company profile of microsoft
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Company Profile of Microsoft
Introduction (History)
Microsoft is a multinational computer technology corporation. The history of Microsoft beganon April 4, 1975 and is headquartered in Redmond, Washington, when it was founded by BillGates and Paul Allen in Albuquerque. Its current best-selling products are the MicrosoftWindows operating system and the Microsoft Office suite of productivity software.
Starting in 1980, Microsoft formed an important partnership with IBM that allowed them to bundle Microsoft's operating system with computers that they sold, paying Microsoft a royaltyfor every sale. In 1985, IBM requested that Microsoft write a new operating system for their computers called OS/2; Microsoft wrote the operating system, but also continued to sell their own alternative, which proved to be in direct competition with OS/2. Microsoft Windowseventually overshadowed OS/2 in terms of sales. When Microsoft launched several versions of Microsoft Windows in the 1990s, they had captured over 90% market share of the world's
personal computers.
The company has now become largely successful. As of 2008, Microsoft has global annualrevenue of US$ 60.42 billion and nearly 90,000 employees in 105 countries. It develops,manufactures, licenses, and supports a wide range of software products for computing devices.
Microsoft has acquired 128 companies, purchased stakes in 60 companies, and made 24divestments. Of the companies that Microsoft has acquired, 99 were based in the United States.Microsoft's first acquisition was Forethought on June 29, 1987, which was founded in 1983 anddeveloped a presentation program that would later be known as Microsoft PowerPoint. Till nowMicrosoft’s last acquisition is in 10 December 2009, the Company acquired Opalis Software Incand Sentillion Inc.
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Vision and Mission Statement
Microsoft is motivated and inspired every day by how its customers use our software to findcreative solutions to business problems, develop breakthrough ideas, and stay connected towhat's most important to them.
They are committed long term to the mission of helping our customers realize their full potential. They constantly update and improve their products; they want to continually evolvetheir company to be in the best position to accelerate new technologies as they emerge and to
better serve their customers.
To do so technological innovations is the foundation of their long-term growth and intend tomaintain their commitment to investment in research and development, engineering excellence,
and delivering high-quality products and services to customers and partners. They continue todevelop innovative software applications and solutions that they believe will enhanceinformation worker productivity, improve communication and collaboration in work groups, aid
business intelligence, and streamline processes for small and mid-sized businesses. To sustaingrowth in the face of competition from other vendors of proprietary and open source software,our goal is to deliver products that provide the best platform for network computing – softwarethat is easiest to deploy and manage, and that is most secure – with the lowest total cost of ownership.
In addition, they continue to invest in research and development in existing and new lines of business, including cloud computing, search, online solutions, business solutions, mobilecomputing, communication, entertainment, and other areas that they believe may contribute to
our long-term growth.
They also invest in research and development of advanced technologies for future software products. They believe that delivering innovative and high-value solutions through their integrated platform is the key to meeting customer needs and to their future growth.
This long-term focus on investment in research and development has enabled them to lay afoundation for future growth by delivering innovative products, creating opportunities for
partners, and improving customer satisfaction. They focus in fiscal year 2011 is to build on thisfoundation and to continue to execute well in key areas through ongoing innovation on their integrated software platform, by responding effectively to customer and partner needs, and byfocusing internally on product excellence, business efficacy, and accountability across the
company.
Corporate governance at Microsoft serves several purposes:
Establish and preserve management accountability to Microsoft's owners byappropriately distributing rights and responsibilities among Microsoft Board members,managers, and shareholders.
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Provide a structure through which management and the Board set objectives and monitor performance.
Strengthen and safeguard their culture of business integrity and responsible business practices.
Encourage the efficient use of resources, and to require accountability for stewardship of
those resources.
Service/Product
Microsoft Corporation, incorporated in 1981, is engaged in developing, manufacturing, licensingand supporting a range of software products and services for different types of computingdevices. The Company’s software products and services include operating systems for personalcomputers, servers and intelligent devices; server applications for distributed computingenvironments; information worker productivity applications; business solutions applications;computing applications; software development tools, and video games. It operates in fivesegments:
Windows & Windows Live Division: Includes the Windows product family and is
responsible for our relationships with personal computer manufacturers as well as onlinesoftware and services through Windows Live.
Server and Tools: Software server products, services and solutions, including: WindowsServer operating system, Microsoft SQL Server, Visual Studio, Silverlight, SystemCenter products, Forefront security products, Biz Talk Server, and Microsoft ConsultingServices.
Online Services Division: Consists of an online advertising platform with offerings for publishers and advertisers, and online information offerings such as Bing and the MSN portals and channels.
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Microsoft Business Division: Includes the Microsoft Office suites, desktop programs,servers, and services and solutions; Microsoft Dynamics; and Unified Communications
business solutions.
Entertainment and Devices Division: Consists of the Xbox video game system, including
consoles and accessories, Xbox Live operations, Zune digital music and entertainment device;Mediaroom, mobile and embedded device platforms, Surface computing platform, and
Windows Automotive.
Industry analysis
Stock Data: Recent Stock Performance:
Current Price (3/25/2011): 25.62
(Figures in U.S. Dollars)
1 Week 3.3% 13 Weeks -3.5%
4 Weeks -9.5% 52 Weeks -13.6%
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Top Application Software Companies by Market Cap
Company Symbol Price Change Market Cap P/E
Microsoft Corporation MSFT 25.49 0.86% 213.34B 10.88
Oracle Corp. ORCL 33.53 1.16% 168.91B 25.21
SAP AG SAP 61.37 0.03% 72.83B 28.66
Adobe Systems Inc. ADBE 33.23 0.64% 16.72B 19.65
Salesforce.com CRM 133.28 0.68% 17.76B 283.57
Intuit Inc. INTU 52.76 1.78% 16.07B 31.98
MSFT vs. Industry Leaders
Statistic Industry Leader MSFT MSFT Rank
Market Capitalization MSFT 213.34B - 1 / 92
P/E Ratio (ttm) CRM 283.57 10.88 39 / 92
PEG Ratio (ttm, 5 yr expected) VTAL 14.23 0.98 34 / 92
Revenue Growth (Qtrly YoY) STV 140.00% 4.90% 52 / 92
EPS Growth (Qtrly YoY) QADA 860.00% 4.10% 27 / 92
Long-Term Growth Rate (5 yr) AMAP 35.00% 10.23% 46 / 92
Return on Equity (ttm) RNOW 47.38% 44.35% 2 / 92
Long-Term Debt/Equity (mrq) 19.960 N/A
Dividend Yield (annual) AMSWA 5.00% 2.50% 3 / 92
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Abbreviation Guide:
MSFT = Microsoft Corporation
CRM = Salesforce.com Inc
VTAL = Vital Images, Inc
STV = China Digital TV Holding Co. Ltd.
QADA = QAD Inc.
AMAP = AutoNavi Holdings Limited.
RNOW = RightNow Technologies, Inc.
AMSWA = American Software, Inc.
Key Statistics
Data provided by Capital IQ , except where noted.
Valuation Measures
Market Cap (intraday)5: 213.34B
Enterprise Value (Mar 31, 2011)3: 184.30B
Trailing P/E (ttm, intraday): 10.84
Forward P/E (fye Jun 30, 2012)1: 9.20
PEG Ratio (5 yr expected)1: 0.98
Price/Sales (ttm): 3.23
Price/Book (mrq): 4.44
Enterprise Value/Revenue (ttm)3: 2.76
Enterprise Value/EBITDA (ttm)3: 6.23
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Financial Highlights
Fiscal Year
Fiscal Year Ends: Jun 30
Most Recent Quarter (mrq): Dec 31, 2010
Profitability
Profit Margin (ttm): 30.84%
Operating Margin (ttm): 40.45%
Management Effectiveness
Return on Assets (ttm): 19.34%
Return on Equity (ttm): 44.35%
Income Statement
Revenue (ttm): 66.69B
Revenue Per Share (ttm): 7.71
Qtrly Revenue Growth (yoy): 4.90%
Gross Profit (ttm): 50.09B
EBITDA (ttm): 29.58B
Net Income Avl to Common (ttm): 20.57B
Diluted EPS (ttm): 2.34
Qtrly Earnings Growth (yoy): -0.40%
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Balance Sheet
Total Cash (mrq): 39.98B
Total Cash Per Share (mrq): 4.76
Total Debt (mrq): 9.68B
Total Debt/Equity (mrq): 19.96
Current Ratio (mrq): 2.46
Book Value Per Share (mrq): 5.77
Cash Flow Statement
Operating Cash Flow (ttm): 25.38B
Levered Free Cash Flow (ttm): 17.55B
Trading Information
Stock Price History
Beta: 0.95
52-Week Change3: -12.56%
S&P500 52-Week Change3: 13.58%
52-Week High (Apr 23, 2010)3: 31.58
52-Week Low (Jul 1, 2010)3: 22.73
50-Day Moving Average3: 26.17
200-Day Moving Average3: 26.49
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Share Statistics
Avg Vol (3 month)3: 59,822,000
Avg Vol (10 day)3: 43,650,600
Shares Outstanding5: 8.40B
Float: 7.41B
% Held by Insiders6: 12.01%
% Held by Institutions6: 64.70%
Shares Short (as of Feb 28, 2011)3: 86.23M
Short Ratio (as of Feb 28, 2011)
3
: 1.40
Short % of Float (as of Feb 28, 2011)3: 1.10%
Shares Short (prior month)3: 87.86M
Dividends & Splits
Forward Annual Dividend Rate4
: 0.64
Forward Annual Dividend Yield4: 2.50%
Trailing Annual Dividend Yield3: 0.58
Trailing Annual Dividend Yield3: 2.30%
5 Year Average Dividend Yield4: 1.80%
Payout Ratio4: 23.00%
Dividend Date3: Jun 8, 2011
Ex-Dividend Date4: May 17, 2011
Last Split Factor (new per old)2: 2:1
Last Split Date3: Feb 18, 2003
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Abbreviation Guide:
K = Thousands; M = Millions; B = Billions
mrq = Most Recent Quarter (as of Dec 31, 2010)ttm = Trailing Twelve Months (as of Dec 31, 2010)
yoy = Year Over Year (as of Dec 31, 2010)
lfy = Last Fiscal Year (as of Jun 30, 2010)
fye = Fiscal Year Ending1
Data provided by Thomson2
Data provided by EDGAR Online3
Data derived from multiple sources or calculated by Yahoo! Finance4
Data provided by Morningstar, Inc.5
Shares outstanding is taken from the most recently filed quarterly or annual report and Market Cap is calculated
using shares outstanding.6
Data provided by Computershare
Currency in USD.
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Analyst Estimates
Earnings Estimated Current Qtr.Mar 11
Next Qtr.Jun 11
Current YearJun 11
Next YearJun 12
Avg. Estimate 0.56 0.60 2.55 2.76
No. of Analysts 29.00 29.00 34.00 32.00
Low Estimate 0.49 0.53 2.40 2.55
High Estimate 0.61 0.65 2.64 2.92
Year Ago EPS 0.45 0.51 2.10 2.55
Next Earnings Date: Apr 28, 2011
Revenue Estimated
Current Qtr.
Mar 11
Next Qtr.
Jun 11
Current Year
Jun 11
Next Year
Jun 12
Avg. Estimate 16.30B 17.52B 69.72B 74.15B
No. of Analysts 27 27 30 31
Low Estimate 15.84B 16.82B 68.68B 71.32B
High Estimate 17.44B 20.16B 70.85B 77.26B
Year Ago Sales 14.50B 16.04B 62.48B 69.72B
Sales Growth (year/est) 12.40% 9.20% 11.60% 6.40%
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Earnings History Mar 10 Jun 10 Sep 10 Dec 10
EPS Est 0.42 0.46 0.55 0.68
EPS Actual 0.45 0.51 0.62 0.77
Difference 0.03 0.05 0.07 0.09
Surprise % 7.10% 10.90% 12.70% 13.20%
EPS Trends
Current Qtr.
Mar 11
Next Qtr.
Jun 11
Current Year
Jun 11
Next Year
Jun 12
Current Estimate 0.56 0.60 2.55 2.76
7 Days Ago 0.56 0.60 2.55 2.76
30 Days Ago 0.56 0.60 2.55 2.76
60 Days Ago 0.55 0.60 2.45 2.69
90 Days Ago 0.56 0.60 2.45 2.69
EPS Revisions
Current Qtr.
Mar 11
Next Qtr.
Jun 11
Current Year
Jun 11
Next Year
Jun 12
Up Last 7 Days 0 0 0 1
Up Last 30 Days 0 1 0 1
Down Last 30 Days 0 0 0 0
Down Last 90 Days N/A N/A N/A N/A
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Growth Estimated MSFT Industry Sector S&P 500
Current Qtr. 24.40% 20.70% 32.30% 22.70%
Next Qtr. 17.60% 28.50% 31.40% 31.10%
This Year 21.40% 26.50% 25.90% 18.00%
Next Year 8.20% 25.30% 22.30% 12.90%
Past 5 Years (per annum) 13.62% N/A N/A N/A
Next 5 Years (per annum) 10.23% 18.78% 18.74% 10.18%
Price/Earnings (avg. for
comparison categories) 10.00 23.37 19.50 13.37
PEG Ratio (avg. for
comparison categories)0.98 1.29 1.36 1.20
Currency in USD.
Major Holders
Breakdown
% of Shares Held by All Insider and 5% Owners: 12%
% of Shares Held by Institutional & Mutual Fund Owners: 65%
% of Float Held by Institutional & Mutual Fund Owners: 74%
Number of Institutions Holding Shares: 1771
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Major Direct Holders
Holder Shares Reported
GATES WILLIAM H III 580,976,087 Feb 15, 2011
BALLMER STEVEN A 333,252,990 Nov 23, 2010
MARQUARDT DAVID F 1,180,243 Feb 15, 2011
OZZIE RAYMOND E 998,739 Nov 18, 2009
SINOFSKY STEVEN J 737,951 Jan 27, 2011
Top Institutional Holders
Holder Shares % Out Value* Reported
Capital Research Global Investors 306,154,198 3.64 8,544,763,666 Dec 31, 2010
VANGUARD GROUP, INC. (THE) 286,630,111 3.41 7,999,846,398 Dec 31, 2010
BlackRock Institutional Trust Company,
N.A.
202,049,526 2.40 5,639,202,270 Dec 31, 2010
Capital World Investors 174,408,700 2.08 4,867,746,817 Dec 31, 2010
JP MORGAN CHASE & COMPANY 141,270,955 1.68 3,942,872,354 Dec 31, 2010
Bank of New York Mellon Corporation 115,986,472 1.38 3,237,182,433 Dec 31, 2010
NORTHERN TRUST CORPORATION 99,657,062 1.19 2,781,428,600 Dec 31, 2010
FRANKLIN RESOURCES, INC 90,767,250 1.08 2,533,313,947 Dec 31, 2010
Invesco Ltd. 89,260,254 1.06 2,491,253,689 Dec 31, 2010
GOLDMAN SACHS GROUP INC 87,226,881 1.04 2,434,502,248 Dec 31, 2010
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Top Mutual Fund Holders
Holder Shares % Out Value* Reported
GROWTH FUND OF AMERICA INC 127,840,100 1.52 3,568,017,191 Dec 31, 2010
INVESTMENT COMPANY OF AMERICA 88,265,800 1.05 2,463,498,478 Dec 31, 2010
VANGUARD TOTAL STOCK MARKET
INDEX FUND82,156,540 0.98 2,292,989,031 Dec 31, 2010
VANGUARD 500 INDEX FUND 67,413,857 0.80 1,881,520,748 Dec 31, 2010
CAPITAL WORLD GROWTH AND
INCOME FUND67,005,000 0.80 1,870,109,550 Dec 31, 2010
VANGUARD INSTITUTIONAL INDEX
FUND-INSTITUTIONAL INDEX FD57,930,059 0.69 1,616,827,946 Dec 31, 2010
SPDR S&P 500 ETF Trust 57,576,043 0.69 1,410,037,293 Sep 30, 2010
COLLEGE RETIREMENT EQUITIES FUND-
STOCK ACCOUNT43,117,137 0.51 1,055,938,685 Sep 30, 2010
VANGUARD/WINDSOR II 35,593,640 0.42 949,282,378 Oct 31, 2010
Powershares Exhg Traded Fd Tr-
Powershares QQQ Tr, Series 1 34,619,884 0.41 847,840,959 Sep 30, 2010
Value shown is computed using the security's price on the report date given.
Currency in USD.
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Insider Transactions
Net Share Purchase Activity
Insider Purchases - Last 6 Months
Shares Trans
Purchases N/A 0
Sales 62,875,300 40
Net Shares Purchased
(Sold)(62,875,300) 40
Total Insider Shares Held 1.01B N/A
% Net Shares Purchased
(Sold)(5.9%) N/A
Net Institutional Purchases - Prior Qtr to Latest Qtr
Shares
Net Shares Purchased
(Sold)(90,881,100)
% Change in Institutional Shares Held (1.7%)
Data provided by Thomson Financial
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Competitor analysis
Top Microsoft Corporation Competitors
Google IBM Oracle ACCESS Adobe Apple
Industries Where Microsoft Corporation Competes
Development Tools, Operating Systems & Utilities Software Computer Hardware Computer Peripherals Computer Input Devices & Speakers Computer Services Information Technology Services
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Software Companies Ranked By Sales
Company Symbol Price Change Market Cap P/E
Microsoft Corporation MSFT 25.47 -0.55% 214.01B 10.87
Oracle Corp. ORCL 33.35 0.89% 168.47B 25.07
SAP AG SAP 61.42 0.07% 72.91B 28.69
CA Technologies CA 24.01 0.63% 12.25B 16.74
SOWT analysis
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Some of the key issues facing Microsoft as it aim to maintain past successes include thefollowing.
Synergies
In the past, Microsoft has been extremely successful in developing new products by promoting,or bundling, them with existing brands. The Windows operating system is perhaps the bestexample of this, where applications such as Internet Explorer and Media Player have becomeindustry benchmarks due to their out of the box availability. By exploiting the monopoly power it has on PC operating software, it is in a position to influence the success of strategic areas of future performance. In an industry where the battleground for future dominance in thetechnology industry is likely to be aggressively fought, as companies increasingly move towardswholly integrated media devices, the strategic advantage of such a means cannot be overstated.
Legal Lawsuits
Due to an observed monopoly Microsoft enjoys in the home PC market, it could be consideredinevitable that competitors will seek to undermine or diminish this power though legal means. Itis, however, stated in Microsoft’s 2004 annual report that major progress has been made to stemlegal action and improve relations with governments. Nevertheless, the threat of lawsuitsremains one of the greatest threats to Microsoft’s current monopoly of its market position.
Current examples:
Recent payment to RealNetworks, Inc. ($361 million)
Recent Novell settlement
Emerging Online Brands
The emergence of online global brands has led to strong competition, particularly within themedia market, a developing Microsoft market according to Hoover (2005). Google and othersare increasingly bringing a greater range of products to the market, many of which directlycompete with Microsoft’s own product portfolios.
What perhaps differentiates Microsoft from many of its more traditional competitors such asIBM is its globalised nature. Anholt (2000), as cited by Fill (2002) suggests that by usingtechnology in place of more traditional physical distribution channels Microsoft was able tonegate the inefficiencies associated with the latter. Upcoming online brands, on the other hand,do not suffer the same traditional barriers, and may in time create better conditions to competeeffectively with Microsoft.
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Finance (Balance Sheet, Income Statement)
Microsoft Corporation Income Statement
Jun 10 Jun 09 Jun 08
Revenue 62,484.0 58,437.0 60,420.0
Cost of Goods Sold 12,395.0 12,155.0 11,598.0
Gross Profit 50,089.0 46,282.0 48,822.0
Gross Profit Margin 80.2% 79.2% 80.8%
SG&A Expense 17,277.0 16,909.0 18,166.0
Depreciation & Amortization 2,673.0 2,562.0 2,056.0
Operating Income 24,098.0 20,363.0 22,492.0
Operating Margin 38.6% 34.8% 37.2%
Non operating Income 223.0 (1,248.0) 434.0
Non operating Expenses 692.0 706.0 --
Income Before Taxes 25,013.0 19,821.0 23,814.0
Income Taxes 6,253.0 5,252.0 6,133.0
Net Income After Taxes 18,760.0 14,569.0 17,681.0
Continuing Operations 18,760.0 14,569.0 17,681.0
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Discontinued Operations -- -- --
Total Operations 18,760.0 14,569.0 17,681.0
Total Net Income 18,760.0 14,569.0 17,681.0
Net Profit Margin 30% 24.9% 29.3%
Diluted EPS from Total Net Income 2.10 1.62 1.87
Dividends per Share 0.52 0.50 0.43
All amounts in millions of US Dollars except per share amounts.
Microsoft Corporation Balance Sheet
Assets Jun 10 Jun 09 Jun 08
Current Assets
Cash 5,505.0 6,076.0 10,339.0
Net Receivables 13,014.0 11,192.0 13,589.0
Inventories 740.0 717.0 985.0
Other Current Assets 36,417.0 31,295.0 18,329.0
Total Current Assets 55,676.0 49,280.0 43,242.0
Net Fixed Assets 7,630.0 7,535.0 6,242.0
Other Noncurrent Assets 22,807.0 21,073.0 23,309.0
Total Assets 86,113.0 77,888.0 72,793.0
Liabilities Jun 10 Jun 09 Jun 08
Current Liabilities
Accounts Payable 4,025.0 3,324.0 4,034.0
Short-Term Debt 1,000.0 2,000.0 --
Other Current Liabilities 21,122.0 21,710.0 25,852.0
Total Current Liabilities 26,147.0 27,034.0 29,886.0
Long-Term Debt 4,939.0 3,746.0 --
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Other Noncurrent Liabilities 8,852.0 7,550.0 6,621.0
Total Liabilities 39,938.0 38,330.0 36,507.0
Shareholder's Equity
Preferred Stock Equity -- -- --
Common Stock Equity 46,175.0 39,558.0 36,286.0
Total Equity 46,175.0 39,558.0 36,286.0
Shares Outstanding (thou.) 8,668,000.0 8,908,000.0 9,313,293.0
All amounts in millions of US Dollars except per share amounts.
Microsoft Corporation Cash Flow Statement
Jun 10 Jun 09 Jun 08
Net Operating Cash Flow 24,073 19,037 21,612
Net Investing Cash Flow (11,314.0) (15,770.0) (4,587.0)
Net Financing Cash Flow (13,291.0) (7,463.0) (12,934.0)
Net Change in Cash (571.0) (4,263.0) 4,228.0
Depreciation & Amortization 2,673.0 2,562.0 2,056.0
Capital Expenditures (1,977.0) (3,119.0) (3,182.0)
Cash Dividends Paid (4,578.0) (4,468.0) (4,015.0)
All amounts in millions of US Dollars except per share amounts.
Financial Statements in another format
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Income Statement
All numbers in thousands
Period Ending Jun 30, 2010 Jun 30, 2009 Jun 30, 2008
Total Revenue 62,484,000 58,437,000 60,420,000
Cost of Revenue 12,395,000 12,155,000 11,598,000
Gross Profit 50,089,000 46,282,000 48,822,000
Operating Expenses
Research Development 8,714,000 9,010,000 8,164,000
Selling General and Administrative 17,277,000 16,909,000 18,166,000
Non Recurring - 330,000 -
Others - - -
Total Operating Expenses - - -
Operating Income or Loss 24,098,000 20,363,000 22,492,000
Income from Continuing Operations
Total Other Income/Expenses Net 915,000 (542,000) 1,322,000
Earnings Before Interest And Taxes 25,013,000 19,821,000 23,814,000
Interest Expense - - -
Income Before Tax 25,013,000 19,821,000 23,814,000
Income Tax Expense 6,253,000 5,252,000 6,133,000
Minority Interest - - -
Net Income From Continuing Ops 18,760,000 14,569,000 17,681,000
Non-recurring Events
Discontinued Operations - - -
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Extraordinary Items - - -
Effect Of Accounting Changes - - -
Other Items - - -
Net Income 18,760,000 14,569,000 17,681,000
Preferred Stock And Other Adjustments - - -
Net Income Applicable To Common Shares 18,760,000 14,569,000 17,681,000
Currency in USD.
Balance Sheet
All numbers in thousands
Period Ending Jun 30, 2010 Jun 30, 2009 Jun 30, 2008
Assets
Current Assets
Cash And Cash Equivalents 5,505,000 6,076,000 10,339,000
Short Term Investments 31,283,000 25,371,000 13,323,000
Net Receivables 15,198,000 13,405,000 15,606,000
Inventory 740,000 717,000 985,000
Other Current Assets 2,950,000 3,711,000 2,989,000
Total Current Assets 55,676,000 49,280,000 43,242,000
Long Term Investments 7,754,000 4,933,000 6,588,000
Property Plant and Equipment 7,630,000 7,535,000 6,242,000
Goodwill 12,394,000 12,503,000 12,108,000
Intangible Assets 1,158,000 1,759,000 1,973,000
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Accumulated Amortization - - -
Other Assets 1,501,000 1,599,000 1,691,000
Deferred Long Term Asset Charges - 279,000 949,000
Total Assets 86,113,000 77,888,000 72,793,000
Liabilities
Current Liabilities
Accounts Payable 8,564,000 8,889,000 12,830,000
Short/Current Long Term Debt 1,000,000 2,000,000 -
Other Current Liabilities 16,583,000 16,145,000 17,056,000
Total Current Liabilities 26,147,000 27,034,000 29,886,000
Long Term Debt 4,939,000 3,746,000 -
Other Liabilities 7,445,000 6,269,000 6,621,000
Deferred Long Term Liability Charges 1,407,000 1,281,000 -
Minority Interest - - -
Negative Goodwill - - -
Total Liabilities 39,938,000 38,330,000 36,507,000
Stockholders' Equity
Misc Stocks Options Warrants - - -
Redeemable Preferred Stock - - -
Preferred Stock - - -
Common Stock 62,856,000 62,382,000 62,849,000
Retained Earnings (16,681,000) (22,824,000) (26,563,000)
Treasury Stock - - -
Capital Surplus - - -
Other Stockholder Equity - - -
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Total Stockholder Equity 46,175,000 39,558,000 36,286,000
Net Tangible Assets 32,623,000 25,296,000 22,205,000
Currency in USD.
Cash Flow
All numbers in thousands
Period Ending Jun 30, 2010 Jun 30, 2009 Jun 30, 2008
Net Income 18,760,000 14,569,000 17,681,000
Operating Activities, Cash Flows Provided By or Used In
Depreciation 2,673,000 2,562,000 2,056,000
Adjustments To Net Income 1,979,000 2,084,000 1,722,000
Changes In Accounts Receivables (2,238,000) 2,215,000 (1,569,000)
Changes In Liabilities 2,702,000 (1,698,000) 1,667,000
Changes In Inventories - - -
Changes In Other Operating Activities 197,000 (695,000) 55,000
Total Cash Flow From Operating Activities 24,073,000 19,037,000 21,612,000
Investing Activities, Cash Flows Provided By or Used In
Capital Expenditures (1,977,000) (3,119,000) (3,182,000)
Investments (7,590,000) (10,853,000) 6,648,000
Other Cash flows from Investing Activities (1,747,000) (1,798,000) (8,053,000)
Total Cash Flows From Investing Activities (11,314,000) (15,770,000) (4,587,000)
Financing Activities, Cash Flows Provided By or Used In
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Dividends Paid (4,578,000) (4,468,000) (4,015,000)
Sale Purchase of Stock (8,958,000) (8,774,000) (9,039,000)
Net Borrowings 190,000 5,746,000 -
Other Cash Flows from Financing Activities 10,000 (19,000) 120,000
Total Cash Flows From Financing Activities (13,291,000) (7,463,000) (12,934,000)
Effect Of Exchange Rate Changes (39,000) (67,000) 137,000
Change In Cash and Cash Equivalents (571,000) (4,263,000) 4,228,000
Currency in USD.
Current Event/News
Cloud Friendly' US Cities
Microsoft interviewed more than 2,000 IT decision-makers in 10 U.S. cities. The survey indicates that
cloud computing is helping to create new businesses and jobs in each city.
New Innovations in IT Support Environmental Sustainability in Africa
This piece of cutting-edge technology illustrates how it is possible to create sustainable 21stcentury work environments, and is at the center of Microsoft’s green IT strategy. Andimplementing green IT policies like the highly efficient ITPAC data center is not only ensuringthe building’s energy neutrality, but also demonstrating the crucial role that technology can playin environmental sustainability.
The ITPAC technology uses fans to create negative pressure, drawing outside air through thecontainer to cool equipment. As a result, the technology dramatically reduces typical data center carbon footprint and the consumption of materials such as water, concrete, steel, piping andcopper, along with the additional carbon footprint associated with the packaging andtransporting of servers, equipment and supplies.
.
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The building is the first of its kind for the UN in Africa and is a global showcase of sustainable design andtechnology
Microsoft Reports Record $0.77 Earnings Per Share in Second Quarter
Microsoft announced it has now sold over 300 million Windows 7 licenses, andWindows 7 is now running on over 20% of Internet-connected PCs.
Windows Phone 7 launched during the quarter in 30 countries and on 60 operators andnine different devices. Microsoft announced developers are adding Windows Phone 7applications to the marketplace at a rate of over 100 per day.
Bing completed the integration of Yahoo! search in the U.S. and Canada and continues
to gain share. Windows Azure developer momentum continued this quarter, with Pixar Animation
Studios, ADP with NVoicePay and others demonstrating compelling uses of the platform.
Internet Explorer 9 is Microsoft’s fastest downloaded beta browser of all time with over 20 million downloads to date.
At International CES 2011 in early January, Microsoft announced that the next versionof Windows will support System on Chip architectures.
The company announced that during the quarter, it bought back $5 billion in stock anddeclared $1.3 billion in dividends.
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HR (Org chart)
The company is run by a board of directors made up of mostly company outsiders, as is customary for
publicly traded companies. Members of the board of directors as of June 2010 are: Steve Ballmer, Dina
Dublon, Bill Gates (chairman), Raymond Gilmartin, Reed Hastings, Maria Klawe, David Marquardt,
Charles Noski, and Helmut Panke. Board members are elected every year at the annual shareholders'
meeting using a majority vote system. There are five committees within the board which oversee more
specific matters. These committees include:
The Antitrust Compliance Committee, which attempts to prevent company practices from
violating antitrust laws.
The Audit Committee, which handles accounting issues with the company including auditing
and reporting;
The Compensation Committee, which approves compensation for the CEO and other employees
of the company;
The Finance Committee, which handles financial matters such as proposing mergers and
acquisitions;
The Governance and Nominating Committee, which handles various corporate matters
including nomination of the board;
Each committee performs its duties as assigned by the Board in compliance with Microsoft's Bylaws and
its charter.
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Microsoft Corporation Corporate Governance Fact Sheet
Size of Board 9 Number of Independent Directors 7Annual Review of Independence of Board YesSeparate Chairman and CEO Yes
Lead Independent Director YesCharters for Board Committees YesIndependent Audit Committee Yes
Number of Financial Experts on Audit Committee 3Independent Finance Committee YesIndependent Governance and Nominating Committee YesIndependent Antitrust Compliance Committee YesIndependent Compensation Committee YesCompensation Consultant Independence Policy Yes
Number of Board Meetings Held in FY 2010 7Independent Directors Hold Meetings Without Management Present YesAnnual Board Elections Yes
Directors Elected by the Vote of a Majority of Votes Cast in Uncontested ElectionsYesAnnual Board Evaluation YesKey Committee Self Evaluations YesIndividual Director Evaluations YesAnnual Equity Grant to Non-Employee Directors YesDirector Stock Ownership Guidelines YesExecutive Stock Ownership and Holding Requirements YesCorporate Governance Guidelines Approved by Board YesCorporate Compliance Program YesStandards of Business Conduct YesFinance Code of Professional Conduct YesBoard Orientation and Education Program Yes
Microsoft Board of Directors Committee Structure and Membership
DirectorAntitrust
ComplianceAudit Compensation Finance
Governance
and
Nominating
Independent
Ms. Dublon M C
Mr. Gilmartin M C
Mr. Hastings M M MDr. Klawe M M
Mr. Marquardt C M
Mr. Noski C
Dr. Panke C M M
Non-Independent
Mr. Gates
Mr. Ballmer
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Marketing (4ps)
Microsoft Business Division ("MBD") develops and markets software and services designed to increase
personal, team, and organization productivity. MBD offerings include the Microsoft Office system
(comprising mainly Office, SharePoint, Exchange and Lync), which generates over 90% of MBD revenue,
and Microsoft Dynamics business solutions. We evaluate MBD results based upon the nature of the end
user in two primary parts: business revenue, which includes Microsoft Office system revenue generated
through volume licensing agreements and Microsoft Dynamics revenue; and consumer revenue, which
includes revenue from retail packaged product sales and OEM revenue.
Global macroeconomic factors have a strong correlation to demand for their software, services,hardware, and online offerings. The current macroeconomic factors remain dynamic anduncertain. Irrespective of global economic conditions, they are positive about their relativemarket position, our current product portfolio, and future product pipeline. Because they offer awide range of products and services that enable companies to improve productivity and reducecosts, including cloud-based services, they believe that Microsoft is well-positioned to create
new opportunities to increase revenue as the global economy improves. They remain focused onexecuting in the areas we can control by continuing to provide high value products at the lowesttotal cost of ownership while managing our expenses.
1. Product:
“Product” refers to the goods and services that firm’s offer to their customers. Firms must placesufficient importance to the product/service as well as the other aspects associated with the
product that attract customer attention. At Microsoft, the product is the full bundle of goods andservices offered including software and after sales service. Product characteristics include thefunctionality, appearance, and support customers receive when Microsoft products are
purchased. Product also includes the unique features, functions, and characteristics of Microsoftsoftware that are not available from its competitors' products. It is important that Microsoft beable to continue to distinguish and differentiate its products from the competition. To that end,during fiscal years 2001, 2002, and 2003, research and development expenses were a staggering$4.38 billion, $4.31 billion, and $4.66 billion, respectively. Those amounts represented 17.3%,15.2%, and 14.5%, respectively, of revenue in each of those years. Most of Microsoft's productsare developed internally, but the company also purchases new technology, licenses intellectual
property rights, and oversees third-party development of certain products. Microsoft's productsinclude scalable operating systems for servers, personal computers, and intelligent devices;server applications
2. Price:
“Price” refers to the cost of a particular product or service. Price plays an important role incustomer’s buying decision. As far as price is concern Microsoft has global annual revenue of US$ 60.42 billion. Their product price helps them to achieve such huge revenue. Segmenting thehuge customers and valuing their demands and requirements Microsoft has a stack of different
product offering different price. Their price diversification leads their products to capture theglobal market.
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