DERIVATIVES (Tables)

9 Months Ended

Mar. 31, 2019

Notional Amounts of Outstanding Derivative Instruments Measured in U.S. Dollar Equivalents

The following table presents the notional amounts of our outstanding derivative instruments measured in U.S. dollar equivalents:

(In millions)	March31, 2019		June 30, 2018
Designated as Hedging Instruments
Foreign exchange contracts sold	$	7,937	$	11,101
Not Designated as Hedging Instruments
Foreign exchange contracts purchased		8,576		9,425
Foreign exchange contracts sold		10,166		13,374
Equity contracts purchased		50		49
Equity contracts sold		6		5
Other contracts purchased		1,330		878
Other contracts sold		426		472

Fair Values of Derivative Instruments

The following table presents our derivative instruments:

	Derivative				Derivative		Derivative			Derivative
(In millions)	Assets				Liabilities		Assets			Liabilities
	March 31, 2019						June 30, 2018
Changes in Fair Value Recorded in Other Comprehensive Income
Designated as Hedging Instruments
Foreign exchange contracts	$	58		$	0		$	174		$	0
Changes in Fair Value Recorded in Net Income
Designated as Hedging Instruments
Foreign exchange contracts		85			(1	)		95			0
Not Designated as Hedging Instruments
Foreign exchange contracts		109			(114	)		256			(197	)
Equity contracts		5			(2	)		2			(7	)
Other contracts		16			(5	)		11			(3	)
Gross amounts of derivatives		273			(122	)		538			(207	)
Gross amounts of derivatives offset in the balance sheet		(85	)		85			(152	)		153
Cash collateral received		0			(49	)		0			(235	)
Net amounts of derivatives	$	188		$	(86	)	$	386		$	(289	)
Reported as
Short-term investments	$	82		$	0		$	104		$	0
Other current assets		100			0			260			0
Other long-term assets		6			0			22			0
Other current liabilities		0			(67	)		0			(288	)
Other long-term liabilities		0			(19	)		0			(1	)
Total	$	188		$	(86	)	$	386		$	(289	)

The following table presents the fair value of our derivatives instrumentson a gross basis:

(In millions)	Level 1				Level 2		Level 3		Total
March31, 2019
Derivative assets	$	0		$	270		$	3	$	273
Derivative liabilities		0			(122	)		0		(122	)
June 30, 2018
Derivative assets		1			535			2		538
Derivative liabilities		(1	)		(206	)		0		(207	)

Not Designated as Hedging Instruments

Gains (Losses) on Derivative Instruments

We recognized in other income (expense), net the following gains (losses) on derivatives not designated as hedging instruments:

(In millions)	Three Months Ended March 31,						Nine Months Ended March 31,
	2019			2018				2019			2018
Foreign exchange contracts	$	(87	)	$	(64	)	$	(196	)	$	(248	)
Equity contracts		2			(11	)		3			(89	)
Other contracts		20			(18	)		24			(9	)
Total	$	(65	)	$	(93	)	$	(169	)	$	(346	)

Fair value hedging

Gains (Losses) on Derivative Instruments

We recognized in other income (expense), net the following gains (losses) on contracts designated as fair value hedges and their related hedged items:

(In millions)	Three Months Ended March 31,						Nine Months Ended March 31,
	2019			2018				2019			2018
Foreign Exchange Contracts
Derivatives	$	129		$	(260	)	$	140		$	(224	)
Hedged items		(81	)		288			(19	)		298
Total amount of ineffectiveness	$	48		$	28		$	121		$	74
Equity Contracts
Derivatives	$	0		$	126		$	0		$	(181	)
Hedged items		0			(126	)		0			181
Total amount of ineffectiveness	$	0		$	0		$	0		$	0
Amount of equity contracts excluded from effectiveness assessment	$	0		$	0		$	0		$	60

Cash flow hedging

Gains (Losses) on Derivative Instruments

We recognized the following gains (losses) on foreign exchange contracts designated as cash flow hedges:

(In millions)	Three Months Ended March 31,						Nine Months Ended March 31,
	2019			2018				2019			2018
Effective Portion
Gains recognized in other comprehensive income (loss), net of tax of $(1), $7, $1, and $8	$	31		$	14		$	145		$	29
Gains reclassified from accumulated other comprehensive income (loss) into revenue		66			8			246			138
Amount Excluded from Effectiveness Assessment and Ineffective Portion
Losses recognized in other income (expense), net		(21	)		(62	)		(62	)		(226	)