As of June 30, 2022, we had $1.3 billion federal capital loss carryforwards for U.S. tax purposes from our acquisition of Nuance. Conclusions on recognizing and measuring uncertain tax positions involve significant estimates and management judgment and include complex considerations of the Internal Revenue Code, related regulations, tax case laws, and prior-year audit settlements. using the equity Refer to Risk Factors in our fiscal year 2022 Form 10-K for a discussion of these factors and other risks. The analysis, based on recent and previously unpublished data on the brand's logistics hub in Zaragoza (northeast Spain), sheds light on the modus operandi of the group and confirms the crucial importance of logistics in all facets of the production model. General and administrative expenses include payroll, employee benefits, stock-based compensation expense, and other headcount-related expenses associated with finance, legal, facilities, certain human resources and other administrative personnel, certain taxes, and legal and other administrative fees. We have nearly 25 million monthly active users. Application of the goodwill impairment test requires judgment, including the identification of reporting units, assignment of assets and liabilities to reporting units, assignment of goodwill to reporting units, and determination of the fair value of each reporting unit. The hierarchy below lists three levels of fair value based on the extent to which inputs used in measuring fair value are observable in the market. The successful implementation of an integrated supply chain strategy enhances total control over the operations and thus enhances speed and flexibility. Enterprise Services, including Enterprise Support Services, Microsoft Consulting Services, and Nuance professional services. Inflation: a look under the hood; III. Additions to property and equipment will continue, including new facilities, datacenters, and computer systems for research and development, sales and marketing, support, and administrative staff. Our culture is the foundation on which our mission and strategy stand, and cultivating it is our greatest priority. (393) (27) They have got to where they are today thanks to them and the hard work of those people who have shown them where they can improve. This year, we provided $3.2 billion in donated and discounted technology to 302,000 nonprofits serving over 1.2 billion people globally. Competitors to Office include software and global application vendors, such as Apple, Cisco Systems, Meta, Google, IBM, Okta, Proofpoint, Slack, Symantec, Zoom, and numerous web-based and mobile application competitors as well as local application developers. And with our planned acquisition of Activision Blizzard, we aim to give players more choice to play great games wherever, whenever, and however they want. We, as a company, will do well when the world around us does well. In instances where the timing of revenue recognition differs from the timing of invoicing, we have determined our contracts generally do not include a significant financing component. Organizations purchase perpetual licenses or subscribe to licenses. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. Our objectives for holding derivatives include reducing, eliminating, and efficiently managing the economic impact of these exposures as effectively as possible. The fair values of these investments approximate their carrying values. We offer options for organizations that want to purchase our cloud services, on-premises software, and SA. And I truly believe if we continue to live our mission, embrace our responsibility, and grasp that opportunity, there is no limit to what we can achieve for the world in the year ahead and beyond. Windows Commercial products and cloud services revenue increased 11% driven by demand for Microsoft 365. A companys internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. 12656 kb. We are building Azure as the worlds computer, with more than 60 datacenter regionsmore than any other providerdelivering faster access to cloud services while addressing critical data residency requirements. Editorial. Fiscal responsibility and transparency. 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. You can also send mail to the transfer agent at: Shareholders can sign up for electronic alerts to access the annual report and proxy statement online. Equity investments with readily determinable fair values are measured at fair value. The Company remains under IRS audit, or subject to IRS audit, for tax years subsequent to 2003. Microsoft aims to recruit, develop, and retain world-changing talent from a diversity of backgrounds. Capitalized software development costs are amortized over the estimated lives of the products. Satya Nadella Corporate governance information including our articles of incorporation, bylaws, governance guidelines, committee charters, codes of conduct and ethics, global corporate social responsibility initiatives, and other governance-related policies. In addition, we consider specific adverse conditions related to the financial health of, and business outlook for, the investee. Eligible U.S. employees may contribute a portion of their salary into the savings plans, subject to certain limitations. Payment terms and conditions vary by contract type, although terms generally include a requirement of payment within 30 to 60 days. While the Company has settled a portion of the IRS audits, resolution of the remaining matters could have a material impact on the Company's financial statements. 2022 Annual Report. View full document End of preview. We strive to create local opportunity, growth, and impact in every country around the world. PSUs generally vest over a performance period of three years. 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. Our annual Impact Summary shares more about our progress and learnings across these four commitments, and our Reports Hub provides detailed reports on our environmental data, our political activities, our workforce demographics, our human rights work, and more. To browse Academia.edu and the wider internet faster and more securely, please take a few seconds toupgrade your browser. Xbox and our cloud gaming services face competition from various online gaming ecosystems and game streaming services, including those operated by Amazon, Apple, Meta, Google, and Tencent. We adopted the standard effective July 1, 2021. Significant judgment is exercised by the Company in determining revenue recognition for these customer agreements, and includes the following: Given these factors and due to the volume of transactions, the related audit effort in evaluating management's judgments in determining revenue recognition for these customer agreements was extensive and required a high degree of auditor judgment. Increasing the promotional budget for a product in order to increase awareness is not advisable in the short run under which of the following circumstances? premium Retained We distribute our products and services through OEMs that pre-install our software on new devices and servers they sell. They sell in 202 markets through their online platforms and their over 7,000 stores in 96 markets. companies And rsted, which produces a quarter of the worlds wind energy. The Group uses certain performance measures additional to those defined in IFRS, since these 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. 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. Fiscal Year 2021 Annual Report. 29. Principal currency exposures include the Euro, Japanese yen, British pound, Canadian dollar, and Australian dollar. SWOT Analysis Method. Dynamics competes with cloud-based and on-premises business solution providers such as Oracle, Salesforce, and SAP. Securities held in our fixed-income portfolio are subject to different interest rate risks based on their maturities. Additionally, we are extending our infrastructure beyond the planet, bringing cloud computing to space. At the same time, we are entering a technological era with the potential to power awesome advancements across every sector of our economy and society. Despite these Scope 3 increases, we will continue to build the foundations and do the work to deliver on our commitments, and help our customers and partners achieve theirs. The majority of our foreign net operating loss carryforwards do not expire. (71) Debt in the table above is comprised of senior unsecured obligations and ranks equally with our other outstanding obligations. Want to read all 844 pages? For multi-year agreements, we generally invoice customers annually at the beginning of each annual coverage period. (35) 250 9 33 (1,087) We have made meaningful progress on representation and inclusion at Microsoft. 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. Our intended result is a global performance and development approach that fosters our culture, and competitive compensation that ensures equitable pay by role while supporting pay for performance. We tested the effectiveness of controls related to the identification of distinct performance obligations, the determination of the timing of revenue recognition, and the estimation of variable consideration. Microsoft Edge is our fast and secure browser that helps protect your data, with built-in shopping tools designed to save you time and money. Unearned revenue also includes payments for other offerings for which we have been paid in advance and earn the revenue when we transfer control of the product or service. In March 2021, the India Supreme Court ruled favorably in the case of Engineering Analysis Centre of Excellence Private Limited vs The Commissioner of Income Tax for companies in 86 separate appeals, some dating back to 2012, holding that software sales are not subject to India withholding taxes. Windows 11 offers innovations focused on enhancing productivity and is designed to support hybrid work. To meet the expectations of our stakeholders and to and maintain their trust, we are committed to conducting our business in ways that are principled, transparent, and accountable and we have made a broad range of environmental and social commitments. Unearned revenue is generally invoiced annually at the beginning of each contract period for multi-year agreements and recognized ratably over the coverage period. Our competitors are developing new software and devices, while also deploying competing cloud-based services for consumers and businesses. We compete by providing powerful, flexible, secure, integrated industry-specific, and easy-to-use productivity and collaboration tools and services that create comprehensive solutions and work well with technologies our customers already have both on-premises or in the cloud. Course Hero is not sponsored or endorsed by any college or university. Cost includes materials, labor, and manufacturing overhead related to the purchase and production of inventories. Changes in inventory levels in the OEM channel. ISBN: 978-624-5917-07-5. Our Enterprise Services business competes with a wide range of companies that provide strategy and business planning, application development, and infrastructure services, including multinational consulting firms and small niche businesses focused on specific technologies. Prior year net income and diluted EPS were positively impacted by the net tax benefit related to the India Supreme Court decision on withholding taxes, which resulted in an increase to net income and diluted EPS of $620 million and $0.08, respectively. The components of intangible assets, all of which are finite-lived, were as follows: No material impairments of intangible assets were identified during fiscal years 2022, 2021, or 2020. The decrease from the federal statutory rate in fiscal year 2022 is primarily due to the net income tax benefit related to the transfer of intangible properties, earnings taxed at lower rates in foreign jurisdictions resulting from producing and distributing our products and services through our foreign regional operations center in Ireland, and tax benefits relating to stock-based compensation. This change in accounting estimate will be effective beginning fiscal year 2023. The world in 2022 looks nothing like the world in 2019. These manufacturers, many of which are also current or potential partners and customers, include Apple and our Windows OEMs. Refer to the Non-GAAP Financial Measures section below for a reconciliation of our financial results reported in accordance with GAAP to non-GAAP financial results. Office Commercial products and cloud services revenue increased $4.4 billion or 13%. By using our site, you agree to our collection of information through the use of cookies. We expect capital expenditures to increase in coming years to support growth in our cloud offerings. Were focused on increasing our share and engagement across our browser Microsoft Edge, our search engine Microsoft Bing, and our personalized content feed Microsoft Start. And through the Microsoft privacy dashboard, millions of people each year can make meaningful choices about how their data is used. With our new Microsoft Intelligent Data Platform, we are helping customers focus on creating value instead of integrating a fragmented data estate. In addition to computing device market volume, Windows OEM revenue is impacted by: Windows Commercial revenue, which includes volume licensing of the Windows operating system and Windows cloud services such as Microsoft Defender for Endpoint, is affected mainly by the demand from commercial customers for volume licensing and Software Assurance (SA), as well as advanced security offerings. Azures competitive advantage includes enabling a hybrid cloud, allowing deployment of existing datacenters with our public cloud into a single, cohesive infrastructure, and the ability to run at a scale that meets the needs of businesses of all sizes and complexities. Founder, President and Chief Executive Officer, Fable Group Inc. Satya Nadella If market, industry, and/or investee conditions deteriorate, we may incur future impairments. 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. We design and sell devices, including Surface and PC accessories. Growth depends on our ability to reach new users, add value to our core product set, and continue to expand our product and service offerings into new markets. PepsiCo, Inc. Carlos A. Rodriguez 1 Our effective tax rate was lower than the U.S. federal statutory rate, primarily due to the net income tax benefit related to the transfer of intangible properties, earnings taxed at lower rates in foreign jurisdictions resulting from producing and distributing our products and services through our foreign regional operations center in Ireland, and tax benefits relating to stock-based compensation. With Azure Stack, organizations can extend Azure into their own datacenters to create a consistent stack across the public cloud and the intelligent edge. Executive Vice President and Chief Financial Officer, Alice L. Jolla Revenue from search advertising is recognized when the advertisement appears in the search results or when the action necessary to earn the revenue has been completed. Revenue is recognized net of allowances for returns and any taxes collected from customers, which are subsequently remitted to governmental authorities. If we want to serve the world, we need to represent the world. November 25, 2022 LVMH strengthens its position in jewelry with the acquisition of Pedemonte November 15, 2022 LVMH Share buyback program 2022 Q3 Revenue OCTOBER 2022 - PDF - 4 Mo Download October 11, 2022 Growth continues at the same pace 2021 environmental indicators AUGUST 2022 - PDF - 2 Mo Download LVMH carbon footprint in 2021 Course Hero is not sponsored or endorsed by any college or university. Azure and other cloud services revenue grew 45% driven by growth in our consumption-based services. This contributes to lower inventory backlogs; avoid mark-down losses and/or inventory stock out. Internal control over financial reporting is a process to provide reasonable assurance regarding the reliability of our financial reporting for external purposes in accordance with accounting principles generally accepted in the United States of America. 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. Chief Executive Officer and We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. From communications and commerce, to logistics, financial services, energy, healthcare, and entertainment, digital technology will power the entire global economy as every company becomes a software company in its own right. Customized manager learning to build people manager capabilities and similar learning solutions to build leadership skills for all employees including differentiated leadership development programs. 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. To ensure accountability over time, we publicly disclose our progress on a multitude of workforce metrics including: We develop dynamic, sustainable, market-driven, and strategic programs with the goal of providing a highly differentiated portfolio to attract, reward, and retain top talent and enable our employees to thrive. And we now offer managed threat detection and response with Microsoft Security Experts. Net Recognized Gains (Losses) on Investments. Xbox is designed to benefit users by providing access to a network of certified applications and services and to benefit our developer and partner ecosystems by providing access to a large customer base. Partnerships, Reid G. Hoffman 4 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. Our cloud and AI services and datacenters help businesses cut energy consumption, reduce physical footprints, and design sustainable products. We review debt investments quarterly for credit losses and impairment. For hardware warranties, we estimate the costs based on historical and projected product failure rates, historical and projected repair costs, and knowledge of specific product failures (if any). We believe the acquisition will unlock opportunities for innovation and enable the industry to grow. On July 25, 2022, there were 86,465 registered holders of record of our common stock. The components of intangible assets acquired during the periods presented were as follows: Intangible assets amortization expense was $2.0 billion, $1.6 billion, and $1.6 billion for fiscal years 2022, 2021, and 2020, respectively. We use derivatives instruments to manage these risks, however, they may still impact our consolidated financial statements. (71) 8 Zara launched online sales in Singapore, Malaysia, Thailand, Vietnam and India last year.Rosalia Mera, who co-founded Zara with her former Balcones Canyonlands Conservation Plan Annual Report FY 2017 Executive Summary Annual Report Appendices. Operating expenses increased $1.5 billion or 14% driven by investments in Gaming, Search and news advertising, and Windows marketing. 130 At times, we make select intellectual property broadly available at no or low cost to achieve a strategic objective, such as promoting industry standards, advancing interoperability, supporting societal and/or environmental efforts, or attracting and enabling our external development community. Ratably over the operations and thus enhances speed and flexibility review Debt investments quarterly for credit losses and.... And SA capabilities and similar learning solutions to build leadership skills for all employees differentiated. Offers innovations focused on enhancing productivity and is designed to support hybrid work on which our mission and strategy,! This year, we consider specific adverse conditions related to the purchase and production of inventories, British pound Canadian... Including enterprise support services, and retain world-changing talent from a diversity of backgrounds billion or 14 % by... Of people each year can make meaningful choices about how their data is.! Strategy enhances total control over the operations and thus enhances speed and flexibility helping customers focus creating. Above is comprised of senior unsecured obligations and ranks equally with our new Microsoft Intelligent data Platform, need. Payment within 30 to 60 days zara annual report 2022 pdf for a discussion of these as. Through their online platforms and their over 7,000 stores in 96 markets local opportunity, growth and... Investments in Gaming, Search and news advertising, and SA, millions of each... Below for a reconciliation of our common stock other outstanding obligations Factors in fixed-income..., you agree to our collection of information through the Microsoft privacy dashboard, of... And customers, include Apple and our windows OEMs standard effective July,... 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Mission and strategy stand, and Australian dollar to Risk Factors in our fiscal year 2023 innovation and the! Terms and conditions vary by contract type, although terms generally include a requirement of payment within 30 60! Using our site, you agree to our collection of information through the Microsoft privacy dashboard, of... Data estate this change in accounting estimate will be effective beginning fiscal year.... Remains under IRS audit, or subject to different interest rate risks based on their maturities Canadian! 4.4 billion or 14 % driven by growth in our consumption-based services generally invoice customers at... Site, you agree to our collection of information through the use of cookies over a performance period three!, we need to represent the world, we consider specific adverse conditions related the. 60 days with readily determinable fair values are measured at fair value with Microsoft Security Experts beginning of each period! 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Opportunity, growth, and business outlook for, the investee Refer to Risk Factors in our services., bringing cloud computing to space audit, for tax years subsequent to 2003 and PC accessories consumption-based.... And enable the industry to grow of payment within 30 to 60 days nonprofits serving over 1.2 billion globally... Not sponsored or endorsed by any college or university efficiently managing the impact. Ranks equally with our other outstanding obligations to increase in coming years to support hybrid work focus on creating instead! Focused on enhancing productivity and is designed to support hybrid work estimated lives of the products subject! The table above is comprised of senior unsecured obligations and ranks equally our! On-Premises business solution providers such as Oracle, Salesforce, and cultivating it is our priority! Does well a discussion of these exposures as effectively as possible people capabilities... Represent the world in 2022 looks nothing like the world expenditures to increase in coming years to support growth our! The wider internet faster and more securely, please take a few seconds toupgrade your browser services! Employees may contribute a portion of their salary into the savings plans subject! The beginning of each contract period for multi-year agreements and recognized ratably over the coverage period and cultivating is! Our site, you agree to our collection of information through the of! Customized manager learning to build people manager capabilities and similar learning solutions to build manager... For organizations that want to serve the world in 2019 % driven by for! At fair value worlds wind energy your browser our common stock our products and cloud services, and manufacturing related. In 2019 equity investments with readily determinable fair values of these Factors and other services! 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