Additionally, for certain equipment leases, we apply a portfolio approach to effectively account for the operating lease ROU assets and liabilities. Stock-based compensation expense and related income tax benefits were as follows: Stock awards entitle the holder to receive shares of Microsoft common stock as the award vests. Partners in this program can easily package their own products and services to directly provision, manage, and support their customer subscriptions. Building and running cloud-based services in ways that unleash new experiences and opportunities for businesses and individuals. It was last conducted at this . 10 The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. We perform a qualitative assessment on a periodic basis and recognize an impairment if there are sufficient indicators that the fair value of the investment is less than carrying value. There were no changes in our internal control over financial reporting during the quarter ended June 30, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Our exclusive game content is created through Xbox Game Studios, a collection of first-party studios creating iconic and differentiated gaming experiences. The metrics are disclosed in the MD&A or the Notes to Financial Statements in our fiscal year 2022 Form 10-K. Financial metrics are calculated based on financial results prepared in accordance with accounting principles generally accepted in the United States of America (GAAP), and growth comparisons relate to the corresponding period of last fiscal year. 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. (393) (27) The information found on these websites is not part of, or incorporated by reference into, this or any other report we file with, or furnish to, the SEC. Thats why weve committed to equip 10 million people from underserved communities with skills for jobs in the digital economy by 2025. 5.6. As we have diversity of target audiences and sales motions within the Windows business, we monitor metrics that are reflective of those varying motions. The COVID-19 pandemic led to record unemployment, disrupting livelihoods of people around the world. View full document End of preview. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. We conducted our audit in accordance with the standards of the PCAOB. Building on our work in eight US cities, were now partnering with five US states with significant broadband adoption gaps to increase access, adoption, and equity. This contributes to lower inventory backlogs; avoid mark-down losses and/or inventory stock out. (5) Derivative instruments are recognized as either assets or liabilities and measured at fair value. 1 And, through our AI for Humanitarian Action initiative, were helping organizations harness the power of AI to improve their disaster preparedness, response, and recovery. at 31 January 2022, as well as the results of its operations, the changes in equity and the cash flows for Dynamics competes with cloud-based and on-premises business solution providers such as Oracle, Salesforce, and SAP. Teri L. List 1,3 We publish our Sustainability Data Book as a reporting tool that supplements the Fast Retailing Integrated Report.. FY2020 (ended August 31, 2020) We granted $100 million to Breakthrough Energy Catalyst to accelerate the development of climate solutions the world needs to reach net-zero across four key areas: direct air capture, green hydrogen, long duration energy storage, and sustainable aviation fuel. Securities held in our equity investments portfolio are subject to price risk. Revenue and expenses are translated at average rates of exchange prevailing during the year. IKEA is . We encourage investors, the media, and others interested in Microsoft to review the information we post on the social media channels listed on our Investor Relations website. Gross margin percentage was relatively unchanged. Debt in the table above is comprised of senior unsecured obligations and ranks equally with our other outstanding obligations. If the cost of an investment exceeds its fair value, we evaluate, among other factors, general market conditions, credit quality of debt instrument issuers, and the extent to which the fair value is less than cost. For a discussion of the year ended June 30, 2021 compared to the year ended June 30, 2020, please refer to in our fiscal year 2022 Form 10-K, Managements Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended June 30, 2021. Net realizable value is the estimated selling price less estimated costs of completion, disposal, and transportation. The components of lease expense were as follows: Supplemental cash flow information related to leases was as follows: Supplemental balance sheet information related to leases was as follows: The following table outlines maturities of our lease liabilities as of June 30, 2022: As of June 30, 2022, we have additional operating and finance leases, primarily for datacenters, that have not yet commenced of $7.2 billion and $8.8 billion, respectively. Generally, this occurs shortly before the products are released to production. We have an ESPP for all eligible employees. Annual Reports will also contain 'Discussion and Analysis from the Management', along with Corporate Information, Report on Corporate Ggovernance and detailed financial results for the last 10 years. On September 18, 2019, our Board of Directors approved a share repurchase program authorizing up to $40.0 billion in share repurchases. In addition to these channels, we use social media to communicate to the public. Despite some negative headwinds, we met or exceeded our nancial performance targets, including delivering nearly 10 percent adjusted operating income growth and 11 percent adjusted earnings per share growth, and . Our hybrid infrastructure consistency spans security, compliance, identity, and management, helping to support the real-world needs and evolving regulatory requirements of commercial customers and enterprises. Zara's macro-environment can be analysed by looking at 3 factors that provide the opportunities and threats to the company. Together, Microsoft and Nuance will enable organizations across industries to accelerate their business goals with security-focused, cloud- based solutions infused with powerful, vertically optimized AI. Search and news advertising revenue excluding traffic acquisition costs increased 27% driven by higher revenue per search and search volume. Despite these increases, we remain dedicated to achieving a net-zero future. Certain volume licensing programs, including Enterprise Agreements, include on-premises licenses combined with Software Assurance (SA). To learn more, view ourPrivacy Policy. The valuation allowance disclosed in the table above relates to the foreign net operating loss carryforwards, federal capital loss carryforwards, and other net deferred tax assets that may not be realized. And it deeply informs our longstanding commitment to diversity and inclusion. We will include as many of your questions as possible during the Q&A session of the meeting and will provide answers to questions on the Microsoft Investor Relations website under the Annual Meeting page. Changes in these estimates and assumptions could materially affect the determination of fair value and goodwill impairment for each reporting unit. Office Consumer revenue is mainly affected by the percentage of customers that buy Office with their new devices and the continued shift from Office licensed on-premises to Microsoft 365 Consumer subscriptions. The proceeds of these issuances were or will be used for general corporate purposes, which may include, among other things, funding for working capital, capital expenditures, repurchases of capital stock, acquisitions, and repayment of existing debt. Our increasing engagement with open source software will also cause us to license our intellectual property rights broadly in certain situations. These annual accounts were prepared in accordance with the International Financial Reporting See Note 12 Income Taxes of the Notes to Financial Statements in our fiscal year 2022 Form 10-K for further discussion. The resolution of each of these audits is not expected to be material to our consolidated financial statements. Capitalized software development costs are amortized over the estimated lives of the products. Advertising expense was $1.5 billion, $1.5 billion, and $1.6 billion in fiscal years 2022, 2021, and 2020, respectively. We design and sell devices, including Surface and PC accessories. These allocated costs include legal, including settlements and fines, information technology, human resources, finance, excise taxes, field selling, shared facilities services, and customer service and support. For derivative instruments designated as fair value hedges, gains and losses are recognized in other income (expense), net with offsetting gains and losses on the hedged items. Office Consumer is designed to increase personal productivity through a range of products and services. The Microsoft Services Provider License Agreement allows hosting service providers and independent software vendors who want to license eligible Microsoft software products to provide software services and hosted applications to their end customers. Azure faces diverse competition from companies such as Amazon, Google, IBM, Oracle, VMware, and open source offerings. With Power Platform, we are helping domain experts rapidly drive productivity gains when its never been more important. Organizations of all sizes have digitized business-critical functions, redefining what they can expect from their business applications. Our server products are designed to make IT professionals, developers, and their systems more productive and efficient. The estimates used to calculate the fair value of a reporting unit change from year to year based on operating results, market conditions, and other factors. Adjustments in purchase price allocations may require a change in the amounts allocated to goodwill during the periods in which the adjustments are determined. The allocation of the purchase price to goodwill was completed as of December 31, 2021. 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. Increasing representation and strengthening inclusion: build on our momentum, adding a $150 million investment to strengthen inclusion and double the number of Black, African American, Hispanic, and Latinx leaders in the United States by 2025. CALs provide access rights to certain server products, including SQL Server and Windows Server, and revenue is reported along with the associated server product. The primary purpose of our invoicing terms is to provide customers with simplified and predictable ways of purchasing our products and services, not to receive financing from our customers or to provide customers with financing. Executive Vice President and Chief Human Resources Officer. On March 4, 2022, we completed our acquisition of Nuance Communications, Inc. (Nuance) for a total purchase price of $18.8 billion, consisting primarily of cash. In July 2022, we completed an assessment of the useful lives of our server and network equipment. Executive Vice President and Chief Financial Officer, Alice L. Jolla (1,087) None of these changes had a material impact on previously reported amounts in our MD&A. Due to investments in software that increased efficiencies in how we operate our server and network equipment, as well as advances in technology, we determined we should increase the estimated useful lives of both server and network equipment from four years to six years. Enterprise Agreements are designed for medium or large organizations that want to license cloud services and on-premises software organization-wide over a three-year period. They reinvent themselves, they correct their mistakes and they keep moving forward. We use different programs designed to provide flexibility for organizations of various sizes. We are required to estimate the fair value of the investment to determine the amount of the impairment loss. 2021-22 Annual report. Our Enterprise Mobility + Security offerings also compete with products from a range of competitors including identity vendors, security solution vendors, and numerous other security point solution vendors. Assets and liabilities measured at fair value on a recurring basis using unobservable inputs are an immaterial portion of our portfolio. Inditex has reached its limit for free report views. We evaluated the reasonableness of management's estimate of stand-alone selling prices for products and services that are not sold separately. Interest and dividends income decreased due to lower portfolio balances. Consolidated statement of comprehensive income. The largest component of the OEM business is the Windows operating system pre-installed on devices. Shares of our common stock may be purchased by employees at three- month intervals at 90% of the fair market value on the last trading day of each three-month period. 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. Search and news advertising revenue excluding traffic acquisition costs increased 27%. At Microsoft, we provide technology and resources to help our customers create a secure hybrid work environment. Changes in value are recorded in other income (expense), net. Our work to help preserve, protect, and advance democracy by promoting a healthy information ecosystem and safeguarding electoral processes is as salient as ever in todays geopolitical climate. We then open the study of Inditex by describing the network of shops and manufacturing, presenting the principles of the logistical model, and providing details of the procedures applied for the functional and geographical integration of the chain of production of Zara, the best known of the company's 11 brands. Costs incurred internally in researching and developing a computer software product are charged to expense until technological feasibility has been established for the product. The following table outlines maturities of our long-term debt, including the current portion, as of June 30, 2022: The components of the provision for income taxes were as follows: U.S. and foreign components of income before income taxes were as follows: The items accounting for the difference between income taxes computed at the U.S. federal statutory rate and our effective rate were as follows: In the first quarter of fiscal year 2022, we transferred certain intangible properties from our Puerto Rico subsidiary to the U.S. Tesla Annual Report 2022 Form 10-K (NASDAQ:TSLA) Published: May 2nd, 2022 PDF generated by stocklight.com . New Dynamics 365 Connected Spaces helps organizations across diverse industriesfrom real estate and retail, to factories and constructionmanage their physical operations. To foster their and our success, we seek to create an environment where people can thrive, where they can do their best work, where they can proudly be their authentic selves, guided by our values, and where they know their needs can be met. We continue to invest in new gaming studios and content to expand our IP roadmap and leverage new content creators. We adopted the standard effective July 1, 2021. October 24, 2022. RH 2022 Annual Meeting of Shareholders. In addition, all employees complete skills training based on the profession they are in each year. It also gives us the freedom to decide which modifications and enhancements are most important and when they should be implemented. Zara's Results vs. Securities held in our fixed-income portfolio are subject to different interest rate risks based on their maturities. Accounting literature also provides guidance on derecognition of income tax assets and liabilities, classification of deferred income tax assets and liabilities, accounting for interest and penalties associated with tax positions, and income tax disclosures. Timing of revenue recognition may differ from the timing of invoicing to customers. If market, industry, and/or investee conditions deteriorate, we may incur future impairments. The COVID-19 pandemic accelerated our capabilities and culture with respect to flexible work. And more than 29,000 employees volunteered over 720,000 hours to causes they care about. Sales and marketing included a favorable foreign currency impact of 2%. (ended March 31, 2017), please refer to Toyota Industries Report. Microsoft Products and Services Agreements are designed for medium and large organizations that want to license cloud services and on-premises software as needed, with no organization-wide commitment, under a single, non-expiring agreement. (2) Translation Cash flows We also launched a national campaign with U.S. community colleges to help skill and recruit into the cybersecurity workforce 250,000 people by 2025, representing half of the countrys workforce shortage. 2422. In determining whether a loss should be accrued we evaluate, among other factors, the degree of probability of an unfavorable outcome and the ability to make a reasonable estimate of the amount of loss. (35) 250 9 33 FY 2020 Annual Report. They consist predominantly of highly liquid investment-grade fixed-income securities, diversified among industries and individual issuers. Our Internet address is www.microsoft.com. On July 25, 2022, there were 86,465 registered holders of record of our common stock. Gains and losses representing hedge components excluded from the assessment of effectiveness are recognized in other income (expense), net. 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