FAIR VALUE MEASUREMENTS

12 Months Ended

Jun. 30, 2016

NOTE 6 — FAIR VALUE MEASUREMENTS

Assets and Liabilities Measured at Fair Value on a 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


June 30, 2016

Assets

Mutual funds	$	1,012	$	0	$	0	$	1,012	$	0		$	1,012
Commercial paper		0		298		0		298		0			298
Certificates of deposit		0		1,000		0		1,000		0			1,000
U.S. government and agency securities		86,492		3,707		0		90,199		0			90,199
Foreign government bonds		10		5,705		0		5,715		0			5,715
Mortgage- and asset-backed securities		0		4,803		0		4,803		0			4,803
Corporate notes and bonds		0		6,361		1		6,362		0			6,362
Municipal securities		0		342		0		342		0			342
Common and preferred stock		6,918		2,114		18		9,050		0			9,050
Derivatives		6		633		0		639		(401	)		238

Total	$	94,438	$	24,963	$	19	$	119,420	$	(401	)	$	119,019


Liabilities

Derivatives and other	$	17	$	613	$	0	$	630	$	(398	)	$	232


(In millions)		Level 1		Level 2		Level 3		Gross Fair Value		Netting	^(a)		Net Fair Value


June 30, 2015

Assets

Mutual funds	$	1,100	$	0	$	0	$	1,100	$	0		$	1,100
Commercial paper		0		1		0		1		0			1
Certificates of deposit		0		906		0		906		0			906
U.S. government and agency securities		71,930		955		0		72,885		0			72,885
Foreign government bonds		131		5,299		0		5,430		0			5,430
Mortgage- and asset-backed securities		0		4,917		0		4,917		0			4,917
Corporate notes and bonds		0		7,108		1		7,109		0			7,109
Municipal securities		0		319		0		319		0			319
Common and preferred stock		8,585		2,277		14		10,876		0			10,876
Derivatives		4		979		5		988		(162	)		826

Total	$	81,750	$	22,761	$	20	$	104,531	$	(162	)	$	104,369


Liabilities

Derivatives and other	$	5	$	159	$	54	$	218	$	(161	)	$	57

(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.

The changes in our Level 3 financial instruments that are measured at fair value on a recurring basis were immaterial during the periods presented.

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


(In millions)


June 30,	2016			2015

Net fair value of assets measured at fair value on a recurring basis	$	119,019		$	104,369
Cash		3,501			3,679
Common and preferred stock measured at fair value on a nonrecurring basis		767			561
Other investments measured at fair value on a nonrecurring basis		593			589
Less derivative net assets classified as other current assets		(246	)		(648	)
Other		12			4

Recorded basis of investment components	$	123,646		$	108,554

Financial Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

During fiscal year 2016 and 2015, we did not record any material other-than-temporary impairments on financial assets required to be measured at fair value on a nonrecurring basis.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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