 2021 (excluding the three months ended September 30, 2020) | $ 1,522 | |
Operating Leases, Year Ending June 30, 2022 | 1,738 | |
Operating Leases, Year Ending June 30, 2023 | 1,566 | |
Operating Leases, Year Ending June 30, 2024 | 1,362 | |
Operating Leases, Year Ending June 30, 2025 | 1,090 | |
Operating Leases, Thereafter | 3,513 | |
Operating Leases, Total lease payments | 10,791 | |
Operating Leases, Less imputed interest | (1,294) | |
Operating Leases | 9,497 | $ 9,287 |
Finance Leases, Year Ending June 30, 2021 (excluding the three months ended September 30, 2020 | 709 | |
Finance Leases, Year Ending June 30, 2022 | 958 | |
Finance Leases, Year Ending June 30, 2023 | 968 | |
Finance Leases, Year Ending June 30, 2024 | 982 | |
Finance Leases, Year Ending June 30, 2025 | 1,304 | |
Finance Leases, Thereafter | 7,805 | |
Finance Leases, Total lease payments | 12,726 | |
Finance Leases, Less imputed interest | (2,559) | |
Finance Leases | $ 10,167 | $ 9,496 |
Contingencies - Additional Info
Contingencies - Additional Information (Detail) $ in Millions | Sep. 30, 2020USD ($) |
Commitments And Contingencies Disclosure [Abstract] | |
Accrual for disclosed loss contingencies, current, ending balance | $ 311 |
Amount not accrued for estimated maximum losses for disclosed loss contingencies | $ 500 |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Detail) - USD ($) | 3 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 18, 2019 | Sep. 20, 2016 | |
Share Repurchases [Line Items] | ||||
Amount of shares repurchased to settle employee tax withholding related to vesting of stock awards | $ 1,500,000,000 | $ 967,000,000 | ||
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 | |||
Share Repurchase Program 2019 | ||||
Share Repurchases [Line Items] | ||||
Amount available for repurchase under the share repurchase program approved by the company's Board of Directors | $ 40,000,000,000 | |||
Unused amount of share repurchase program | $ 26,400,000,000 |
Share Repurchases (Detail)
Share Repurchases (Detail) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Share Repurchase Program 2019 | ||
Share Repurchases [Line Items] | ||
Shares of common stock repurchased | 25 | |
Value of common stock repurchased | $ 5,270 | |
Share Repurchase Program 2016 | ||
Share Repurchases [Line Items] | ||
Shares of common stock repurchased | 29 | |
Value of common stock repurchased | $ 4,000 |
Dividends Declared (Detail)
Dividends Declared (Detail) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Equity [Abstract] | ||
Declaration Date | Sep. 15, 2020 | Sep. 18, 2019 |
Record Date | Nov. 19, 2020 | Nov. 21, 2019 |
Payment Date | Dec. 10, 2020 | Dec. 12, 2019 |
Dividend Per Share | $ 0.56 | $ 0.51 |
Amount | $ 4,236 | $ 3,886 |
Summary of Changes in Accumulat
Summary of Changes in Accumulated Other Comprehensive Income (Loss) by Component (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Balance, beginning of period | $ 118,304 | |
Accounting Standards Update [Extensible List] | us-gaap:AccountingStandardsUpdate201601Member | us-gaap:AccountingStandardsUpdate201601Member |
Net change related to other comprehensive income (loss) | $ (86) | $ 279 |
Balance, end of period | 123,392 | 106,061 |
Derivatives | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Balance, beginning of period | (38) | 0 |
Unrealized gains (losses), net of tax | 20 | (6) |
Tax expense (benefit) included in provision for income taxes | 4 | (1) |
Amounts reclassified from accumulated other comprehensive income (loss) | (16) | 4 |
Net change related to other comprehensive income (loss) | 4 | (2) |
Balance, end of period | (34) | (2) |
Derivatives | Revenue | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Reclassification adjustments for (gains) losses | (20) | 5 |
Investments | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Balance, beginning of period | 5,478 | 1,488 |
Unrealized gains (losses), net of tax | (188) | 576 |
Tax expense (benefit) included in provision for income taxes | 4 | 0 |
Amounts reclassified from accumulated other comprehensive income (loss) | (13) | 1 |
Net change related to other comprehensive income (loss) | (201) | 577 |
Balance, end of period | 5,287 | 2,065 |
Investments | Cumulative effect of accounting changes | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Balance, end of period | 10 | 0 |
Investments | Other Income (Expense), Net | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Reclassification adjustments for (gains) losses | (17) | 1 |
Translation adjustments and other | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Balance, beginning of period | (2,254) | (1,828) |
Net change related to other comprehensive income (loss) | 111 | (296) |
Balance, end of period | (2,143) | (2,124) |
Accumulated other comprehensive income (loss) | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Balance, beginning of period | 3,186 | (340) |
Net change related to other comprehensive income (loss) | (86) | 279 |
Balance, end of period | 3,110 | (61) |
Accumulated other comprehensive income (loss) | Cumulative effect of accounting changes | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Balance, end of period | $ 10 | $ 0 |
Summary of Changes in Accumul_2
Summary of Changes in Accumulated Other Comprehensive Income (Loss) by Component (Parenthetical) (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Derivatives | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Unrealized gains (losses), tax | $ 5 | $ (2) |
Net change related to other comprehensive income (loss), tax | 1 | (1) |
Investments | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Unrealized gains (losses), tax | (50) | 156 |
Net change related to other comprehensive income (loss), tax | (54) | 156 |
Translation adjustments and other | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Net change related to other comprehensive income (loss), tax | $ (9) | $ (8) |
Segment Revenue (Detail)
Segment Revenue (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Segment Reporting Information [Line Items] | ||
Revenue | $ 37,154 | $ 33,055 |
Productivity and Business Processes | ||
Segment Reporting Information [Line Items] | ||
Revenue | 12,319 | 11,077 |
Intelligent Cloud | ||
Segment Reporting Information [Line Items] | ||
Revenue | 12,986 | 10,845 |
More Personal Computing | ||
Segment Reporting Information [Line Items] | ||
Revenue | $ 11,849 | $ 11,133 |
Operating Income (Loss) by Segm
Operating Income (Loss) by Segment (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Segment Reporting Information [Line Items] | ||
Operating Income (Loss) | $ 15,876 | $ 12,686 |
Productivity and Business Processes | ||
Segment Reporting Information [Line Items] | ||
Operating Income (Loss) | 5,706 | 4,782 |
Intelligent Cloud | ||
Segment Reporting Information [Line Items] | ||
Operating Income (Loss) | 5,422 | 3,889 |
More Personal Computing | ||
Segment Reporting Information [Line Items] | ||
Operating Income (Loss) | $ 4,748 | $ 4,015 |
Segment Information and Geogr_3
Segment Information and Geographic Data - Additional Information (Detail) | 3 Months Ended |
Sep. 30, 2020 | |
Segment Reporting [Abstract] | |
Sales to an individual customer | No sales to an individual customer or country other than the United States accounted for more than 10% of revenue for the three months ended September 30, 2020 or 2019. |
Revenue Classified by Major Geo
Revenue Classified by Major Geographic Areas (Detail) - USD ($) $ in Millions | 3 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | ||
Revenues From External Customers And Long Lived Assets [Line Items] | |||
Revenues | $ 37,154 | $ 33,055 | |
United States | |||
Revenues From External Customers And Long Lived Assets [Line Items] | |||
Revenues | [1] | 19,025 | 17,270 |
Other Countries | |||
Revenues From External Customers And Long Lived Assets [Line Items] | |||
Revenues | $ 18,129 | $ 15,785 | |
[1] | Includes billings to OEMs and certain multinational organizations because of the nature of these businesses and the impracticability of determining the geographic source of the revenue. |
Revenue Classified by Significa
Revenue Classified by Significant Product and Service Offerings (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Revenue from External Customer [Line Items] | ||
Revenue | $ 37,154 | $ 33,055 |
Server Products and Cloud Services | ||
Revenue from External Customer [Line Items] | ||
Revenue | 11,195 | 9,192 |
Office Products and Cloud Services | ||
Revenue from External Customer [Line Items] | ||
Revenue | 9,278 | 8,466 |
Windows | ||
Revenue from External Customer [Line Items] | ||
Revenue | 5,305 | 5,353 |
Gaming | ||
Revenue from External Customer [Line Items] | ||
Revenue | 3,092 | 2,542 |
Revenue from External Customer [Line Items] | ||
Revenue | 2,206 | 1,909 |
Search Advertising | ||
Revenue from External Customer [Line Items] | ||
Revenue | 1,789 | 1,991 |
Enterprise Services | ||
Revenue from External Customer [Line Items] | ||
Revenue | 1,637 | 1,545 |
Devices | ||
Revenue from External Customer [Line Items] | ||
Revenue | 1,620 | 1,202 |
Other | ||
Revenue from External Customer [Line Items] | ||
Revenue | $ 1,032 | $ 855 |
Revenue Classified by Signifi_2
Revenue Classified by Significant Product and Service Offerings (Parenthetical) (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Revenue from External Customer [Line Items] | ||
Revenue | $ 37,154 | $ 33,055 |
Commercial Cloud | ||
Revenue from External Customer [Line Items] | ||
Revenue | $ 15,200 | $ 11,600 |