Note 6 - Fair Value Measurements
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 |
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| June 30, 2013 | |||||||||||
| Assets | |||||||||||
| Mutual funds | $ 868 | $ 0 | $ 0 | $ 868 | $ 0 | $ 868 | |||||
| Commercial paper | 0 | 603 | 0 | 603 | 0 | 603 | |||||
| Certificates of deposit | 0 | 994 | 0 | 994 | 0 | 994 | |||||
| U.S. government and agency securities | 62,237 | 2,664 | 0 | 64,901 | 0 | 64,901 | |||||
| Foreign government bonds | 9 | 851 | 0 | 860 | 0 | 860 | |||||
| Mortgage-backed securities | 0 | 1,311 | 0 | 1,311 | 0 | 1,311 | |||||
| Corporate notes and bonds | 0 | 4,915 | 19 | 4,934 | 0 | 4,934 | |||||
| Municipal securities | 0 | 385 | 0 | 385 | 0 | 385 | |||||
| Common and preferred stock | 8,470 | 717 | 5 | 9,192 | 0 | 9,192 | |||||
| Derivatives | 12 | 489 | 0 | 501 | (81) | 420 | |||||
| Total | $ 71,596 | $ 12,929 | $ 24 | $ 84,549 | $ (81) | $ 84,468 | |||||
| Liabilities | |||||||||||
| Derivatives and other | $ 14 | $ 121 | $ 0 | $ 135 | $ (80) | $ 55 | |||||
| (In millions) | Level 1 | Level 2 | Level 3 | Gross Fair Value |
Netting (a) | Net Fair Value |
|||||
| June 30, 2012 | |||||||||||
| Assets | |||||||||||
| Mutual funds | $ 820 | $ 0 | $ 0 | $ 820 | $ 0 | $ 820 | |||||
| Commercial paper | 0 | 96 | 0 | 96 | 0 | 96 | |||||
| Certificates of deposit | 0 | 744 | 0 | 744 | 0 | 744 | |||||
| U.S. government and agency securities | 42,291 | 5,019 | 0 | 47,310 | 0 | 47,310 | |||||
| Foreign government bonds | 31 | 1,703 | 0 | 1,734 | 0 | 1,734 | |||||
| Mortgage-backed securities | 0 | 1,892 | 0 | 1,892 | 0 | 1,892 | |||||
| Corporate notes and bonds | 0 | 7,839 | 9 | 7,848 | 0 | 7,848 | |||||
| Municipal securities | 0 | 416 | 0 | 416 | 0 | 416 | |||||
| Common and preferred stock | 7,539 | 877 | 5 | 8,421 | 0 | 8,421 | |||||
| Derivatives | 16 | 467 | 0 | 483 | (141) | 342 | |||||
| Total | $ 50,697 | $ 19,053 | $ 14 | $ 69,764 | $ (141) | $ 69,623 | |||||
| Liabilities | |||||||||||
| Derivatives and other | $ 10 | $ 145 | $ 0 | $ 155 | $ (139) | $ 16 |
(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, | 2013 | 2012 | |
| Net fair value of assets measured at fair value on a recurring basis | $ 84,468 | $ 69,623 | |
| Cash | 1,967 | 2,019 | |
| Common and preferred stock measured at fair value on a nonrecurring basis | 395 | 313 | |
| Other investments measured at fair value on a nonrecurring basis | 1,256 | 1,043 | |
| Less derivative assets classified as other current assets | (213) | (185) | |
| Other | (7) | 3 | |
| Recorded basis of investment components | $ 87,866 | $ 72,816 |
Financial Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis
During fiscal year 2013 and 2012, we did not record any material other-than-temporary impairments on financial assets required to be measured at fair value on a nonrecurring basis.
