INCOME TAXES (Tables)

12 Months Ended

Jun. 30, 2024

Income Tax Disclosure [Abstract]

Provision for Income Taxes

The components of the provision for income taxes were as follows:

(In millions)
Year Ended June 30,	2024			2023			2022
Current Taxes
U.S. federal	$	12,165		$	14,009		$	8,329
U.S. state and local		2,366			2,322			1,679
Foreign		9,858			6,678			6,672
Current taxes	$	24,389		$	23,009		$	16,680
Deferred Taxes
U.S. federal	$	(4,791	)	$	(6,146	)	$	(4,815	)
U.S. state and local		(379	)		(477	)		(1,062	)
Foreign		432			564			175
Deferred taxes	$	(4,738	)	$	(6,059	)	$	(5,702	)
Provision for income taxes	$	19,651		$	16,950		$	10,978

Income Before Income Taxes

U.S. and foreign components of income before income taxes were as follows:

(In millions)
Year Ended June 30,	2024		2023		2022
U.S.	$	62,886	$	52,917	$	47,837
Foreign		44,901		36,394		35,879
Income before income taxes	$	107,787	$	89,311	$	83,716

Difference Between Income Taxes Computed at Federal Statutory Rate and Provision for Income Taxes

The items accounting for the difference between income taxes computed at the U.S. federal statutory rate and our effective rate were as follows:

Year Ended June 30,	2024		2023		2022
Federal statutory rate		21.0%		21.0%		21.0%
Effect of:
Foreign earnings taxed at lower rates		(1.4)%		(1.8)%		(1.3)%
Impact of intangible property transfers		0%		0%		(3.9)%
Foreign-derived intangible income deduction		(1.1)%		(1.3)%		(1.1)%
State income taxes, net of federal benefit		1.5%		1.6%		1.4%
Research and development credit		(1.1)%		(1.1)%		(0.9)%
Excess tax benefits relating to stock-based compensation		(1.1)%		(0.7)%		(1.9)%
Interest, net		1.1%		0.8%		0.5%
Other reconciling items, net		(0.7)%		0.5%		(0.7)%
Effective rate		18.2%		19.0%		13.1%

Deferred Income Tax Assets and Liabilities

The components of the deferred income tax assets and liabilities were as follows:

(In millions)
June 30,	2024			2023
Deferred Income Tax Assets
Stock-based compensation expense	$	765		$	681
Accruals, reserves, and other expenses		4,381			3,131
Loss and credit carryforwards		1,741			1,441
Amortization		4,159			9,440
Leasing liabilities		6,504			5,041
Unearned revenue		3,717			3,296
Book/tax basis differences in investments and debt		9			373
Capitalized research and development		11,442			6,958
Other		426			489
Deferred income tax assets		33,144			30,850
Less valuation allowance		(1,045	)		(939	)
Deferred income tax assets, net of valuation allowance	$	32,099		$	29,911
Deferred Income Tax Liabilities
Leasing assets	$	(6,503	)	$	(4,680	)
Depreciation		(3,940	)		(2,674	)
Deferred tax on foreign earnings		(1,837	)		(2,738	)
Other		(167	)		(89	)
Deferred income tax liabilities	$	(12,447	)	$	(10,181	)
Net deferred income tax assets	$	19,652		$	19,730
Reported As
Other long-term assets	$	22,270		$	20,163
Long-term deferred income tax liabilities		(2,618	)		(433	)
Net deferred income tax assets	$	19,652		$	19,730

Changes in Gross Unrecognized Tax Benefits Related to Uncertain Tax Positions

The aggregate changes in the gross unrecognized tax benefits related to uncertain tax positions were as follows:

(In millions)
Year Ended June 30,	2024			2023			2022
Beginning unrecognized tax benefits	$	17,120		$	15,593		$	14,550
Decreases related to settlements		(76	)		(329	)		(317	)
Increases for tax positions related to the current year		1,903			1,051			1,145
Increases for tax positions related to prior years (a)		4,289			870			461
Decreases for tax positions related to prior years		(464	)		(60	)		(246	)
Decreases due to lapsed statutes of limitations		(12	)		(5	)		0
Ending unrecognized tax benefits	$	22,760		$	17,120		$	15,593

(a)Fiscal year 2024 includes unrecognized tax benefits of $3.4 billion related to the acquisition of Activision Blizzard. See Note 8 – Business Combinations for further information.