Fair Value Measurements (Tables)

9 Months Ended

Mar. 31, 2013

Assets and Liabilities Measured at Fair Value on Recurring Basis

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

(In millions)		Level 1		Level 2		Level 3		Gross Fair Value		Netting	(a)		Net Fair Value
March 31, 2013
Assets
Mutual funds	$	1,064	$	0	$	0	$	1,064	$	0		$	1,064
Commercial paper		0		186		0		186		0			186
Certificates of deposit		0		934		0		934		0			934
U.S. government and agency securities		58,370		2,636		0		61,006		0			61,006
Foreign government bonds		47		1,101		0		1,148		0			1,148
Mortgage-backed securities		0		1,328		0		1,328		0			1,328
Corporate notes and bonds		0		5,928		19		5,947		0			5,947
Municipal securities		0		422		0		422		0			422
Common and preferred stock		8,785		735		5		9,525		0			9,525
Derivatives		10		362		0		372		(93	)		279
Total	$	68,276	$	13,632	$	24	$	81,932	$	(93	)	$	81,839
Liabilities
Derivatives and other	$	5	$	110	$	0	$	115	$	(92	)	$	23

(In millions)		Level 1		Level 2		Level 3		Gross Fair Value		Netting	(a)		Net Fair Value
June 30, 2012
Assets
Mutual funds	$	820	$	0	$	0	$	820	$	0		$	820
Commercial paper		0		96		0		96		0			96
Certificates of deposit		0		744		0		744		0			744
U.S. government and agency securities		42,291		5,019		0		47,310		0			47,310
Foreign government bonds		31		1,703		0		1,734		0			1,734
Mortgage-backed securities		0		1,892		0		1,892		0			1,892
Corporate notes and bonds		0		7,839		9		7,848		0			7,848
Municipal securities		0		416		0		416		0			416
Common and preferred stock		7,539		877		5		8,421		0			8,421
Derivatives		16		467		0		483		(141	)		342
Total	$	50,697	$	19,053	$	14	$	69,764	$	(141	)	$	69,623
Liabilities
Derivatives and other	$	10	$	145	$	0	$	155	$	(139	)	$	16

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

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

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

(In millions)
	March 31, 2013			June 30, 2012
Net fair value of assets measured at fair value on a recurring basis	$	81,839		$	69,623
Cash		2,271			2,019
Common and preferred stock measured at fair value on a nonrecurring basis		380			313
Other investments measured at fair value on a nonrecurring basis		1,287			1,043
Less derivative net assets classified as other current assets		(105	)		(185	)
Other		4			3
Recorded basis of investment components	$	85,676		$	72,816

Changes in Financial Instruments Measured at Level 3 Fair Value on Recurring Basis

The following tables present the changes during the periods presented in our Level 3 financial instruments that are measured at fair value on a recurring basis. The majority of these instruments consist of investment securities classified as available-for-sale with changes in fair value included in OCI.

(In millions)	Corporate Notes and Bonds		Common and Preferred Stock		Derivative Assets		Total
Three and Nine Months Ended March 31, 2013
Balance as of June 30, 2012	$	9	$	5	$	0	$	14
Realized and unrealized gains (losses):
Included in other income (expense)		0		0		0		0
Included in other comprehensive income (loss)		0		0		0		0
Purchases		8		0		0		8
Balance as of September 30, 2012	$	17	$	5	$	0	$	22
Realized and unrealized gains (losses):
Included in other income (expense)		0		0		0		0
Included in other comprehensive income		1		0		0		1
Balance as of December 31, 2012	$	18	$	5	$	0	$	23
Realized and unrealized gains (losses):
Included in other income (expense)		0		0		0		0
Included in other comprehensive income		1		0		0		1
Balance as of March 31, 2013	$	19	$	5	$	0	$	24
Change in unrealized gains (losses) included in other income (expense) for the three months ended March 31, 2013 related to assets held as of March 31, 2013	$	0	$	0	$	0	$	0
Change in unrealized gains (losses) included in other income (expense) for the nine months ended March 31, 2013 related to assets held as of March 31, 2013	$	0	$	0	$	0	$	0

(In millions)	Corporate Notes and Bonds			Common and Preferred Stock		Derivative Assets			Total
Three and Nine Months Ended March 31, 2012
Balance as of June 30, 2011	$	58		$	5	$	20		$	83
Realized and unrealized gains (losses):
Included in other income (expense)		0			0		(2	)		(2	)
Included in other comprehensive income		(21	)		0		0			(21	)
Balance as of September 30, 2011	$	37		$	5	$	18		$	60
Realized and unrealized gains (losses):
Included in other income (expense)		0			0		(3	)		(3	)
Included in other comprehensive income		0			0		0			0
Conversions of Level 3 instruments to Level 1 instruments		(28	)		0		(15	)		(43	)
Balance as of December 31, 2011	$	9		$	5	$	0		$	14
Realized and unrealized gains (losses):
Included in other income (expense)		0			0		0			0
Included in other comprehensive income		0			0		0			0
Balance as of March 31, 2012	$	9		$	5	$	0		$	14
Change in unrealized gains (losses) included in other income (expense) for the three months ended March 31, 2012 related to assets held as of March 31, 2012	$	0		$	0	$	0		$	0
Change in unrealized gains (losses) included in other income (expense) for the nine months ended March 31, 2012 related to assets held as of March 31, 2012	$	0		$	0	$	0		$	0