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DERIVATIVES (Tables)
3 Months Ended
Sep. 30, 2018
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)

 

September 30,

2018

 

 

June 30,

2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Designated as Hedging Instruments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign exchange contracts sold

 

$

9,736

 

 

$

11,101

 

 

 

 

 

 

 

 

 

 

Not Designated as Hedging Instruments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign exchange contracts purchased

 

 

11,056

 

 

 

9,425

 

Foreign exchange contracts sold

 

 

9,600

 

 

 

13,374

 

Equity contracts purchased

 

 

40

 

 

 

49

 

Equity contracts sold

 

 

7

 

 

 

5

 

Other contracts purchased

 

 

1,000

 

 

 

878

 

Other contracts sold

 

 

512

 

 

 

472

 

 

 

 

 

 

 

 

 

 

 

Fair Values of Derivative Instruments

The following table presents our derivative instruments:

 

 

 

 

Derivative

 

 

 

Derivative

 

 

Derivative

 

 

Derivative

 

(In millions)

 

Assets

 

 

 

Liabilities

 

 

Assets

 

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

September 30,

2018

 

 

June 30,

2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Changes in Fair Value Recorded in Other Comprehensive Income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Designated as Hedging Instruments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign exchange contracts

 

$

151

 

 

$

0

 

 

$

174

 

 

$

0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Changes in Fair Value Recorded in Net Income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Designated as Hedging Instruments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign exchange contracts

 

 

97

 

 

 

0

 

 

 

95

 

 

 

0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Not Designated as Hedging Instruments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign exchange contracts

 

 

129

 

 

 

(118

)

 

 

256

 

 

 

(197

)

Equity contracts

 

 

5

 

 

 

(3

)

 

 

2

 

 

 

(7

)

Other contracts

 

 

9

 

 

 

(8

)

 

 

11

 

 

 

(3

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross amounts of derivatives

 

 

391

 

 

 

(129

)

 

 

538

 

 

 

(207

)

Gross amounts of derivatives offset in the balance sheet

 

 

(101

)

 

 

100

 

 

 

(152

)

 

 

153

 

Cash collateral received

 

 

 0

 

 

 

(168

)

 

 

0

 

 

 

(235

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net amounts of derivatives

 

$

290

 

 

$

(197

)

 

$

386

 

 

$

(289

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reported as

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Short-term investments

 

$

109

 

 

$

0

 

 

$

104

 

 

$

0

 

Other current assets

 

 

161

 

 

 

0

 

 

 

260

 

 

 

0

 

Other long-term assets

 

 

20

 

 

 

0

 

 

 

22

 

 

 

0

 

Other current liabilities

 

 

0

 

 

 

(194

)

 

 

0

 

 

 

(288

)

Other long-term liabilities

 

 

0

 

 

 

(3

)

 

 

0

 

 

 

(1

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

$

290

 

 

$

(197

)

 

$

386

 

 

$

(289

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

(In millions)

 

Level 1

 

 

 

Level 2

 

 

Level 3

 

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

September 30, 2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Derivative assets

 

$

1

 

 

$

387

 

 

$

3

 

 

$

391

 

Derivative liabilities

 

 

(1

)

 

 

(128

)

 

 

0

 

 

 

(129

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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 September 30,

 

2018

 

 

2017

 

 

 

 

Foreign exchange contracts

 

$

(30

)

 

$

(69

)

Equity contracts

 

 

1

 

 

 

(29

)

Other contracts

 

 

(4

)

 

 

11

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

$

(33

)

 

$

(87

)

 

 

 

 

 

 

 

 

 

 

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 September 30,

 

2018

 

 

2017

 

 

 

 

Foreign Exchange Contracts

 

 

 

 

 

 

 

 

 

 

 

Derivatives

 

$

  150

 

 

$

  22

 

Hedged items

 

 

  (122

)

 

 

  (2

)

 

 

 

 

 

 

 

 

 

 

 

 

Total amount of ineffectiveness

 

$

28

 

 

$

20

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity Contracts

 

 

 

 

 

 

 

 

 

 

 

Derivatives

 

$

0

 

 

$

(236

)

Hedged items

 

 

0

 

 

 

236

 

 

 

 

 

 

 

 

 

 

 

 

 

Total amount of ineffectiveness

 

$

0

 

 

$

0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amount of equity contracts excluded from effectiveness assessment

 

$

0

 

  

$

40

 

 

 

 

 

 

 

 

 

 

 

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 September 30,

 

2018

 

 

2017

 

 

 

 

Effective Portion

 

 

 

 

 

 

 

 

 

 

 

Gains recognized in other comprehensive income, net of tax of $(1) and $0

 

$

  44

 

 

$

  5

 

Gains reclassified from accumulated other comprehensive income into revenue

 

 

92

 

 

 

111

 

 

 

 

Amount Excluded from Effectiveness Assessment and Ineffective Portion

 

 

 

 

 

 

 

 

 

 

 

Losses recognized in other income (expense), net

 

 

(27

)

 

 

(91

)