INCOME TAXES (Tables)

12 Months Ended

Jun. 30, 2011

Provision for Income Taxes

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

(In millions)
Year Ended June 30,	2011		2010			2009
Current Taxes
U.S. federal	$	3,108	$	4,415		$	3,159
U.S. state and local		209		357			192
International		1,602		1,701			1,139
Current taxes		4,919		6,473			4,490
Deferred Taxes
Deferred taxes		2		(220	)		762
Provision for income taxes	$	4,921	$	6,253		$	5,252

Income Before Income Taxes

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

(In millions)
Year Ended June 30,	2011		2010		2009
U.S.	$	8,862	$	9,575	$	5,529
International		19,209		15,438		14,292
Income before income taxes	$	28,071	$	25,013	$	19,821

Difference Between Income Taxes Computed at the Federal Statutory Rate and the 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,	2011		2010		2009
Federal statutory rate		35.0%		35.0%		35.0%
Effect of:
Foreign earnings taxed at lower rates		(15.6)%		(12.1)%		(9.3)%
Internal Revenue Service settlement		(1.7)%		0%		0%
Other reconciling items, net		(0.2)%		2.1%		0.8%
Effective rate		17.5%		25.0%		26.5%

Deferred Income Tax Assets and Liabilities

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

(In millions)
June 30,	2011			2010
Deferred Income Tax Assets
Stock-based compensation expense	$	1,079		$	1,329
Other expense items		1,411			1,696
Unearned revenue		463			556
Impaired investments		424			289
Other revenue items		69			80
Deferred income tax assets	$	3,446		$	3,950
Deferred Income Tax Liabilities
International earnings	$	(1,266	)	$	(1,056	)
Unrealized gain on investments		(904	)		(674	)
Other		(265	)		(265	)
Deferred income tax liabilities		(2,435	)		(1,995	)
Net deferred income tax assets	$	1,011		$	1,955
Reported As
Current deferred income tax assets	$	2,467		$	2,184
Long-term deferred income tax liabilities		(1,456	)		(229	)
Net deferred income tax assets	$	1,011		$	1,955

Changes in Unrecognized Tax Benefits

The aggregate changes in the balance of unrecognized tax benefits were as follows:

(In millions)
Year Ended June 30,	2011			2010			2009
Balance, beginning of year	$	6,542		$	5,403		$	3,195
Decreases related to settlements		(632	)		(57	)		(82	)
Increases for tax positions related to the current year		739			1,012			2,203
Increases for tax positions related to prior years		405			364			239
Decreases for tax positions related to prior years		(119	)		(166	)		(132	)
Decreases due to lapsed statute of limitations		0			(14	)		(20	)
Balance, end of year	$	6,935		$	6,542		$	5,403