INCOME TAXES (Tables)

12 Months Ended

Jun. 30, 2018

Income Tax Disclosure [Abstract]

Provision for Income Taxes

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

(In millions)
Year Ended June 30,	2018			2017			2016
Current Taxes
U.S. federal	$	19,764		$	2,739		$	545
U.S. state and local		934			30			136
Foreign		4,348			2,472			1,940
Current taxes	$	25,046		$	5,241		$	2,621
Deferred Taxes
U.S. federal	$	(4,292	)	$	(554	)	$	1,919
U.S. state and local		(458	)		269			111
Foreign		(393	)		(544	)		449
Deferred taxes	$	(5,143	)	$	(829	)	$	2,479
Provision for income taxes	$	19,903		$	4,412		$	5,100

Income (Loss) Before Income Taxes

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

(In millions)
Year Ended June 30,	2018		2017		2016
U.S.	$	11,527	$	6,843	$	5,125
Foreign		24,947		23,058		20,514
Income before income taxes	$	36,474	$	29,901	$	25,639

Difference Between Income Taxes Computed at Federal Statutory Rate and Provision for Income Taxes

Effective Tax Rate

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,	2018		2017		2016
Federal statutory rate		28.1%		35.0%		35.0%
Effect of:
Foreign earnings taxed at lower rates		(7.8)%		(11.6)%		(14.5)%
Impacts of TCJA		37.7%		0%		0%
Phone business losses		0%		(5.7)%		1.0%
Excess tax benefits relating to stock-based compensation		(2.5)%		(2.1)%		(1.6)%
Interest, net		1.2%		1.4%		0.9%
Other reconciling items, net		(2.1)%		(2.2)%		(0.9)%
Effective rate		54.6%		14.8%		19.9%

Deferred Income Tax Assets and Liabilities

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

(In millions)
June 30,	2018				2017
Deferred Income Tax Assets
Stock-based compensation expense	$		460		$		777
Accruals, reserves, and other expenses			1,832				1,859
Loss and credit carryforwards			3,369				4,809
Depreciation and amortization			351				53
Other			56				255
Deferred income tax assets			6,068				7,753
Less valuation allowance			(3,186	)			(3,310	)
Deferred income tax assets, net of valuation allowance	$		2,882		$		4,443
Deferred Income Tax Liabilities
Foreign earnings	$	0			$	(1,134		)
Unrealized gain on investments and debt		0				(1,384		)
Unearned revenue		(639		)		(5,760		)
Depreciation and amortization		(1,103		)		(1,630		)
Other		(312		)		(21		)
Deferred income tax liabilities	$	(2,054		)	$	(9,929		)
Net deferred income tax assets (liabilities)	$	828			$	(5,486		)
Reported As
Other long-term assets	$	1,369			$	248
Long-term deferred income tax liabilities		(541		)		(5,734		)
Net deferred income tax assets (liabilities)	$	828			$	(5,486		)

Changes in Unrecognized Tax Benefits

(In millions)
Year Ended June 30,	2018			2017			2016
Balance, beginning of year	$	11,737		$	10,164		$	9,599
Decreases related to settlements		(193	)		(4	)		(201	)
Increases for tax positions related to the current year		1,445			1,277			1,086
Increases for tax positions related to prior years		151			397			115
Decreases for tax positions related to prior years		(1,176	)		(49	)		(317	)
Decreases due to lapsed statutes of limitations		(3	)		(48	)		(118	)
Balance, end of year	$	11,961		$	11,737		$	10,164