Xbox enables people to connect and share online gaming experiences that are accessible on Xbox consoles, Windows-enabled devices, and other devices. All other shares repurchased were under the share repurchase program approved on September 20, 2016. Organizations purchase perpetual licenses and SA is optional. We conducted our audit in accordance with the standards of the PCAOB. Microsoft 365 brings together Office 365, Windows, and Enterprise Mobility + Security to help organizations empower their employees with AI-backed tools that unlock creativity, increase teamwork, and fuel innovation, all the while enabling compliance coverage and data protection. In June 2021, Microsoft announced the next generation of Windows Windows 11. We also have an ESPP for all eligible employees. To ensure accountability over time, we publicly disclose our progress on a multitude of workforce metrics including: We develop dynamic, sustainable, and strategic programs with the goal of providing a highly differentiated portfolio to attract, reward, and retain top talent and enable our employees to do their best work. We exclusively licensed GPT-3, allowing us to leverage its technical innovations to deliver advanced AI solutions for our customers, as well as create new solutions that harness the power of advanced natural language generation. Our devices are designed to enable people and organizations to connect to the people and content that matter most using Windows and integrated Microsoft products and services. Revenue, gross margin, and operating income included a favorable foreign currency impact of 2%, 3%, and 4%, respectively. From our CEO and Senior Leadership Team and throughout our organization, people at Microsoft are working to conduct our business in principled ways that make a significant positive impact on important global issues. We generate revenue by offering a wide range of cloud-based and other services to people and businesses; licensing and supporting an array of software products; designing, manufacturing, and selling devices; and delivering relevant online advertising to a global audience. Finance leases are included in property and equipment, other current liabilities, and other long-term liabilities in our consolidated balance sheets. Therefore, we recorded a net income tax benefit of $620 million in the third quarter of fiscal year 2021 to reflect the results of the India Supreme Court decision impacting fiscal year 1996 through fiscal year 2016. The outcomes of legal proceedings and claims brought against us are subject to significant uncertainty. Artificial intelligence (AI) capabilities are rapidly advancing, fueled by data and knowledge of the world. These events or circumstances could include a significant change in the business climate, legal factors, operating performance indicators, competition, or sale or disposition of a significant portion of a reporting unit. Our competitors are developing new software and devices, while also deploying competing cloud-based services for consumers and businesses. In July 2020, we completed an assessment of the useful lives of our server and network equipment and determined we should increase the estimated useful life of server equipment from three years to four years and increase the estimated useful life of network equipment from two years to four years. Azure is a trusted cloud with comprehensive compliance coverage and AI-based security built in. An estimated loss from a loss contingency such as a legal proceeding or claim is accrued by a charge to income if it is probable that an asset has been impaired or a liability has been incurred and the amount of the loss can be reasonably estimated. Segment. We evaluate our reporting units on an annual basis and, if necessary, reassign goodwill using a relative fair value allocation approach. The metrics are disclosed in the MD&A or the Notes to Financial Statements. 10,610. us-gaap:OperatingIncomeLoss. OEMs also sell devices pre-installed with other Microsoft products and services, including applications such as Office and the capability to subscribe to Office 365. Call us toll-free at (800) 285-7772 or outside the United States, call (425) 706-4400. We bring technology and products together into experiences and solutions that unlock value for our customers. The Zacks Consensus Estimate for revenues is pegged at $50.32 billion, implying growth of 16.82 . Although it may be difficult to imagine in this time of immeasurable hardship and deep uncertainty, I see boundless possibility ahead. The recast of these prior period amounts had no impact on our consolidated balance sheets, consolidated income statements, or consolidated cash flows statements. us-gaap:OperatingIncomeLoss. While these programs may differ in various parts of the world, generally they include those discussed below. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Apple and Microsoft are both great companies to own. Vice Chairman and Executive Vice Sales and marketing expenses include payroll, employee benefits, stock-based compensation expense, and other headcount-related expenses associated with sales and marketing personnel, and the costs of advertising, promotions, trade shows, seminars, and other programs. $90.88. These costs include our internal sales force compensation program and certain partner sales incentive programs as we have determined annual compensation is commensurate with annual sales activities. We are continuing our efforts to extend broadband access to millions of people in rural and underserved communities in the United States and around the globe. Activity in the allowance for doubtful accounts was as follows: Allowance for doubtful accounts included in our consolidated balance sheets: We record financing receivables when we offer certain of our customers the option to acquire our software products and services offerings through a financing program in a limited number of countries. As of June 30, 2021 and 2020, accumulated goodwill impairment was $11.3 billion. Certain forecasted transactions, assets, and liabilities are exposed to foreign currency risk. Dynamics competes with cloud-based and on-premises business solution providers such as Oracle, Salesforce.com, and SAP. Enterprise Services, including Premier Support Services and Microsoft Consulting Services, assist customers in developing, deploying, and managing Microsoft server and desktop solutions and provide training and certification to developers and IT professionals on various Microsoft products. Changes in fair value, excluding credit losses and impairments, are recorded in other comprehensive income. Growth depends on our ability to reach new users in new markets such as frontline workers, small and medium businesses, and growth markets, as well as add value to our core product and service offerings to span productivity categories such as communication, collaboration, analytics, security, and compliance. Our goal is to foster innovation that generates new ecosystems of inventors, partners, developers, creators, changemakers, public servants, frontline workers, and knowledge workers who, together, drive the engines of growth and opportunity in ways that benefit everyone. Enterprise Services revenue increased $534 million or 8% driven by growth in Premier Support Services. To ensure our AI technologies are used responsibly and to avoid unintended consequences, we take a principled approach built on fairness, reliability and safety, privacy and security, inclusiveness, transparency, and accountability. We have served as the Companys auditor since 1983. The following table outlines maturities of our long-term debt, including the current portion, as of June 30, 2021: On December 22, 2017, the Tax Cuts and Jobs Act (TCJA) was enacted into law, which significantly changed existing U.S. tax law and included numerous provisions that affect our business. Ultimately, our culture will determine the lengths of what we will achieve. This change in accounting estimate was effective beginning fiscal year 2021. It also gives us the freedom to decide which modifications and enhancements are most important and when they should be implemented. July 26, 2022. The segment made $ 46. . Extended disruptions at these suppliers could lead to a similar disruption in our ability to manufacture devices on time to meet consumer demand. Their net earnings came in at $2,407 Million, a decrease of 5.6% YoY. In fiscal year 2020, Microsoft reduced its carbon emissions by 587,000 metric tons and purchased the removal of 1.3 million metric tons of carbon. Apple, Google, and Microsoft: revenue comparison 2008-2022; Windows, including Windows OEM licensing and other non-volume licensing of the Windows operating system; Windows Commercial, comprising volume licensing of the Windows operating system, Windows cloud services, and other Windows commercial offerings; patent licensing; Windows Internet of Things; and MSN advertising. The segments enable the alignment of strategies and objectives across the development, sales, marketing, and services organizations, and they provide a framework for timely and rational allocation of resources within businesses. DetailPricingLevelName. The decrease from the federal statutory rate in fiscal year 2021 is primarily due to earnings taxed at lower rates in foreign jurisdictions resulting from producing and distributing our products and services through our foreign regional operations centers in Ireland and Puerto Rico, tax benefits relating to stock-based compensation, and tax benefits from the India Supreme Court decision on withholding taxes. Introduced in November 2020, the new Xbox Series S and X are our fastest-selling consoles ever. Metrics related to our Productivity and Business Processes and Intelligent Cloud segments assess the health of our core businesses within these segments. At Microsoft we have an inherently inclusive mission: to empower every person and every organization on the planet to achieve more. Revenue allocated to SA is generally recognized ratably over the contract period as customers simultaneously consume and receive benefits, given that SA comprises distinct performance obligations that are satisfied over time. You can also send mail to the transfer agent at: Shareholders can sign up for electronic alerts to access the annual report and proxy statement online. The service gets you the information you need faster and also gives you the power and convenience of online proxy voting. Net gains on derivatives decreased due to lower gains on foreign currency contracts. Microsoft Mobile Oy, a subsidiary of Microsoft, along with other handset manufacturers and network operators, is a defendant in 46 lawsuits, including 45 lawsuits filed in the Superior Court for the District of Columbia by individual plaintiffs who allege that radio emissions from cellular handsets caused their brain tumors and other adverse health effects. Property and equipment is stated at cost less accumulated depreciation, and depreciated using the straight-line method over the shorter of the estimated useful life of the asset or the lease term. Marketing Solutions competes with online and offline outlets that generate revenue from advertisers and marketers, and Sales Solutions competes with online and offline outlets for companies with lead generation and customer intelligence and insights. Awards that expire or are canceled without delivery of shares generally become available for issuance under the plans. Net realizable value is the estimated selling price less estimated costs of completion, disposal, and transportation. From Visual Studio to GitHub, we deliver the best tools for moving quickly from idea to code and from code to the cloud. Basic earnings per share (EPS) is computed based on the weighted average number of shares of common stock outstanding during the period. Our Enterprise Services business competes with a wide range of companies that provide strategy and business planning, application development, and infrastructure services, including multinational consulting firms and small niche businesses focused on specific technologies. We support the fundamental rights of all people. The plaintiffs allege that their handsets either operated outside the FCC Guidelines or were manufactured before the FCC Guidelines went into effect. We typically have more than one SSP for individual products and services due to the stratification of those products and services by customers and circumstances. The mix of computing devices based on form factor and screen size. Debt investments are classified as available-for-sale and realized gains and losses are recorded using the specific identification method. Office 365 Commercial revenue grew 22% driven by seat growth of 17% and higher revenue per user. We think of diversity and inclusion as core to our business model, informing our actions to impact economies and people around the world. The fair value of stock awards vested was $13.4 billion, $10.1 billion, and $8.7 billion, for fiscal years 2021, 2020, and 2019, respectively. All share repurchases were made using cash resources. Certain forecasted transactions, assets, and liabilities are exposed to foreign currency risk. The components of intangible assets, all of which are finite-lived, were as follows: No material impairments of intangible assets were identified during fiscal years 2021, 2020, or 2019. In addition, we consider specific adverse conditions related to the financial health of, and business outlook for, the investee. As of June 30, 2021, we employed approximately 181,000 people on a full-time basis, 103,000 in the U.S. and 78,000 internationally. The fair value of stock awards was estimated on the date of grant using the following assumptions: During fiscal year 2021, the following activity occurred under our stock plans: As of June 30, 2021, there was approximately $12.0 billion of total unrecognized compensation costs related to stock awards. Microsoft 365 Consumer subscribers increased 22% to 51.9 million. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Competing cloud-based Services for consumers and businesses or outside the United States, call ( )! Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements other! And screen size Xbox enables people to connect and share online gaming experiences that are accessible on Xbox consoles Windows-enabled. The United States, call ( 425 ) 706-4400 consolidated balance sheets are rapidly advancing, by... 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