We strive to include others by holding ourselves accountable for diversity, driving global systemic change in our workplace and workforce, and creating an inclusive work environment. We selected a sample of customer agreements and performed the following procedures: Obtained and read contract source documents for each selection, including master agreements, and other documents that were part of the agreement. We advocate for strong privacy laws that require companies, including ours, to be accountable and responsible in their collection and use of personal data. In the coming years, technology as a percentage of GDP will double from 5% to 10% and beyond, as technology moves from a back-office cost center to a defining feature of every product and service. Presentation (Video) Presentation (Slides) 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. Collaborating to safeguard the planet. Explore the report Report summary Annual report 2022 Download. 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. And, through our AI for Humanitarian Action initiative, were helping organizations harness the power of AI to improve their disaster preparedness, response, and recovery. As the digital and physical worlds come together, were also leading in the industrial metaverse. Our fixed-income portfolio is diversified and consists primarily of investment-grade securities. Determining whether products and services are considered distinct performance obligations that should be accounted for separately versus together may require significant judgment. If we have plans to sell the security or it is more likely than not that we will be required to sell the security before recovery, then a decline in fair value below cost is recorded as an impairment charge in other income (expense), net and a new cost basis in the investment is established. 130 Customers may purchase perpetual licenses or subscribe to licenses, which provide customers with the same functionality and differ mainly in the duration over which the customer benefits from the software. While we intend to defend these matters vigorously, adverse outcomes that we estimate could reach approximately $600 million in aggregate beyond recorded amounts are reasonably possible. Office Consumer products and cloud services revenue increased 11% and Microsoft 365 Consumer subscribers grew to 59.7 million. Sorry, preview is currently unavailable. Goodwill is tested for impairment at the reporting unit level (operating segment or one level below an operating segment) on an annual basis (May 1 for us) and between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value. Being a global-scale cloud, Azure uniquely offers hybrid consistency, developer productivity, AI capabilities, and trusted security and compliance. Collaborating with our people, the engine of that transformation, 5.2. Gross margin and operating income both included an unfavorable foreign currency impact of 2%. Revenue from certain contracts is allocated among the segments based on the relative value of the underlying products and services, which can include allocation based on actual prices charged, prices when sold separately, or estimated costs plus a profit margin. It is classified as operating in the Family Clothing Stores industry. Windows also plays a critical role in fueling our cloud business with Windows 365, a desktop operating system thats also a cloud service. As a result, no collateral was required to be posted. Annual Status of Education Report (ASER) 2022: The Annual Status of Education Report (ASER) released today revealed that almost all (98.4%) students in the age bracket of 6-14 years are now enrolled in schools. Azure and other cloud services revenue grew 45% driven by growth in our consumption-based services. There are now more than 1.4 billion monthly active devices running Windows 10 or Windows 11. Windows IoT extends the power of Windows and the cloud to intelligent systems by delivering specialized operating systems, tools, and services for use in embedded devices. 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. Since 1976, the Spanish network of stores has been expanded in a great number of cities all over the world. In Singapore, women's coat usually sells at 19-26 dollars in Zara's shop. We also distributed a further US$19.6 billion as an in specie dividend through the merger of our Petroleum . Inventories are stated at average cost, subject to the lower of cost or net realizable value. Refer to Risk Factors in our fiscal year 2022 Form 10-K for a discussion of these factors and other risks. We evaluated the appropriateness and consistency of management's methods and assumptions used in the identification, recognition, measurement, and disclosure of uncertain tax positions, which included testing the effectiveness of the related internal controls. Microsoft Power Platform is helping domain experts drive productivity gains with low-code/no-code tools, robotic process automation, virtual agents, and business intelligence. We invite you to submit any questions via the proxy voting site at www.proxyvote.com. Server products and cloud services revenue increased $14.7 billion or 28% driven by Azure and other cloud services. 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. 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. Azure Synapse brings together data integration, enterprise data warehousing, and big data analytics in a comprehensive solution. Zara has got only 4.4% of its stores comprising of 44 retail stores in the US out of 2270 total retail stores. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. As of June 30, 2022, the primary unresolved issues for the IRS audits relate to transfer pricing, which could have a material impact in our consolidated financial statements when the matters are resolved. There is no more powerful input than digital technology to drive the worlds economic output. This is the core thesis for our being as a company, but its not enough. And rsted, which produces a quarter of the worlds wind energy. SA is included. Share Highlights from fiscal year 2022 compared with fiscal year 2021 included: 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. Of the total employed people, 85,000 were in operations, including manufacturing, distribution, product support, and consulting services; 73,000 were in product research and development; 47,000 were in sales and marketing; and 16,000 were in general and administration. Microsofts culture is grounded in the growth mindset. 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 . This year, we continued our journey to address racial injustice and inequity by increasing representation within Microsoft, engaging our ecosystem, and strengthening our communities. We are subject to income tax in many jurisdictions outside the U.S. Our operations in certain jurisdictions remain subject to examination for tax years 1996 to 2021, some of which are currently under audit by local tax authorities. But skills alone arent enoughwe need to help people better prepare for and connect to jobs. The Company engaged Deloitte & Touche LLP, an independent registered public accounting firm, to audit and render an opinion on the consolidated financial statements and internal control over financial reporting in accordance with the standards of the Public Company Accounting Oversight Board (United States). 5 Oct 2022. Gross margin percentage was relatively unchanged. Microsoft is a technology company whose mission is to empower every person and every organization on the planet to achieve more. 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 a corporation, our purpose and actions must be aligned with addressing the worlds problems, not creating new ones. Our contracts with customers often include promises to transfer multiple products and services to a customer. We review debt investments quarterly for credit losses and impairment. Our cloud and AI services and datacenters help businesses cut energy consumption, reduce physical footprints, and design sustainable products. Although we were not a party to the appeals, our software sales in India were determined to be not subject to withholding taxes. Course Hero is not sponsored or endorsed by any college or university. We consider all highly liquid interest-earning investments with a maturity of three months or less at the date of purchase to be cash equivalents. Diluted EPS is computed based on the weighted average number of shares of common stock plus the effect of dilutive potential common shares outstanding during the period using the treasury stock method. 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. RH 2022 Annual Meeting of Shareholders. We identified four attributes that allow growth mindset to flourish: Our employee listening systems enable us to gather feedback directly from our workforce to inform our programs and employee needs globally. of the Inditex Group We measure the fair value of PSUs using a Monte Carlo valuation model. 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. Our fixed-income portfolio is diversified and consists primarily of investment-grade securities. 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. Investments with maturities beyond one year may be classified as short-term based on their highly liquid nature and because such marketable securities represent the investment of cash that is available for current operations. Expanding in Asia & the US The US is the biggest market in the fashion industry. However Zara also boasts the lowest year-end inventory levels in the fashion industry. 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. Vice Chair and President, Christopher C. Capossela These systems are augmented by written policies, an organizational structure providing division of responsibilities, careful selection and training of qualified personnel, and a program of internal audits. Our gaming platform is designed to provide a variety of entertainment through a unique combination of content, community, and cloud. 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. Product Revenue and Service and Other Revenue. In 2014, Microsoft was informed that Chinas State Agency for Market Regulation (SAMR) (formerly State Administration for Industry and Commerce) had begun a formal investigation relating to Chinas Anti-Monopoly Law, and the SAMR conducted onsite inspections of Microsoft offices in Beijing, Shanghai, Guangzhou, and Chengdu. Actual results and outcomes may differ from managements estimates and assumptions due to risks and uncertainties. If market, industry, and/ or investee conditions deteriorate, we may incur future impairments. Although we continued to make progress on several of our goals with an overall reduction in Scope 1 and Scope 2 emissions, our Scope 3 emissions increased, due in large part to significant global datacenter expansions and the growth in Xbox sales and usage. 2022 Annual Report; Financial Highlights; Letter to Shareowners. 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. 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. Provisions enacted in the TCJA related to the capitalization for tax purposes of research and experimental expenditures became effective on July 1, 2022. Organizations also license our products and services indirectly, primarily through licensing solution partners (LSP), distributors, value-added resellers (VAR), and retailers. We recognize an asset for the incremental costs of obtaining a contract with a customer if we expect the benefit of those costs to be longer than one year. You choose them. Our mission to empower every person and every organization on the planet to achieve more has never been more urgent or more necessary. We strive to create local opportunity, growth, and impact in every country around the world. As of June 30, 2022, we employed approximately 221,000 people on a full-time basis, 122,000 in the U.S. and 99,000 internationally. Management is responsible for the preparation of the consolidated financial statements and related information that are presented in this report. LinkedIn revenue is mainly affected by demand from enterprises and professional organizations for subscriptions to Talent Solutions, Sales Solutions, and Premium Subscriptions offerings, as well as member engagement and the quality of the sponsored content delivered to those members to drive Marketing Solutions. These annual accounts were prepared in accordance with the International Financial Reporting Dilutive potential common shares include outstanding stock options and stock awards. Our common stock is traded on the NASDAQ Stock Market under the symbol MSFT. 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