FAIR VALUE MEASUREMENTS

12 Months Ended

Jun. 30, 2018

NOTE 6 — FAIR VALUE MEASUREMENTS

Financial 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, 2018

Assets

Mutual funds	$	246	$	0	$	0	$	246	$	0		$	246
Commercial paper		0		2,513		0		2,513		0			2,513
Certificates of deposit		0		2,058		0		2,058		0			2,058
U.S. government and agency securities		107,015		1,742		0		108,757		0			108,757
Foreign government bonds		22		5,054		0		5,076		0			5,076
Mortgage- and asset-backed securities		0		3,855		0		3,855		0			3,855
Corporate notes and bonds		0		6,894		15		6,909		0			6,909
Municipal securities		0		307		0		307		0			307
Common and preferred stock		287		0		18		305		0			305
Derivatives		1		535		2		538		(152	)		386


Total	$	107,571	$	22,958	$	35	$	130,564	$	(152	)	$	130,412


Liabilities

Derivatives and other	$	1	$	206	$	0	$	207	$	(153	)	$	54

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


June 30, 2017

Assets

Mutual funds	$	1,478	$	0	$	0	$	1,478	$	0		$	1,478
Commercial paper		0		319		0		319		0			319
Certificates of deposit		0		1,358		0		1,358		0			1,358
U.S. government and agency securities		109,228		2,616		0		111,844		0			111,844
Foreign government bonds		0		5,187		0		5,187		0			5,187
Mortgage- and asset-backed securities		0		3,934		0		3,934		0			3,934
Corporate notes and bonds		0		4,829		1		4,830		0			4,830
Municipal securities		0		327		0		327		0			327
Common and preferred stock		2,414		1,994		18		4,426		0			4,426
Derivatives		1		508		0		509		(227	)		282


Total	$	113,121	$	21,072	$	19	$	134,212	$	(227	)	$	133,985


Liabilities

Derivatives and other	$	0	$	345	$	39	$	384	$	(228	)	$	156

(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 the balance sheet presentation of these same assets in Note 4 – Investments.

(In millions)


June 30,		2018			2017

Net fair value of assets measured at fair value on a recurring basis	$	130,412		$	133,985
Cash		3,942			3,624
Common and preferred stock measured at fair value on a nonrecurring basis		999			1,073
Other investments measured at fair value on a nonrecurring basis		557			523
Less derivative net assets classified as other current and long-term assets		(282	)		(202	)
Other		2			1


Recorded basis of investment components	$	135,630		$	139,004

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

During fiscal year 2018 and 2017, 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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