We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended June 30, 2022, of the Company and our report dated July 28, 2022, expressed an unqualified opinion on those financial statements. on 31 January of the following year. Our devices are primarily manufactured by third-party contract manufacturers. Investors & ShareholdersInvestors & Shareholdersshow submenu for Investors & ShareholdersBrexit BrexitNationality Declaration Nationality DeclarationOwnership Limitations Ownership LimitationsNCBO Form NCBO FormShare Price Share PriceDebt DebtAGM 2022 AGM 2022CSD Migration CSD MigrationRegistrar RegistrarTR-1 Form TR-1 FormShareholder Returns . UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year endedSeptember 25, 2021 or TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to . We market and distribute our products and services through the following channels: OEMs, direct, and distributors and resellers. m sand plant project report. As of June 30, 2022, we had federal, state, and foreign net operating loss carryforwards of $318 million, $1.3 billion, and $2.1 billion, respectively. While we continued to make progress on several of our goals, with an overall reduction in our combined Scope 1 and Scope 2 emissions, our Scope 3 emissions increased, due in substantial part to significant global datacenter expansions and growth in Xbox sales and usage as a result of the COVID-19 pandemic. This means everyone is on a continuous journey to learn and grow. The Companys management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Report of Management on Internal Control over Financial Reporting. Changes in these factors could materially impact our consolidated financial statements. Chairman and Chief Executive Officer, Amy E. Hood This year, we introduced GitHub Copilot, a first-of-its-kind AI pair programmer, to help developers write better code faster. As a result, no collateral was required to be posted. Managers holding conversations about employees career and development plans, coaching on career opportunities, and programs like mentoring and sponsorship. Microsoft Experience Centers are designed to facilitate deeper engagement with our partners and customers across industries. Excluding the impact of the change in accounting estimate, gross margin percentage increased 2 points driven by improvement across all cloud services. Security and digital safety are foundational to trust in todays complex threat landscape. Once an investment is determined to be impaired, an impairment charge is recorded in other income (expense), net. The decrease from the federal statutory rate in fiscal year 2020 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, and tax benefits relating to stock-based compensation. DIRECTORS AND EXECUTIVE OFFICERS OF MICROSOFT CORPORATION, Satya Nadella Fast fashion helps sate deeply held desires among young consumers in the industrialized world for luxury fashion, even as it embodies unsustainability. Many of our shareholders are increasingly focused on the importance of the effective engagement and action on environmental, social, and governance topics. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. The decrease in our effective tax rate for fiscal year 2021 compared to fiscal year 2020 was primarily due to tax benefits from the India Supreme Court decision on withholding taxes, an agreement between the U.S. and India tax authorities related to transfer pricing, final TCJA regulations, and an increase in tax benefits relating to stock-based compensation. (393) Search and news advertising revenue increased $2.3 billion or 25%. Our system management solutions compete with server management and server virtualization platform providers, such as BMC, CA Technologies, Hewlett-Packard, IBM, and VMware. Adjusted net income and adjusted diluted earnings per share (EPS) are non-GAAP financial measures which exclude the net income tax benefit related to transfer of intangible properties in the first quarter of fiscal year 2022 and the net income tax benefit related to an India Supreme Court decision on withholding taxes in the third quarter of fiscal year 2021. Our objectives for holding derivatives include reducing, eliminating, and efficiently managing the economic impact of these exposures as effectively as possible. Fiscal year ending June 30. We assumed responsibility for these claims in our agreement to acquire Nokias Devices and Services business and have been substituted for the Nokia defendants. The competitive position of Linux has also benefited from the large number of compatible applications now produced by many commercial and non-commercial software developers. Gross margin percentage decreased slightly. Gross margin increased $3.1 billion or 10% driven by growth in Windows and Search and news advertising. Our success is highly dependent on our ability to attract and retain qualified employees. Despite these increases, we remain dedicated to achieving a net-zero future. We introduced a Hybrid Workplace Flexibility Guide to better support managers and employees as they adapt to new ways of working that shift paradigms, embrace flexibility, promote inclusion, and drive innovation. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. These contracts are not designated as hedging instruments and are included in Other contracts in the tables below. The markets for software, devices, and cloud-based services are dynamic and highly competitive. UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K/A (Amendment No. As of July 2022, weve committed $257 million in financial and technology assistance to the global response to the war in Ukraine, including support for government, businesses, nonprofits, and humanitarian assistance for refugees. We provide for the estimated costs of fulfilling our obligations under hardware and software warranties at the time the related revenue is recognized. Returns and credits are estimated at contract inception and updated at the end of each reporting period if additional information becomes available. Our principal audit procedures related to the Company's revenue recognition for these customer agreements included the following: Income Taxes Uncertain Tax Positions Refer to Note 12 to the financial statements. The objective of this study is twofold: first to identify the constituents that mold the fast fashion retailing business model, and second to discuss how global leader of fast fashion retailing Inditex-Zara's product offering is strongly supported by integration of various supply chain operations. We analyze 43 trillion security signals daily and use the insights to inform increased protections. The segment amounts included in MD&A are presented on a basis consistent with our internal management reporting. Annual General Meeting Recordings - 2022. Business Responsibility & Sustainability Report. In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of June 30, 2022 and 2021, and the results of its operations and its cash flows for each of the three years in the period ended June 30, 2022, in conformity with accounting principles generally accepted in the United States of America. The separate annual accounts of the Parent (Inditex) for 2021 were prepared by the Board of Directors We recognize that progress wont always be linear, and the rate at which we can implement emissions reductions is dependent on many factors that can fluctuate over time. Our new Entra product family includes tools for permissions management, identity governance, and identity verification. 2838 kb. We are committed to designing and marketing first-party devices to help drive innovation, create new device categories, and stimulate demand in the Windows ecosystem. In February 2012, the IRS withdrew its 2011 Revenue Agents Report related to unresolved issues for tax years 2004 to 2006 and reopened the audit phase of the examination. And it deeply informs our longstanding commitment to diversity and inclusion. The supply chains of big fashion retailers provide a good example because the choice of global or local supply depends on whether suppliers rely on efficient transport and logistics systems that let them compensate for higher relative costs compared with developing countries in the case of local supply or the costs deriving from their greater distance to the market in the case of global supply. Comparison of Backlogged Requests from Previous and Current Annual Report Founded in 1975, we develop and support software, services, devices, and solutions that deliver new value for customers and help people and businesses realize their full potential. However, due to the integrated structure of our business, certain revenue recognized and costs incurred by one segment may benefit other segments. Cybersecurity is a significant threat for governments, businesses, and individuals around the world, yet there simply arent enough people with cybersecurity skills to fill open jobs. Compensation cost for stock awards, which include restricted stock units (RSUs) and performance stock units (PSUs), is measured at the fair value on the grant date and recognized as expense, net of estimated forfeitures, over the related service or performance period. Our Performance & Updates 2022 Annual Report Entering the next phase of M&S' transformation as we move from Fixing the Basics to Shaping the Future. In our 2021 Diversity and Inclusion Report, we reported that all racial and ethnic minority employees in the U.S. combined earn $1.006 for every $1.000 earned by their white counterparts, that women in the U.S. earn $1.002 for every $1.000 earned by their counterparts in the U.S. who are men, and women in the U.S. plus our twelve other largest employee geographies representing 86.6% of our global population (Australia, Canada, China, France, Germany, India, Ireland, Israel, Japan, Romania, Singapore, and the United Kingdom) combined earn $1.001 for every $1.000 by men in these countries. In the second quarter of fiscal year 2021, we settled an additional portion of the IRS audits for tax years 2004 to 2013 and made a payment of $1.7 billion, including tax and interest. Our revenue fluctuates quarterly and is generally higher in the second and fourth quarters of our fiscal year. We tested the mathematical accuracy of management's calculations of revenue and the associated timing of revenue recognized in the financial statements. REPORT OF MANAGEMENT ON INTERNAL CONTROL OVER FINANCIAL REPORTING. Windows Commercial products and cloud services revenue increased 11%. Opportunities include: Our employees embrace the growth mindset and take advantage of the formal learning opportunities as well as thousands of informal and on-the-job learning opportunities. Determining whether products and services are considered distinct performance obligations that should be accounted for separately versus together may require significant judgment. Growth of our Gaming business is determined by the overall active user base through Xbox enabled content, availability of games, providing exclusive game content that gamers seek, the computational power and reliability of the devices used to access our content and services, and the ability to create new experiences through first-party content creators. The investments are predominantly U.S. dollar-denominated securities, but also include foreign currency-denominated securities to diversify risk. Zara's brand value worldwide. Microsoft Cloud gross margin percentage decreased slightly to 70%. We account for certain assets and liabilities at fair value. We regularly reevaluate our estimates to assess the adequacy of the recorded warranty liabilities and adjust the amounts as necessary. For access to additional financial information, visit the Investor Relations website online at: www.microsoft.com/investor. In the consolidated income statement, gross profit, EBITDA, EBIT and PBT are defi In addition, certain costs incurred at a corporate level that are identifiable and that benefit our segments are allocated to them. To get a copy of our annual report, you can GO GREEN and Click download an e-copy. Refer to Note 1 Accounting Policies of the Notes to Financial Statements in our fiscal year 2022 Form 10-K for further discussion. Azure faces diverse competition from companies such as Amazon, Google, IBM, Oracle, VMware, and open source offerings. Essential to this is our commitment to continually exercise our growth mindset and confront our fixed mindset with humility, curiosity, compassion, and the recognition that, while none of us will ever be perfect, we can always be better than we are today. The better we represent that diversity inside Microsoft, the more effectively we can innovate for those we seek to empower. This starts with increasing access to digital skills. 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. And more than 29,000 employees volunteered over 720,000 hours to causes they care about. Debt investments are classified as available-for-sale and realized gains and losses are recorded using the specific identification method. 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. As of June 30, 2022, we accrued aggregate legal liabilities of $364 million. 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. Eligible U.S. employees may contribute a portion of their salary into the savings plans, subject to certain limitations. Office Commercial revenue is mainly affected by a combination of continued installed base growth and average revenue per user expansion, as well as the continued shift from Office licensed on-premises to Office 365. Customers are looking to unlock value while simplifying security and management. In addition, all our broker- priced investments have a sufficient level of trading volume to demonstrate that the fair values used are appropriate for these investments. Our commitment to responsibly develop and use technologies like AI is core to who we are. As of June 30, 2022, $40.7 billion remained of our $60 billion share repurchase program. Chief Executive Officer and Im constantly in awe of how our employees bring their passion to work each dayfor each other, for our customers, and for their communities. In order of value, with least valuable assets first. Enterprise Services, including Enterprise Support Services, Microsoft Consulting Services, and Nuance Professional Services, assist customers in developing, deploying, and managing Microsoft server solutions, Microsoft desktop solutions, and Nuance conversational AI and ambient intelligent solutions, along with providing training and certification to developers and IT professionals on various Microsoft products. October 24, 2022. This includes the annual Standards of Business Conduct training. Once technological feasibility is established, software costs are capitalized until the product is available for general release to customers. We regularly review inventory quantities on hand, future purchase commitments with our suppliers, and the estimated utility of our inventory. When it comes to AI, were seeing a paradigm shift as the worlds large AI models become platforms themselves. In July 2022, we completed an assessment of the useful lives of our server and network equipment. Examples include invoicing at the beginning of a subscription term with revenue recognized ratably over the contract period, and multi-year on-premises licenses that are invoiced annually with revenue recognized upfront. The lawsuits also allege an industry- wide conspiracy to manipulate the science and testing around emission guidelines. This share repurchase program commenced in February 2020 and was completed in November 2021. Lead Independent Director, Explore the report Report summary Microsofts culture is grounded in the growth mindset. . 4.4. But There Are Still Opportunities, Roundtable Pros Say. 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. Cost of revenue includes: manufacturing and distribution costs for products sold and programs licensed; operating costs related to product support service centers and product distribution centers; costs incurred to include software on PCs sold by original equipment manufacturers (OEM), to drive traffic to our websites, and to acquire online advertising space; costs incurred to support and maintain online products and services, including datacenter costs and royalties; warranty costs; inventory valuation adjustments; costs associated with the delivery of consulting services; and the amortization of capitalized software development costs. We are creating the tools and platforms that deliver better, faster, and more effective solutions to support new startups, improve educational and health outcomes, and empower human ingenuity. Collaborating with our shareholders, allies in transformation, 5.4. No respite. We have historically paid India withholding taxes on software sales through distributor withholding and tax audit assessments in India. Unearned revenue is generally invoiced annually at the beginning of each contract period for multi-year agreements and recognized ratably over the coverage period. Research and development expenses include payroll, employee benefits, stock-based compensation expense, and other headcount-related expenses associated with product development. We conducted our audit in accordance with the standards of the PCAOB. 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. Demographic Factors This is the study of the human population in terms of their age. Customer mix between consumer, small and medium businesses, and large enterprises. We have learned the impact of our work will not all be felt immediately, and our experience highlights how progress wont always be linear. 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. Adjustments to reconcile net income to net cash from operations: Net recognized gains on investments and derivatives. Hence, the importance of Supply Chain (Management) has appeared. The major classes of assets and liabilities to which we have preliminarily allocated the purchase price were as follows: Following are the details of the purchase price allocated to the intangible assets acquired: On March 9, 2021, we completed our acquisition of ZeniMax Media Inc. (ZeniMax), the parent company of Bethesda Softworks LLC (Bethesda), for a total purchase price of $8.1 billion, consisting primarily of cash. We have lease agreements with lease and non-lease components, which are generally accounted for separately. (71) Securities held in our fixed-income portfolio are subject to different interest rate risks based on their maturities. The COVID-19 pandemic accelerated our capabilities and culture with respect to flexible work. For derivative instruments that are not designated as hedges, gains and losses from changes in fair values are primarily recognized in other income (expense), net. The Microsoft Cloud Solution Provider program offers customers an easy way to license the cloud services they need in combination with the value-added services offered by their systems integrator, managed services provider, or cloud reseller partner. Our contracts with customers often include promises to transfer multiple products and services to a customer. From time to time, we enter into broader cross-license agreements with other technology companies covering entire groups of patents. We test goodwill for impairment annually on May 1 at the reporting unit level, primarily using a discounted cash flow methodology with a peer-based, risk-adjusted weighted average cost of capital. Annual Report 2021. In addition to our main research and development operations, we also operate Microsoft Research. Provisions enacted in the TCJA related to the capitalization for tax purposes of research and experimental expenditures became effective on July 1, 2022. Applying AI to drive insights and act on our customers behalf by understanding and interpreting their needs using natural methods of communication. These controls include model validation, review of key model inputs, analysis of period-over-period fluctuations, and independent recalculation of prices where appropriate. No instances of impairment were identified in our May 1, 2022, May 1, 2021, or May 1, 2020 tests. Talent Solutions provide insights for workforce planning and tools to hire, nurture, and develop talent.
zara annual report 2022 pdf
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended June 30, 2022, of the Company and our report dated July 28, 2022, expressed an unqualified opinion on those financial statements. on 31 January of the following year. Our devices are primarily manufactured by third-party contract manufacturers. Investors & ShareholdersInvestors & Shareholdersshow submenu for Investors & ShareholdersBrexit BrexitNationality Declaration Nationality DeclarationOwnership Limitations Ownership LimitationsNCBO Form NCBO FormShare Price Share PriceDebt DebtAGM 2022 AGM 2022CSD Migration CSD MigrationRegistrar RegistrarTR-1 Form TR-1 FormShareholder Returns . UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year endedSeptember 25, 2021 or TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to . We market and distribute our products and services through the following channels: OEMs, direct, and distributors and resellers. m sand plant project report. As of June 30, 2022, we had federal, state, and foreign net operating loss carryforwards of $318 million, $1.3 billion, and $2.1 billion, respectively. While we continued to make progress on several of our goals, with an overall reduction in our combined Scope 1 and Scope 2 emissions, our Scope 3 emissions increased, due in substantial part to significant global datacenter expansions and growth in Xbox sales and usage as a result of the COVID-19 pandemic. This means everyone is on a continuous journey to learn and grow. The Companys management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Report of Management on Internal Control over Financial Reporting. Changes in these factors could materially impact our consolidated financial statements. Chairman and Chief Executive Officer, Amy E. Hood This year, we introduced GitHub Copilot, a first-of-its-kind AI pair programmer, to help developers write better code faster. As a result, no collateral was required to be posted. Managers holding conversations about employees career and development plans, coaching on career opportunities, and programs like mentoring and sponsorship. Microsoft Experience Centers are designed to facilitate deeper engagement with our partners and customers across industries. Excluding the impact of the change in accounting estimate, gross margin percentage increased 2 points driven by improvement across all cloud services. Security and digital safety are foundational to trust in todays complex threat landscape. Once an investment is determined to be impaired, an impairment charge is recorded in other income (expense), net. The decrease from the federal statutory rate in fiscal year 2020 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, and tax benefits relating to stock-based compensation. DIRECTORS AND EXECUTIVE OFFICERS OF MICROSOFT CORPORATION, Satya Nadella Fast fashion helps sate deeply held desires among young consumers in the industrialized world for luxury fashion, even as it embodies unsustainability. Many of our shareholders are increasingly focused on the importance of the effective engagement and action on environmental, social, and governance topics. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. The decrease in our effective tax rate for fiscal year 2021 compared to fiscal year 2020 was primarily due to tax benefits from the India Supreme Court decision on withholding taxes, an agreement between the U.S. and India tax authorities related to transfer pricing, final TCJA regulations, and an increase in tax benefits relating to stock-based compensation. (393) Search and news advertising revenue increased $2.3 billion or 25%. Our system management solutions compete with server management and server virtualization platform providers, such as BMC, CA Technologies, Hewlett-Packard, IBM, and VMware. Adjusted net income and adjusted diluted earnings per share (EPS) are non-GAAP financial measures which exclude the net income tax benefit related to transfer of intangible properties in the first quarter of fiscal year 2022 and the net income tax benefit related to an India Supreme Court decision on withholding taxes in the third quarter of fiscal year 2021. Our objectives for holding derivatives include reducing, eliminating, and efficiently managing the economic impact of these exposures as effectively as possible. Fiscal year ending June 30. We assumed responsibility for these claims in our agreement to acquire Nokias Devices and Services business and have been substituted for the Nokia defendants. The competitive position of Linux has also benefited from the large number of compatible applications now produced by many commercial and non-commercial software developers. Gross margin percentage decreased slightly. Gross margin increased $3.1 billion or 10% driven by growth in Windows and Search and news advertising. Our success is highly dependent on our ability to attract and retain qualified employees. Despite these increases, we remain dedicated to achieving a net-zero future. We introduced a Hybrid Workplace Flexibility Guide to better support managers and employees as they adapt to new ways of working that shift paradigms, embrace flexibility, promote inclusion, and drive innovation. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. These contracts are not designated as hedging instruments and are included in Other contracts in the tables below. The markets for software, devices, and cloud-based services are dynamic and highly competitive. UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K/A (Amendment No. As of July 2022, weve committed $257 million in financial and technology assistance to the global response to the war in Ukraine, including support for government, businesses, nonprofits, and humanitarian assistance for refugees. We provide for the estimated costs of fulfilling our obligations under hardware and software warranties at the time the related revenue is recognized. Returns and credits are estimated at contract inception and updated at the end of each reporting period if additional information becomes available. Our principal audit procedures related to the Company's revenue recognition for these customer agreements included the following: Income Taxes Uncertain Tax Positions Refer to Note 12 to the financial statements. The objective of this study is twofold: first to identify the constituents that mold the fast fashion retailing business model, and second to discuss how global leader of fast fashion retailing Inditex-Zara's product offering is strongly supported by integration of various supply chain operations. We analyze 43 trillion security signals daily and use the insights to inform increased protections. The segment amounts included in MD&A are presented on a basis consistent with our internal management reporting. Annual General Meeting Recordings - 2022. Business Responsibility & Sustainability Report. In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of June 30, 2022 and 2021, and the results of its operations and its cash flows for each of the three years in the period ended June 30, 2022, in conformity with accounting principles generally accepted in the United States of America. The separate annual accounts of the Parent (Inditex) for 2021 were prepared by the Board of Directors We recognize that progress wont always be linear, and the rate at which we can implement emissions reductions is dependent on many factors that can fluctuate over time. Our new Entra product family includes tools for permissions management, identity governance, and identity verification. 2838 kb. We are committed to designing and marketing first-party devices to help drive innovation, create new device categories, and stimulate demand in the Windows ecosystem. In February 2012, the IRS withdrew its 2011 Revenue Agents Report related to unresolved issues for tax years 2004 to 2006 and reopened the audit phase of the examination. And it deeply informs our longstanding commitment to diversity and inclusion. The supply chains of big fashion retailers provide a good example because the choice of global or local supply depends on whether suppliers rely on efficient transport and logistics systems that let them compensate for higher relative costs compared with developing countries in the case of local supply or the costs deriving from their greater distance to the market in the case of global supply. Comparison of Backlogged Requests from Previous and Current Annual Report Founded in 1975, we develop and support software, services, devices, and solutions that deliver new value for customers and help people and businesses realize their full potential. However, due to the integrated structure of our business, certain revenue recognized and costs incurred by one segment may benefit other segments. Cybersecurity is a significant threat for governments, businesses, and individuals around the world, yet there simply arent enough people with cybersecurity skills to fill open jobs. Compensation cost for stock awards, which include restricted stock units (RSUs) and performance stock units (PSUs), is measured at the fair value on the grant date and recognized as expense, net of estimated forfeitures, over the related service or performance period. Our Performance & Updates 2022 Annual Report Entering the next phase of M&S' transformation as we move from Fixing the Basics to Shaping the Future. In our 2021 Diversity and Inclusion Report, we reported that all racial and ethnic minority employees in the U.S. combined earn $1.006 for every $1.000 earned by their white counterparts, that women in the U.S. earn $1.002 for every $1.000 earned by their counterparts in the U.S. who are men, and women in the U.S. plus our twelve other largest employee geographies representing 86.6% of our global population (Australia, Canada, China, France, Germany, India, Ireland, Israel, Japan, Romania, Singapore, and the United Kingdom) combined earn $1.001 for every $1.000 by men in these countries. In the second quarter of fiscal year 2021, we settled an additional portion of the IRS audits for tax years 2004 to 2013 and made a payment of $1.7 billion, including tax and interest. Our revenue fluctuates quarterly and is generally higher in the second and fourth quarters of our fiscal year. We tested the mathematical accuracy of management's calculations of revenue and the associated timing of revenue recognized in the financial statements. REPORT OF MANAGEMENT ON INTERNAL CONTROL OVER FINANCIAL REPORTING. Windows Commercial products and cloud services revenue increased 11%. Opportunities include: Our employees embrace the growth mindset and take advantage of the formal learning opportunities as well as thousands of informal and on-the-job learning opportunities. Determining whether products and services are considered distinct performance obligations that should be accounted for separately versus together may require significant judgment. Growth of our Gaming business is determined by the overall active user base through Xbox enabled content, availability of games, providing exclusive game content that gamers seek, the computational power and reliability of the devices used to access our content and services, and the ability to create new experiences through first-party content creators. The investments are predominantly U.S. dollar-denominated securities, but also include foreign currency-denominated securities to diversify risk. Zara's brand value worldwide. Microsoft Cloud gross margin percentage decreased slightly to 70%. We account for certain assets and liabilities at fair value. We regularly reevaluate our estimates to assess the adequacy of the recorded warranty liabilities and adjust the amounts as necessary. For access to additional financial information, visit the Investor Relations website online at: www.microsoft.com/investor. In the consolidated income statement, gross profit, EBITDA, EBIT and PBT are defi In addition, certain costs incurred at a corporate level that are identifiable and that benefit our segments are allocated to them. To get a copy of our annual report, you can GO GREEN and Click download an e-copy. Refer to Note 1 Accounting Policies of the Notes to Financial Statements in our fiscal year 2022 Form 10-K for further discussion. Azure faces diverse competition from companies such as Amazon, Google, IBM, Oracle, VMware, and open source offerings. Essential to this is our commitment to continually exercise our growth mindset and confront our fixed mindset with humility, curiosity, compassion, and the recognition that, while none of us will ever be perfect, we can always be better than we are today. The better we represent that diversity inside Microsoft, the more effectively we can innovate for those we seek to empower. This starts with increasing access to digital skills. 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. And more than 29,000 employees volunteered over 720,000 hours to causes they care about. Debt investments are classified as available-for-sale and realized gains and losses are recorded using the specific identification method. 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. As of June 30, 2022, we accrued aggregate legal liabilities of $364 million. 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. Eligible U.S. employees may contribute a portion of their salary into the savings plans, subject to certain limitations. Office Commercial revenue is mainly affected by a combination of continued installed base growth and average revenue per user expansion, as well as the continued shift from Office licensed on-premises to Office 365. Customers are looking to unlock value while simplifying security and management. In addition, all our broker- priced investments have a sufficient level of trading volume to demonstrate that the fair values used are appropriate for these investments. Our commitment to responsibly develop and use technologies like AI is core to who we are. As of June 30, 2022, $40.7 billion remained of our $60 billion share repurchase program. Chief Executive Officer and Im constantly in awe of how our employees bring their passion to work each dayfor each other, for our customers, and for their communities. In order of value, with least valuable assets first. Enterprise Services, including Enterprise Support Services, Microsoft Consulting Services, and Nuance Professional Services, assist customers in developing, deploying, and managing Microsoft server solutions, Microsoft desktop solutions, and Nuance conversational AI and ambient intelligent solutions, along with providing training and certification to developers and IT professionals on various Microsoft products. October 24, 2022. This includes the annual Standards of Business Conduct training. Once technological feasibility is established, software costs are capitalized until the product is available for general release to customers. We regularly review inventory quantities on hand, future purchase commitments with our suppliers, and the estimated utility of our inventory. When it comes to AI, were seeing a paradigm shift as the worlds large AI models become platforms themselves. In July 2022, we completed an assessment of the useful lives of our server and network equipment. Examples include invoicing at the beginning of a subscription term with revenue recognized ratably over the contract period, and multi-year on-premises licenses that are invoiced annually with revenue recognized upfront. The lawsuits also allege an industry- wide conspiracy to manipulate the science and testing around emission guidelines. This share repurchase program commenced in February 2020 and was completed in November 2021. Lead Independent Director, Explore the report Report summary Microsofts culture is grounded in the growth mindset. . 4.4. But There Are Still Opportunities, Roundtable Pros Say. 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. Cost of revenue includes: manufacturing and distribution costs for products sold and programs licensed; operating costs related to product support service centers and product distribution centers; costs incurred to include software on PCs sold by original equipment manufacturers (OEM), to drive traffic to our websites, and to acquire online advertising space; costs incurred to support and maintain online products and services, including datacenter costs and royalties; warranty costs; inventory valuation adjustments; costs associated with the delivery of consulting services; and the amortization of capitalized software development costs. We are creating the tools and platforms that deliver better, faster, and more effective solutions to support new startups, improve educational and health outcomes, and empower human ingenuity. Collaborating with our shareholders, allies in transformation, 5.4. No respite. We have historically paid India withholding taxes on software sales through distributor withholding and tax audit assessments in India. Unearned revenue is generally invoiced annually at the beginning of each contract period for multi-year agreements and recognized ratably over the coverage period. Research and development expenses include payroll, employee benefits, stock-based compensation expense, and other headcount-related expenses associated with product development. We conducted our audit in accordance with the standards of the PCAOB. 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. Demographic Factors This is the study of the human population in terms of their age. Customer mix between consumer, small and medium businesses, and large enterprises. We have learned the impact of our work will not all be felt immediately, and our experience highlights how progress wont always be linear. 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. Adjustments to reconcile net income to net cash from operations: Net recognized gains on investments and derivatives. Hence, the importance of Supply Chain (Management) has appeared. The major classes of assets and liabilities to which we have preliminarily allocated the purchase price were as follows: Following are the details of the purchase price allocated to the intangible assets acquired: On March 9, 2021, we completed our acquisition of ZeniMax Media Inc. (ZeniMax), the parent company of Bethesda Softworks LLC (Bethesda), for a total purchase price of $8.1 billion, consisting primarily of cash. We have lease agreements with lease and non-lease components, which are generally accounted for separately. (71) Securities held in our fixed-income portfolio are subject to different interest rate risks based on their maturities. The COVID-19 pandemic accelerated our capabilities and culture with respect to flexible work. For derivative instruments that are not designated as hedges, gains and losses from changes in fair values are primarily recognized in other income (expense), net. The Microsoft Cloud Solution Provider program offers customers an easy way to license the cloud services they need in combination with the value-added services offered by their systems integrator, managed services provider, or cloud reseller partner. Our contracts with customers often include promises to transfer multiple products and services to a customer. From time to time, we enter into broader cross-license agreements with other technology companies covering entire groups of patents. We test goodwill for impairment annually on May 1 at the reporting unit level, primarily using a discounted cash flow methodology with a peer-based, risk-adjusted weighted average cost of capital. Annual Report 2021. In addition to our main research and development operations, we also operate Microsoft Research. Provisions enacted in the TCJA related to the capitalization for tax purposes of research and experimental expenditures became effective on July 1, 2022. Applying AI to drive insights and act on our customers behalf by understanding and interpreting their needs using natural methods of communication. These controls include model validation, review of key model inputs, analysis of period-over-period fluctuations, and independent recalculation of prices where appropriate. No instances of impairment were identified in our May 1, 2022, May 1, 2021, or May 1, 2020 tests. Talent Solutions provide insights for workforce planning and tools to hire, nurture, and develop talent.
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