Unearned Revenue

12 Months Ended

Jun. 30, 2012

Unearned Revenue

NOTE 14 — UNEARNED REVENUE

Unearned revenue comprises mainly unearned revenue from volume licensing programs, and payments for offerings for which we have been paid in advance and we earn the revenue when we provide the service or software or otherwise meet the revenue recognition criteria.

Volume Licensing Programs

Unearned revenue from volume licensing programs represents customer billings for multi-year licensing arrangements paid either at inception of the agreement or annually at the beginning of each billing coverage period and accounted for as subscriptions with revenue recognized ratably over the billing coverage period.

Other

Also included in unearned revenue are payments for post-delivery support and consulting services to be performed in the future; Xbox LIVE subscriptions and prepaid points; sales of Windows 7 with an option to upgrade to Windows 8 at a discounted price (the “Windows Upgrade Offer”); Microsoft Dynamics business solutions products; Skype prepaid credits and subscriptions; OEM minimum commitments; and other offerings for which we have been paid in advance and earn the revenue when we provide the service or software, or otherwise meet the revenue recognition criteria.

The components of unearned revenue were as follows:

(In millions)
June 30,	2012		2011
Volume licensing programs	$	16,717	$	14,625
Other (a)		3,342		2,495
Total	$	20,059	$	17,120

(a) Other as of June 30, 2012 includes $540 million of unearned revenue associated with the Windows Upgrade Offer.

Unearned revenue by segment was as follows:

(In millions)
June 30,	2012		2011
Windows & Windows Live Division	$	2,444	$	1,782
Server and Tools		7,445		6,315
Microsoft Business Division		9,015		8,187
Other segments		1,155		836
Total	$	20,059	$	17,120

Fiscal year 2011 amounts have been recast for the fiscal year 2012 movement of Forefront Protection for Office, an anti-malware solution, from Server and Tools to the Microsoft Business Division.