Cash Flows Statements

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CASH FLOWS STATEMENTS

(In millions)          
Year Ended June 30, 2011   2010   2009
Operations          
Net income $       23,150   $       18,760   $       14,569
Adjustments to reconcile net income to net cash from operations:          
Depreciation, amortization, and other            2,766              2,673              2,562
Stock-based compensation expense            2,166              1,891              1,708
Net recognized losses (gains) on investments and derivatives              (362 )                (208 )                 683
Excess tax benefits from stock-based compensation               (17 )                 (45 )                 (52 )
Deferred income taxes                  2                (220 )                 762
Deferral of unearned revenue          31,227            29,374            24,409
Recognition of unearned revenue         (28,935 )           (28,813 )           (25,426 )
Changes in operating assets and liabilities:          
Accounts receivable           (1,451 )             (2,238 )              2,215
Inventories              (561 )                 (44 )                 255
Other current assets           (1,259 )                 464                (677 )
Other long-term assets                62                (223 )                (273 )
Accounts payable                58                 844                (671 )
Other current liabilities           (1,146 )                 451             (2,700 )
Other long-term liabilities            1,294              1,407              1,673
Net cash from operations          26,994            24,073            19,037
Financing          
Short-term debt borrowings (repayments), maturities of 90 days or less, net              (186 )                (991 )              1,178
Proceeds from issuance of debt, maturities longer than 90 days            6,960              4,167              4,796
Repayments of debt, maturities longer than 90 days              (814 )             (2,986 )                (228 )
Common stock issued            2,422              2,311                 579
Common stock repurchased         (11,555 )           (11,269 )             (9,353 )
Common stock cash dividends paid           (5,180 )             (4,578 )             (4,468 )
Excess tax benefits from stock-based compensation                17                  45                  52
Other               (40 )                  10                 (19 )
Net cash used in financing           (8,376 )           (13,291 )             (7,463 )
Investing          
Additions to property and equipment           (2,355 )             (1,977 )             (3,119 )
Acquisition of companies, net of cash acquired               (71 )                (245 )                (868 )
Purchases of investments         (35,993 )           (30,168 )           (36,850 )
Maturities of investments            6,897              7,453              6,191
Sales of investments          15,880            15,125            19,806
Securities lending payable            1,026             (1,502 )                (930 )
Net cash used in investing         (14,616 )           (11,314 )           (15,770 )
Effect of exchange rates on cash and cash equivalents               103                 (39 )                 (67 )
Net change in cash and cash equivalents            4,105                (571 )             (4,263 )
Cash and cash equivalents, beginning of period            5,505              6,076            10,339
Cash and cash equivalents, end of period $         9,610   $         5,505   $         6,076

See accompanying notes.