Cybersecurity is the number one threat facing every business today. Our Productivity and Business Processes segment consists of products and services in our portfolio of productivity, communication, and information services, spanning a variety of devices and platforms. As a result, changes in foreign exchange rates may significantly affect revenue and expenses. Under the TCJA, the transition tax is payable in interest-free installments over eight years, with 8% due in each of the first five years, 15% in year six, 20% in year seven, and 25% in year eight. Microsoft 365 Consumer subscribers grew 15% to 59.7 million. Microsoft Research is one of the worlds largest corporate research organizations and works in close collaboration with top universities around the world to advance the state-of-the-art in computer science and a broad range of other disciplines, providing us a unique perspective on future trends and contributing to our innovation. Determining whether products and services are considered distinct performance obligations that should be accounted for separately versus together may require significant judgment. As we look to the next year and beyond, well continue to reflect on where the world needs us to do better. Explore the report Report summary The total shareholder dividend for FY2022 was 325 US cents, an annual cash return of a record US$16.4 billion to shareholders and representing a 77 per cent payout ratio. New employee orientation covering a range of topics including company values, and culture, as well as ongoing onboarding programs. A Microsoft Online Subscription Agreement is designed for small and medium organizations that want to subscribe to, activate, provision, and maintain cloud services seamlessly and directly via the web. Windows OEM revenue is impacted significantly by the number of Windows operating system licenses purchased by OEMs, which they pre-install on the devices they sell. Operating leases are included in operating lease right-of-use (ROU) assets, other current liabilities, and operating lease liabilities in our consolidated balance sheets. There are now more than 1.4 billion monthly active devices running Windows 10 or Windows 11. Our consolidated financial statements and accompanying notes are prepared in accordance with GAAP. This includes the server platform, database, business intelligence, storage, management and operations, virtualization, service-oriented architecture platform, security, and identity software. In-the-classroom learning, learning cohorts, our early-in-career Aspire program, and manager excellence communities. Jaguar Land Rover is in a strong position with a striking portfolio of attractive premium luxury products, a healthy bank of customer orders, low break-evens and the right strategy to support its unique and renowned British brands in a rapidly changing legislative and commercial landscape. Constraints in the supply chain of device components. Apple distributes versions of its pre-installed application software, such as email and calendar products, through its PCs, tablets, and phones. Address by Dr. Y K Hamied, Chairman at the 86th Annual General Meeting. We use a range of amounts to estimate SSP when we sell each of the products and services separately and need to determine whether there is a discount to be allocated based on the relative SSP of the various products and services. Chairman and Chief Executive Officer Gross margin increased $3.1 billion or 10% driven by growth in Windows and Search and news advertising. The acquisition has been approved by Activision Blizzards shareholders, and we expect it to close in fiscal year 2023, subject to the satisfaction of certain regulatory approvals and other customary closing conditions. We settled a portion of the Internal Revenue Service (IRS) audit for tax years 2004 to 2006 in fiscal year 2011. (393) (27) IKEA UK Annual Report, Financial Year 2022. At our very core, we need to deliver innovation that helps drive broad economic growth. Fair value is calculated based on publicly available market information or other estimates determined by management. It also provides support, tools, training, and other licensing benefits to help customers deploy and use software efficiently. These reviews include analysis of demand forecasts, product life cycle status, product development plans, current sales levels, pricing strategy, and component cost trends. Our most significant expenses are related to compensating employees; designing, manufacturing, marketing, and selling our products and services; datacenter costs in support of our cloud-based services; and income taxes. Reinvent productivity and business processes. Dynamics competes with cloud-based and on-premises business solution providers such as Oracle, Salesforce, and SAP. We recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. Zoom offers videoconferencing and cloud phone solutions. The following Managements Discussion and Analysis of Financial Condition and Results of Operations (MD&A) is intended to help the reader understand the results of operations and financial condition of Microsoft Corporation. Under the terms of the ESPP that were approved in 2012, the plan was set to terminate on December 31, 2022. As part of our effort to promote a One Microsoft and inclusive culture, in fiscal year 2021 we expanded stock eligibility to all Microsoft employees as part of our annual rewards process. SA is included. Introduction and Fiscal Year 2022 Results; Integrated Strategic Choices; A Portfolio of Superior, Daily-Use Products; Superiority to Win with Consumers; Ongoing Productivity; A Constructive Disruption Mindset; Economic Conditions, Challenges, and Risks. Xbox revenue is mainly affected by subscriptions and sales of first- and third-party content, as well as advertising. Refer to Note 16 Stockholders Equity of the Notes to Financial Statements in our fiscal year 2022 Form 10-K for further discussion. In March 2021, the India Supreme Court ruled favorably for companies in 86 separate appeals, some dating back to 2012, holding that software sales are not subject to India withholding taxes. We expect capital expenditures to increase in coming years to support growth in our cloud offerings. 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. Server products and cloud services revenue increased 28% driven by Azure and other cloud services growth of 45%. The big bets we have made across content, community, and cloud over the past few years continue to pay off. For certain equipment leases, such as vehicles, we account for the lease and non-lease components as a single lease component. These agreements are designed for small and medium organizations that want to license cloud services and on-premises software over a three-year period. We evaluated the reasonableness of management's estimate of stand-alone selling prices for products and services that are not sold separately. Revenue and expenses are translated at average rates of exchange prevailing during the year. We put our commitment into practice, not only within Microsoft but by empowering our customers and partners to do the same and by advocating for policy change. Google provides a hosted messaging and productivity suite. Our mission to empower every person and every organization on the planet to achieve more has never been more urgent or more necessary. On July 25, 2022, there were 86,465 registered holders of record of our common stock. Our principal audit procedures to evaluate management's estimates of uncertain tax positions related to unresolved transfer pricing issues included the following: Seattle, Washington We compete to provide enterprise-wide computing solutions and point solutions with numerous commercial software vendors that offer solutions and middleware technology platforms, software applications for connectivity (both Internet and intranet), security, hosting, database, and e-business servers. The company Zara uses resources that are to fully utilize the labor regardless of the process-making which contains harmful substances in the production of goods. You can download the paper by clicking the button above. 122 74 1 9 4 13 (2,180) Treasury We also distributed a further US$19.6 billion as an in specie dividend through the merger of our Petroleum . Second, the productive structure, combining nearby and distant manufacturing, and both dispersion and concentration spatially and in production, also relies on the effectiveness of the logistical model. Our Dynamics business solutions are also licensed to enterprises through a global network of channel partners providing vertical solutions and specialized services. Our growth and impact this past year would not have been possible without your commitment to the company and belief in its mission. A Select Plus agreement is designed for government and academic organizations to acquire on-premises licenses at any affiliate or department level, while realizing advantages as one organization. As of June 30, 2022, our long- term unsecured debt rating was AAA, and cash investments were in excess of $1.0 billion. While we employ much of our internally-developed intellectual property exclusively in our products and services, we also engage in outbound licensing of specific patented technologies that are incorporated into licensees products. 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. We believe our allowances for income tax contingencies are adequate. Cost of revenue is allocated in certain cases based on a relative revenue methodology. The lawsuits also allege an industry- wide conspiracy to manipulate the science and testing around emission guidelines. Over the past four years, weve sent over 67,000 nation-state-related threat notifications to customers to help them protect themselves from digital threats. 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. (ended March 31, 2017), please refer to Toyota Industries Report. The opportunity to apply technology to make a real difference for every customer, community, and country has never been greater. Customers are looking to unlock value while simplifying security and management. We also settled a portion of the IRS audit for tax years 2007 to 2009 in fiscal year 2016, and a portion of the IRS audit for tax years 2010 to 2013 in fiscal year 2018. Changes in inventory levels in the OEM channel. With our expanding portfolio of business applications, we are helping every business become a hyperconnected businessunifying data, process, and teams across the organization. Differences in device market demand between developed markets and growth markets. Our Microsoft Cloud (formerly commercial cloud) revenue, which includes Azure and other cloud services, Office 365 Commercial, the commercial portion of LinkedIn, Dynamics 365, and other commercial cloud properties, was $91.2 billion, $69.1 billion and $51.7 billion in fiscal years 2022, 2021, and 2020, respectively. This means everyone is on a continuous journey to learn and grow. Over the last year, we collaborated with partners and worked within neighborhoods and communities to launch and scale a number of projects and programs, including: working with 70 organizations in 145 communities on the Justice Reform Initiative, expanding access to affordable broadband and devices for Black and African American communities and key institutions that support them in major urban centers, expanding access to skills and education to support Black and African American students and adults to succeed in the digital economy, and increasing technology support for nonprofits that provide critical services to Black and African American communities. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of June 30, 2022, based on criteria established inInternal Control Integrated Framework (2013)issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated July 28, 2022, expressed an unqualified opinion on the Company's internal control over financial reporting. (8) In addition, all employees complete skills training based on the profession they are in each year. The purchase price included $766 million of cash and cash equivalents acquired. The consolidated financial statements include the accounts of Microsoft Corporation and its subsidiaries. Our products are generally sold with a right of return, we may provide other credits or incentives, and in certain instances we estimate customer usage of our products and services, which are accounted for as variable consideration when determining the amount of revenue to recognize. Attachment of Windows to devices shipped. Office Commercial products revenue declined 22% driven by continued customer shift to cloud offerings. Gaming, including Xbox hardware and Xbox content and services, comprising first- and third-party content (including games and in-game content), Xbox Game Pass and other subscriptions, Xbox Cloud Gaming, third-party disc royalties, advertising, and other cloud services. Through this commitment we can allow everyone the chance to be their authentic selves and do their best work every day. Internal control over financial reporting includes maintaining records that in reasonable detail accurately and fairly reflect our transactions; providing reasonable assurance that transactions are recorded as necessary for preparation of our consolidated financial statements; providing reasonable assurance that receipts and expenditures of company assets are made in accordance with management authorization; and providing reasonable assurance that unauthorized acquisition, use, or disposition of company assets that could have a material effect on our consolidated financial statements would be prevented or detected on a timely basis. We, as a company, will do well when the world around us does well. These provisions require us to capitalize research and experimental expenditures and amortize them on the U.S. tax return over five or fifteen years, depending on where research is conducted. Editorial. Interest rate risks related to certain fixed-rate debt are hedged using interest rate swaps that are designated as fair value hedging instruments to effectively convert the fixed interest rates to floating interest rates. Azure Synapse brings together data integration, enterprise data warehousing, and big data analytics in a comprehensive solution. 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. See Note 12 Income Taxes of the Notes to Financial Statements in our fiscal year 2022 Form 10-K for further discussion. Based on the carrying amount of server and network equipment included in property and equipment, net as of June 30, 2022, it is estimated this change will increase our fiscal year 2023 operating income by $3.7 billion. The findings suggest that vertical integration through ownership of various operational stages including product design and development, production operation, logistics and distribution channel; appropriate sourcing strategy to meet product needs; application of process/product modularity practices in product design, material procurement and manufacturing to ensure manufacturing flexibility; flexible logistics capability; and all of these seamlessly integrated and coordinated by a centralized IT infrastructure can significantly raise overall supply chain flexibility and responsiveness. Equity investments without readily determinable fair values are written down to fair value if a qualitative assessment indicates that the investment is impaired and the fair value of the investment is less than carrying value. You can also read past reports by accessing the archives in the right panel. 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