MICROSOFT CORP
NAME_AND_TITLE
Form Type: 10-K
Period End: Jun 30, 2011
Date Filed: Jul 28, 2011
EXECUTIVE OFFICERS OF THE REGISTRANT
Our executive officers as of July 28, 2011 were as follows:
Name
Age
Position with the Company
----------------------------------------------------------------------------------------------------------------------------------------------Steven A. Ballmer
Lisa E. Brummel
Kurt D. DelBene
Peter S. Klein
Craig J. Mundie
Satya Nadella
Steven Sinofsky
Bradford L. Smith
B. Kevin Turner
55
51
51
48
62
43
45
52
46
Quarter Ended
September 30
December 31
March 31
June 30
Fiscal Year
--------------------------------------------------------------------------------------------------------------------------------------Fiscal Year 2011
High
$
26.41 $
28.87 $
29.46 $
26.87 $
29.46
Low
$
22.73 $
23.78 $
24.68 $
23.65 $
22.73
--------------------------------------------------------------------------------------------------------------------------------------Fiscal Year 2010
High
Low
$
$
26.25
22.00
$
$
31.50
24.43
$
$
31.24
27.57
$
$
31.58
22.95
$
$
31.58
22.00
II, Item 8 of this Form 10-K) for information regarding dividends and share
repurchases by quarter. Following are our monthly stock repurchases for the
Total Number
Average
of Shares
Price Paid
Period
Purchased
per Share
-----------------------------------------------------------------------------------------------------------------------------------------------------------------
Total Number of
Shares Purchased as
Approximate Dollar Value of
Part of Publicly
Shares that May Yet be
Announced Plans
Purchased under the Plans
or Programs
or Programs
----------------------------------------------------------------------------------------------------------(in millions)
0 $
13,851
0 $
13,851
65,839,984 $
12,221
----------------------------------------------------------------------------------------------------------65,839,984
--------------------------------------
2011
2010
$
$
$
$
69,943
27,161
23,150
2.69
$
$
$
$
62,484
24,098
18,760
2.10
0.64
0.52
$
$
$
$
52,772
108,704
22,847
57,083
$
$
$
$
36,788
86,113
13,791
46,175
----------------------------------------------------------------------------------------------2009
2008
2007
$
$
$
$
58,437
20,363
14,569
1.62
$
$
$
$
60,420
$
22,271 (a) $
17,681 (a) $
1.87
$
51,122
18,438
14,065
1.42
0.52
0.44
0.40
$
$
$
$
31,447
77,888
11,296
39,558
$
$
$
$
23,662
72,793
6,621
36,286
$
$
$
$
23,411
63,171
8,320
31,097
$
$
$
69,943
27,161
2.69
Percentage
Percentage
Change 2011
Change 2010
2010
2009 Versus 2010
Versus 2009
--------------------------------------------------------------------------------------------------------------$
$
$
62,484
24,098
2.10
-----------------------------------------
$
$
$
58,437
20,363
1.62
12%
13%
28%
7%
18%
30%
$
$
19,024
12,281
$
$
19,494
13,034
$
$
15,847
9,790
Percentage
Percentage
Change 2011
Change 2010
Versus 2010
Versus 2009
--------------------------------------------------------------2%
-6%
23%
33%
$
$
17,096
6,608
$
$
15,378
5,539
$
$
14,601
4,816
Percentage
Percentage
Change 2011
Change 2010
Versus 2010
Versus 2009
-------------------------------------------------------------11%
19%
5%
15%
$
$
2,528 $
(2,557) $
2,201 $
(2,337) $
2,121
(1,641)
Percentage
Percentage
Change 2011
Change 2010
Versus 2010
Versus 2009
-------------------------------------------------------------15%
-9%
4%
-42%
$
$
22,186
14,124
$
$
19,076
11,504
$
$
19,257
11,365
Percentage
Percentage
Change 2011
Change 2010
Versus 2010
Versus 2009
-------------------------------------------------------------16%
23%
-1%
1%
$
$
8,913
1,324
$
$
6,168
618
$
$
6,416
351
Percentage
Percentage
Change 2011
Change 2010
Versus 2010
Versus 2009
-------------------------------------------------------------45%
114%
-4%
76%
(4,619) $
(4,260) $
(4,318)
Percentage
Percentage
Change 2011
Change 2010
Versus 2010
Versus 2009
--------------------------------------------------------------8%
1%
15,577 $
22%
12,395
20%
Percentage
Percentage
Change 2011
Change 2010
2009 Versus 2010
Versus 2009
-------------------------------------------------------------------------------------$
12,155
21% 2ppt
26%
2%
(1)ppt
9,043 $
13%
8,714 $
14%
9,010
15%
Percentage
Percentage
Change 2011
Change 2010
Versus 2010
Versus 2009
-------------------------------------------------------------4%
(1)ppt
-3%
(1)ppt
13,940 $
20%
13,214 $
21%
12,879
22%
Percentage
Percentage
Change 2011
Change 2010
Versus 2010
Versus 2009
-------------------------------------------------------------5%
(1)ppt
3%
(1)ppt
4,222 $
6%
4,063 $
7%
4,030
7%
Percentage
Percentage
Change 2011
Change 2010
Versus 2010
Versus 2009
-------------------------------------------------------------4%
(1)ppt
1%
0ppt
(In millions)
----------------------------------------------------------------------------------------------------------------------------------------------------------------Year Ended June 30,
2011
-------------------------------------------------------------2010
$
843
(151)
348
(140)
1
14
---------------------$
915
----------------------
2009
$
744
(38)
(125)
(558)
(509)
(56)
---------------------$
(542)
----------------------
Stated
Effective
Interest
Interest
Interest
Due Date
Face Value
Rate
Rate
Record Date
----------------------------------------------------------------------------------------------------------------------------------------------------------------(In millions)
Notes
September 27, 2013
$
1,000
June 1, 2014
2,000
September 25, 2015
1,750
February 8, 2016
750
June 1, 2019
1,000
October 1, 2020
1,000
February 8, 2021
500
June 1, 2039
750
October 1, 2040
1,000
February 8, 2041
1,000
------------------------------------------------------------------------Total
10,750
Convertible Debt
June 15, 2013
1,250
Total unamortized discount
(79)
------------------------------------------------------------------------Total
$
11,921
-----------------------
0.88%
2.95%
1.63%
2.50%
4.20%
3.00%
4.00%
5.20%
4.50%
5.30%
1.00%
3.05%
1.80%
2.64%
4.38%
3.14%
4.08%
5.24%
4.57%
5.36%
0.00%
1.85%
March 15
May 15
March 15
February 1
May 15
March 15
February 1
May 15
March 15
February 1
Interest
Interest
Interest
Pay Date
Record Date
Pay Date
-------------------------------------------------------------------------------------
March 27
June 1
March 25
February 8
June 1
April 1
February 8
June 1
April 1
February 8
September 15
November 15
September 15
August 1
November 15
September 15
August 1
November 15
September 15
August 1
September 27
December 1
September 25
August 8
December 1
October 1
August 8
December 1
October 1
August 8
Dividend
Declaration Date
Per Share
Record Date
Total Amount
----------------------------------------------------------------------------------------------------------------------------------------------------------------(In millions)
Fiscal Year 2011
September 21, 2010
December 15, 2010
March 14, 2011
June 15, 2011
$
$
$
$
0.16
0.16
0.16
0.16
$
$
$
$
1,363
1,349
1,350
1,340
$
$
$
$
0.13
0.13
0.13
0.13
$
$
$
$
1,152
1,139
1,130
1,118
Payment Date
--------------------------------------------------
December 9, 2010
March 10, 2011
June 9, 2011
September 8, 2011
(In millions)
2012 2013-2015
2016-2018
----------------------------------------------------------------------------------------------------------------------------------------------------------------Long-term debt: (a)
Principal payments
$0
$
4,250
Interest payments
344
959
Construction commitments (b)
263
0
Operating leases (c)
481
964
Purchase commitments (d)
5,580
355
Other long-term liabilities (e)
0
92
------------------------------------------------------------------------------ ---------------------Total contractual obligations
$
6,668 $
6,620
---------------------- ----------------------
2,500
720
0
380
0
22
---------------------$
3,622
----------------------
2019 and
Thereafter
Total
---------------------------------------------------------------
5,250
3,228
0
127
0
22
---------------------$
8,627
----------------------
12,000
5,251
263
1,952
5,935
136
----------------------$
25,537
-----------------------
June 30,
2011
Risk Categories
Foreign currency
Interest rate
Equity
Commodity
$
$
$
$
86
58
212
28
$
$
$
$
57
58
183
19
2011
----------------------------------------------------------------Average
High
Low
$
$
$
$
67
56
211
22
$
$
$
$
121
65
230
30
$
$
$
$
40
50
184
18
2011
Revenue
$
69,943
Operating expenses:
Cost of revenue
15,577
Research and development
9,043
Sales and marketing
13,940
General and administrative
4,222
-------------------------------------------------------------------------------------------------------Total operating expenses
42,782
-------------------------------------------------------------------------------------------------------Operating income
27,161
Other income (expense)
910
-------------------------------------------------------------------------------------------------------Income before income taxes
28,071
Provision for income taxes
4,921
-------------------------------------------------------------------------------------------------------Net income
$
23,150
----------------------Earnings per share:
Basic
Diluted
$
$
2.73
2.69
2010
$
12,395
8,714
13,214
4,063
----------------------38,386
----------------------24,098
915
----------------------25,013
6,253
----------------------$
18,760
-----------------------
$
$
8,490
8,593
$
0.64
62,484
2.13
2.10
8,813
8,927
$
0.52
----------------------------------------
2009
$
58,437
12,155
9,010
12,879
4,030
----------------------38,074
----------------------20,363
(542)
----------------------19,821
5,252
----------------------$
14,569
-----------------------
$
$
1.63
1.62
8,945
8,996
$
0.52
(In millions)
----------------------------------------------------------------------------------------------------------------------------------------------------------------June 30,
2011
Assets
Current assets:
Cash and cash equivalents
$
9,610
Short-term investments (including securities loaned of
$1,181 and $62)
43,162
----------------------------------------------------------------------------------------------------------------------Total cash, cash equivalents, and short-term investments
52,772
Accounts receivable, net of allowance for doubtful
accounts of $333 and $375
14,987
Inventories
1,372
Deferred income taxes
2,467
Other
3,320
----------------------------------------------------------------------------------------------------------------------Total current assets
74,918
Property and equipment, net of accumulated depreciation of
$9,829 and $8,629
8,162
Equity and other investments
10,865
Goodwill
12,581
Intangible assets, net
744
Other long-term assets
1,434
----------------------------------------------------------------------------------------------------------------------Total assets
$
108,704
--------------------------Liabilities and stockholders' equity
Current liabilities:
Accounts payable
$
4,197
Short-term debt
0
Accrued compensation
3,575
Income taxes
580
Short-term unearned revenue
15,722
Securities lending payable
1,208
Other
3,492
----------------------------------------------------------------------------------------------------------------------Total current liabilities
28,774
Long-term debt
11,921
------------------------------------------
2010
5,505
31,283
------------------------36,788
13,014
740
2,184
2,950
------------------------55,676
7,630
7,754
12,394
1,158
1,501
------------------------$
86,113
-------------------------
4,025
1,000
3,283
1,074
13,652
182
2,931
------------------------26,147
4,939
1,178
229
7,445
------------------------39,938
-------------------------
62,856
(16,681)
------------------------46,175
------------------------$
86,113
-------------------------
(In millions)
----------------------------------------------------------------------------------------------------------------------------------------------------------------Year Ended June 30,
2011
Operations
Net income
$
23,150
Adjustments to reconcile net income to net cash
from operations:
Depreciation, amortization, and other
2,766
Stock-based compensation expense
2,166
Net recognized losses (gains) on investments and
derivatives
(362)
Excess tax benefits from stock-based compensation
(17)
Deferred income taxes
2
Deferral of unearned revenue
31,227
Recognition of unearned revenue
(28,935)
Changes in operating assets and liabilities:
Accounts receivable
(1,451)
Inventories
(561)
Other current assets
(1,259)
Other long-term assets
62
Accounts payable
58
Other current liabilities
(1,146)
Other long-term liabilities
1,294
-------------------------------------------------------------------------------------------------------------------------Net cash from operations
26,994
-------------------------------------------------------------------------------------------------------------------------Financing
Short-term debt borrowings (repayments),
maturities of 90 days or less, net
(186)
Proceeds from issuance of debt, maturities longer
than 90 days
6,960
Repayments of debt, maturities longer than 90
days
(814)
Common stock issued
2,422
Common stock repurchased
(11,555)
Common stock cash dividends paid
(5,180)
Excess tax benefits from stock-based compensation
17
Other
(40)
--------------------------------------------------------------------2010
18,760
2009
14,569
2,673
1,891
2,562
1,708
(208)
(45)
(220)
29,374
(28,813)
683
(52)
762
24,409
(25,426)
(2,238)
2,215
(44)
255
464
(677)
(223)
(273)
844
(671)
451
(2,700)
1,407
1,673
------------------------- ------------------------24,073
19,037
------------------------- -------------------------
(991)
1,178
4,167
4,796
(2,986)
2,311
(11,269)
(4,578)
45
10
(228)
579
(9,353)
(4,468)
52
(19)
------------------------- ------------------------(13,291)
(7,463)
------------------------- ------------------------(1,977)
(3,119)
(245)
(868)
(30,168)
(36,850)
7,453
6,191
15,125
19,806
(1,502)
(930)
------------------------- ------------------------(11,314)
(15,770)
------------------------- ------------------------(39)
------------------------(571)
6,076
------------------------$
5,505
-------------------------
(67)
------------------------(4,263)
10,339
------------------------$
6,076
-------------------------
(In millions)
----------------------------------------------------------------------------------------------------------------------------------------------------------------Year Ended June 30,
2011
--------------------------------------------------------------------2010
2009
62,382 $
62,849
2,311
567
(3,113)
(2,611)
1,891
1,708
(647)
(128)
32
(3)
------------------------- ------------------------62,856
62,382
------------------------- ------------------------(22,824)
18,760
(26,563)
14,569
27
265
(206)
------------------------18,846
(4,547)
(8,156)
------------------------(16,681)
------------------------$
46,175
-------------------------
302
(233)
(240)
------------------------14,398
(4,620)
(6,039)
------------------------(22,824)
------------------------$
39,558
-------------------------
(In millions)
------------------------------------------------------------------------------------------------------------------------------Year Ended June 30,
2011
2010
$
451
45
(121)
---------------------$
375
----------------------
2009
$
153
360
(62)
---------------------$
451
----------------------
2011
$
23,150
$
$
2.73
2.69
----------------------------------------------------------------2010
$
18,760
2009
$
14,569
8,813
8,945
114
51
----------------------- ----------------------8,927
8,996
----------------------- -----------------------
$
$
2.13
2.10
$
$
1.63
1.62
2011
2010
21
28
--------------------------------------2009
342
(In millions)
----------------------------------------------------------------------------------------------------------------------------------------------------------------Year Ended June 30,
2011
-------------------------------------------------------------2010
$
843
(151)
348
(140)
1
14
---------------------$
915
----------------------
2009
$
744
(38)
(125)
(558)
(509)
(56)
---------------------$
(542)
----------------------
2011
2010
$
(69)
605
(188)
---------------------$
348
----------------------
--------------------------------------2009
$
(862)
1,634
(897)
---------------------$
(125)
----------------------
Unrealized
Unrealized
(In millions)
Cost Basis
Gains
Losses
----------------------------------------------------------------------------------------------------------------------------------------------------------------June 30, 2011
Cash
$
1,648
Mutual funds
1,752
Commercial paper
639
Certificates of deposit
598
U.S. government and agency
securities
33,607
Foreign government bonds
658
Mortgage-backed securities
2,307
Corporate notes and bonds
10,575
Municipal securities
441
Common and preferred stock
7,925
Other investments
654
------------------------------------------------------------------------------------------------Total
$
60,804
---------------------------------------------
$0
$0
0
0
0
0
0
0
162
11
121
260
15
2,483
0
0
---------------------- -------------------$
3,052 $
(219)
---------------------- --------------------
Unrealized
Unrealized
(In millions)
Cost Basis
Gains
Losses
----------------------------------------------------------------------------------------------------------------------------------------------------------------June 30, 2010
Cash
Mutual funds
Commercial paper
Certificates of deposit
U.S. government and
1,661 $0
1,120
188
348
$0
0
0
0
0
0
0
agency securities
21,036
167
Foreign government bonds
518
13
0
Mortgage-backed securities
3,137
135
Corporate notes and bonds
7,450
289
Municipal securities
726
22
Common and preferred stock
6,640
1,030
Other investments
507
0
0
------------------------------------------------------------------------------------------------- ---------------------- -------------------Total
$
43,331 $
1,656 $
(445)
--------------------------------------------- ---------------------- --------------------
Cash
Equity
Recorded
and Cash
Short-term
and Other
Basis
Equivalents
Investments
Investments
--------------------------------------------------------------------------------------------------------------------------------------
(7)
(2)
(4)
(11)
(2)
(193)
-
1,648
1,752
639
598
1,648 $0
1,752
414
372
$0
0
225
226
0
0
0
33,762
2,049
31,713
0
667
0
667
0
2,424
0
2,424
0
10,824
3,375
7,449
0
454
0
454
0
10,215
0
0
10,215
654
0
4
650
----------------------- ---------------------- ----------------------- ----------------------$
63,637 $
9,610 $
43,162 $
10,865
----------------------- ---------------------- ----------------------- -----------------------
Cash
Equity
Recorded
and Cash
Short-term
and Other
Basis
Equivalents
Investments
Investments
--------------------------------------------------------------------------------------------------------------------------------------
1,661
1,120
188
348
1,661 $0
1,120
13
68
$0
0
175
280
0
0
0
(1)
(7)
(18)
(1)
(418)
-
21,202
1,822
19,380
0
531
0
531
0
3,265
0
3,265
0
7,721
701
7,020
0
747
120
627
0
7,252
0
0
7,252
507
0
5
502
----------------------- ---------------------- ----------------------- ----------------------$
44,542 $
5,505 $
31,283 $
7,754
----------------------- ---------------------- ----------------------- -----------------------
(7) $0
(2)
0
(3)
14
(10)
25
(2)
0
(146)
206
------------------------------------- -------------------$
(170) $
245
------------------------------------- --------------------
(1) $0
(6)
18
(13)
89
(1)
0
(339)
190
------------------------------------- -------------------$
(360) $
297
------------------------------------- --------------------
Months or Greater
------------------------------------------------Total
Unrealized
Total
Unrealized
Losses
Fair Value
Losses
----------------------------------------------------------------------------------------------
$0
$
484
0
365
(1)
77
(1)
775
0
79
(47)
1,583
-------------------------------- ---------------------$
(49) $
3,363
-------------------------------- ----------------------
(7)
(2)
(4)
(11)
(2)
(193)
-------------------$
(219)
--------------------
Months or Greater
------------------------------------------------Total
Unrealized
Total
Unrealized
Losses
Fair Value
Losses
----------------------------------------------------------------------------------------------
$0
$
216
(1)
123
(5)
1,213
0
66
(79)
2,292
-------------------------------- ---------------------$
(85) $
3,910
-------------------------------- ----------------------
(1)
(7)
(18)
(1)
(418)
-------------------$
(445)
--------------------
Estimated
(In millions)
Cost Basis
Fair Value
------------------------------------------------------------------------------------------------------------------June 30, 2011
Due in one year or less
$
23,982
Due after one year through five years
19,516
Due after five years through 10 years
2,516
Due after 10 years
2,811
------------------------------------------------------------------------------------------Total
$
48,825
-----------------------
24,053
19,733
2,637
2,945
----------------------$
49,368
-----------------------
Foreign
Interest
Exchange
Equity
Rate
Credit
(In millions)
Contracts
Contracts
Contracts
Contracts
----------------------------------------------------------------------------------------------------------------------------------------------------------------June 30, 2011
Assets
Non-designated hedge derivatives:
Short-term investments
$
14 $
179
Other current assets
73
0
----------------------------------------------------------------------------------- -------------------Total
$
87 $
179
Designated hedge derivatives:
Short-term investments
$6
$0
Other current assets
123
0
----------------------------------------------------------------------------------- -------------------Total
$
129 $0
-------------------- -------------------Total assets
$
216 $
179
-------------------- --------------------
$0
$
17
0
0
----------------- ------------------$0
$
17
$0
$0
0
----------------$0
----------------$0
-----------------
0
------------------$0
------------------$
17
-------------------
Liabilities
Non-designated hedge derivatives:
Other current liabilities
$
(91) $
(12)
Designated hedge derivatives:
Other current liabilities
$
(128) $0
----------------------------------------------------------------------------------- -------------------Total liabilities
$
(219) $
(12)
-------------------- --------------------
(9) $
$0
----------------$
(9)
-----------------
(19)
$0
------------------$
(19)
-------------------
Commodity
Total
Contracts
Derivatives
---------------------------------------------------------
$4
$
214
0
73
------------------- -------------------$4
$
287
$0
$6
0
123
------------------- -------------------$0
$
129
------------------- -------------------$4
$
416
------------------- --------------------
(4) $
(135)
$0
$
(128)
------------------- -------------------$
(4) $
(263)
------------------- --------------------
Foreign
Interest
Exchange
Equity
Rate
Credit
(In millions)
Contracts
Contracts
Contracts
Contracts
----------------------------------------------------------------------------------------------------------------------------------------------------------------June 30, 2010
Assets
Non-designated hedge derivatives:
Short-term investments
$
15 $
134
Other current assets
34
0
----------------------------------------------------------------------------------- -------------------Total
$
49 $
134
Designated hedge derivatives:
Short-term investments
$3
$0
Other current assets
563
0
----------------------------------------------------------------------------------- -------------------Total
$
566 $0
-------------------- -------------------Total assets
$
615 $
134
-------------------- --------------------
12 $7
0
0
------------------- ------------------$
12 $7
$0
$0
0
0
------------------- ------------------$0
$0
------------------- ------------------$
12 $7
------------------- -------------------
Liabilities
Non-designated hedge derivatives:
Other current liabilities
$
(60) $
(17)
Designated hedge derivatives:
Other current liabilities
$
(9) $0
----------------------------------------------------------------------------------- -------------------Total liabilities
$
(69) $
(17)
-------------------- --------------------
(33) $
(41)
$0
$0
------------------- ------------------$
(33) $
(41)
------------------- -------------------
Commodity
Total
Contracts
Derivatives
---------------------------------------------------------
$8
$
176
0
34
------------------- -------------------$8
$
210
$0
$3
0
563
------------------- -------------------$0
$
566
------------------- -------------------$8
$
776
------------------- --------------------
(5) $
(156)
$0
$
(9)
------------------- -------------------$
(5) $
(165)
------------------- --------------------
(In millions)
--------------------------------------------------------------------------------------------------------------------------------Year Ended June 30,
2011
2010
2009
121
(120)
---------------------$1
----------------------
Equity Contracts
Derivatives
$0
$0
Hedged items
0
0
----------------------------------------------------------------------------------- ---------------------Total
$0
$0
---------------------- ----------------------
191
(211)
---------------------$
(20)
----------------------
(In millions)
----------------------------------------------------------------------------------------------------------------------------------------------------------------Year Ended June 30,
2011
Effective Portion
Gain (loss) recognized in OCI, net of tax effect of
$(340), $188 and $472
Gain (loss) reclassified from OCI into revenue
$
$
(632)
(7)
(276)
ange contracts
-------------------------------------------------------------2010
$
$
349
495
2009
$
$
(174) $
876
884
(314)
2011
2010
$
106
12
(4)
22
(1)
---------------------$
135
----------------------
2009
$
(234)
(131)
5
(18)
(126)
---------------------$
(504)
----------------------
(In millions)
Level 1
Level 2
Level 3
----------------------------------------------------------------------------------------------------------------------------------------------------------------June 30, 2011
Assets
Mutual funds
$
1,752
Commercial paper
0
Certificates of deposit
0
U.S. government and agency
securities
23,591
Foreign government bonds
303
Mortgage-backed securities
0
Corporate notes and bonds
0
Municipal securities
0
Common and preferred stock
9,821
Derivatives
8
---------------------------------------------------------------------------Total
$
35,475
-----------------------
$0
$0
639
598
0
0
10,175
0
367
0
2,428
0
10,600
58
454
0
55
5
388
20
----------------------- -------------------$
25,704 $
83
----------------------- --------------------
Liabilities
(In millions)
Level 1
Level 2
Level 3
----------------------------------------------------------------------------------------------------------------------------------------------------------------June 30, 2010
Assets
Mutual funds
$
1,120
Commercial paper
0
Certificates of deposit
0
U.S. government and agency
securities
16,473
Foreign government bonds
239
Mortgage-backed securities
0
Corporate notes and bonds
0
Municipal securities
0
Common and preferred stock
6,988
Derivatives
22
---------------------------------------------------------------------------Total
$
24,842
-----------------------
$0
$0
172
348
4,756
0
294
0
3,264
0
7,460
167
747
0
43
5
745
9
----------------------- -------------------$
17,829 $
181
----------------------- --------------------
Liabilities
Derivatives and other
85
0
0
137 $0
Gross
Fair
Net Fair
Value
Netting (a)
Value
---------------------------------------------------------------------------------------
1,752 $0
639
598
$
0
0
1,752
639
598
33,766
0
33,766
670
0
670
2,428
0
2,428
10,658
0
10,658
454
0
454
9,881
0
9,881
416
(204)
212
----------------------- -------------------- ----------------------$
61,262 $
(204) $
61,058
----------------------- -------------------- -----------------------
$
366 $
(203) $
163
---------------------------------------------------------------------------------------
Gross
Fair
Net Fair
Value
Netting (a)
Value
---------------------------------------------------------------------------------------
1,120 $0
172
348
$
0
0
1,120
172
348
21,229
0
21,229
533
0
533
3,264
0
3,264
7,627
0
7,627
747
0
747
7,036
0
7,036
776
(207)
569
----------------------- -------------------- ----------------------$
42,852 $
(207) $
42,645
----------------------- -------------------- -----------------------
222
(205) $
17
2011
----------------------------------------2010
42,645
1,661
216
502
(544)
62
----------------------$
44,542
-----------------------
Common
Corporate
and
Notes and
Preferred Derivative
(In millions)
Bonds
Stock
Assets
----------------------------------------------------------------------------------------------------------------------------------------------------------------Year Ended June 30, 2011
Common
Corporate
and
Notes and
Preferred Derivative
(In millions)
Bonds
Stock
Assets
----------------------------------------------------------------------------------------------------------------------------------------------------------------Year Ended June 30, 2010
Balance, beginning of period
Total realized and unrealized gains (losses):
Included in other income (expense)
Included in other comprehensive income
253 $5
6
(92)
$5
0
0
4
0
----------------$9
-----------------
$4
Total
-------------------------------------
181
50
(63)
(85)
-------------------$
83
--------------------
$
17
-------------------------------------
Total
-------------------------------------
263
10
(92)
-------------------$
181
--------------------
10
(In millions)
---------------------------------------------------------------------------------------------------------------------------------June 30,
2011
Raw materials
$
232
Work in process
56
Finished goods
1,084
----------------------------------------------------------------------------------------------------------Total
$
1,372
----------------------
2010
$
172
16
552
---------------------$
740
----------------------
(In millions)
--------------------------------------------------------------------------------------------------------------June 30,
2011
Land
$
533
Buildings and improvements
6,521
Leasehold improvements
2,345
Computer equipment and software
6,601
Furniture and equipment
1,991
-------------------------------------------------------------------------------------Total, at cost
17,991
Accumulated depreciation
(9,829)
-------------------------------------------------------------------------------------Total, net
$
8,162
-----------------------
2010
$
526
6,087
2,100
5,673
1,873
----------------------16,259
(8,629)
----------------------$
7,630
-----------------------
Purchase
Balance as
Accounting
of June 30,
Adjustments
2009 Acquisitions
and Other
----------------------------------------------------------------------------------------------------------------------------------------------------------------(In millions)
Windows & Windows Live
Division
$
77 $0
Server and Tools
1,038
82
Online Services Division
6,657
0
Microsoft Business Division
3,927
116
Entertainment and Devices
Division
804
0
------------------------------------------------------------------------------------------- -------------------Total
$
12,503 $
198
------------------------------------------ --------------------
$0
(2)
(284)
(19)
(2)
---------------------$
(307)
----------------------
Purchase
Balance as
Accounting
Balance as
of June 30,
Adjustments
of June 30,
2010 Acquisitions
and Other
2011
--------------------------------------------------------------------------------------------------------------
77 $0
1,118
6,373
4,024
$
13
0
4
12
8
0
139
89
1,139
6,373
4,167
802
30
(19)
813
----------------------- -------------------- ---------------------- ----------------------$
12,394 $
47 $
140 $
12,581
----------------------- -------------------- ---------------------- -----------------------
Gross
Gross
Carrying
Accumulated
Net Carrying
Carrying
(In millions)
Amount
Amortization
Amount
Amount
----------------------------------------------------------------------------------------------------------------------------------------------------------------Year Ended June 30,
Contract-based
$
1,068
Technology-based (a)
2,356
Marketing-related
113
Customer-related
326
------------------------------------------------------------Total
$
3,863
----------------------
2011
$
(966)
(1,831)
(98)
(224)
----------------------$
(3,119)
-----------------------
102
525
15
102
---------------------$
744
----------------------
1,075
2,308
114
390
---------------------$
3,887
----------------------
Accumulated
Net Carrying
Amortization
Amount
---------------------------------------------------------------2010
$
(914)
(1,521)
(86)
(208)
----------------------$
(2,729)
-----------------------
161
787
28
182
---------------------$
1,158
----------------------
2011
Contract-based
$0
Technology-based
119
Marketing-related
1
Customer-related
2
-----------------------------------------------------------Total
$
122
----------------------
2010
$3
3 years
7 years
4 years
3 years
322
0
18
---------------------$
343
----------------------
2
4
5
4
Weighted
Average Life
--------------------------------
years
years
years
years
1,250
3,000
0
2,500
Thereafter
5,250
--------------------------------------------------------------Total
$
12,000
-----------------------
Stated
Effective
Interest
Interest
Interest
Due Date
Face Value
Rate
Rate
Record Date
----------------------------------------------------------------------------------------------------------------------------------------------------------------(In millions)
Notes
September 27, 2013
$
1,000
June 1, 2014
2,000
September 25, 2015
1,750
February 8, 2016
750
June 1, 2019
1,000
October 1, 2020
1,000
February 8, 2021
500
June 1, 2039
750
October 1, 2040
1,000
February 8, 2041
1,000
------------------------------------------------------------------------Total
10,750
0.88%
2.95%
1.63%
2.50%
4.20%
3.00%
4.00%
5.20%
4.50%
5.30%
1.00%
3.05%
1.80%
2.64%
4.38%
3.14%
4.08%
5.24%
4.57%
5.36%
0.00%
1.85%
Convertible Debt
June 15, 2013
1,250
Total unamortized discount
(79)
------------------------------------------------------------------------Total
$
11,921
-----------------------
March 15
May 15
March 15
February 1
May 15
March 15
February 1
May 15
March 15
February 1
Interest
Interest
Interest
Pay Date
Record Date
Pay Date
-------------------------------------------------------------------------------------
March 27
June 1
March 25
February 8
June 1
April 1
February 8
June 1
April 1
February 8
September 15
November 15
September 15
August 1
November 15
September 15
August 1
November 15
September 15
August 1
September 27
December 1
September 25
August 8
December 1
October 1
August 8
December 1
October 1
August 8
Stated
Effective
Interest
Interest
Due Date
Face Value
Rate
Rate
----------------------------------------------------------------------------------------------------------------------------------------------------------------(In millions)
Notes
June 1, 2014
$
2,000
June 1, 2019
1,000
June 1, 2039
750
---------------------------------------------------------------------------Total
3,750
2.95%
4.20%
5.20%
3.05%
4.38%
5.24%
0.00%
1.85%
Convertible Debt
June 15, 2013
1,250
Total unamortized discount
(61)
---------------------------------------------------------------------------Total
$
4,939
---- ----------------------
Interest
Interest
Interest
Interest
Record Date
Pay Date Record Date
Pay Date
--------------------------------------------------------------------------------------------------
May 15
May 15
May 15
June 1
June 1
June 1
November 15
November 15
November 15
December 1
December 1
December 1
(In millions)
-----------------------------------------------------------------------------------------------------------------------------------Year Ended June 30,
2011
2010
2009
Current Taxes
U.S. federal
$
3,108 $
4,415
U.S. state and local
209
357
International
1,602
1,701
--------------------------------------------------------------------- ---------------------Current taxes
4,919
6,473
3,159
192
1,139
---------------------4,490
Deferred Taxes
Deferred taxes
2
(220)
--------------------------------------------------------------------- ---------------------Provision for income taxes
$
4,921 $
6,253
---------------------- ----------------------
762
---------------------$
5,252
----------------------
2011
U.S.
$
8,862
International
19,209
-------------------------------------------------------------------------Income before income taxes
$
28,071
-----------------------
2010
$
9,575
15,438
----------------------$
25,013
-----------------------
2009
$
5,529
14,292
----------------------$
19,821
-----------------------
2009
2011
2010
1,329
1,696
556
289
80
----------------------$
3,950
-----------------------
(1,056)
(674)
(265)
----------------------(1,995)
----------------------$
1,955
-----------------------
Reported As
Current deferred income tax assets
$
2,467
Long-term deferred income tax liabilities
(1,456)
-----------------------------------------------------------------------------------------------Net deferred income tax assets
$
1,011
-----------------------
2,184
(229)
----------------------$
1,955
-----------------------
(In millions)
----------------------------------------------------------------------------------------------------------------------------------------------------------------Year Ended June 30,
2011
2010
$
5,403
(57)
1,012
364
(166)
(14)
---------------------$
6,542
----------------------
--------------------------------------2009
$
3,195
(82)
2,203
239
(132)
(20)
---------------------$
5,403
----------------------
(In millions)
------------------------------------------------------------------------------------------------June 30,
2011
2010
$
12,180
2,650
----------------------$
14,830
-----------------------
2011
2010
$
1,701
5,282
7,004
843
----------------------$
14,830
-----------------------
(In millions)
--------------------------------------------------------------------------------------------------------------------------------June 30,
2011
2010
(In millions)
-------------------------------------------------------------------------------------------Year Ended June 30,
2011
2010
$
342
144
(2)
(244)
---------------------$
240
----------------------
(In millions)
------------------------------------------------------------------------------------------------------------------Year Ended June 30,
2011
2010
2009
(In millions)
Shares
Amount
Shares
Amount
----------------------------------------------------------------------------------------------------------------------------------------------------------------Year Ended June 30,
First quarter
163
Second quarter
188
Third quarter
30
Fourth quarter
66
---------------------------------------------------------Total
447
--------------------
2011 (a)
$
2010 (a)
4,000
58 $
1,445
5,000
125
3,583
827
67
2,000
1,631
130
3,808
----------------------- -------------------- ----------------------$
11,458
380 $
10,836
----------------------- -------------------- -----------------------
Shares
Amount
-----------------------------------------------------------2009 (b)
223
95
0
0
-------------------318
--------------------
5,966
2,234
0
0
---------------------$
8,200
----------------------
Dividend
Declaration Date
Per Share
Record Date
Total Amount
--------------------------------------------------------------------------------------------------------------------------------------------------(In millions)
September 21, 2010
December 15, 2010
March 14, 2011
June 15, 2011
$
$
$
$
0.16
0.16
0.16
0.16
$
$
$
$
1,363
1,349
1,350
1,340
Payment Date
---------------------------------------------------
December 9, 2010
March 10, 2011
June 9, 2011
September 8, 2011
$
$
$
$
0.13
0.13
0.13
0.13
$
$
$
$
1,152
1,139
1,130
1,118
Payment Date
---------------------------------------------------
(In millions)
----------------------------------------------------------------------------------------------------------------------------------------------------------------Year Ended June 30,
2011
(632)
(627)
-
(295)
-
fects were
------------------------------------------------------------------------------2010
2009
349
(322)
---------------------$
27
----------------------
488
(223)
---------------------265
---------------------(206)
---------------------$
86
----------------------
(574)
---------------------$
302
----------------------
876
(263)
30
---------------------(233)
---------------------(240)
---------------------$
(171)
----------------------
2011
2010
$
464
767
(176)
---------------------$
1,055
----------------------
--------------------------------------2009
$
437
502
30
---------------------$
969
----------------------
(In millions)
----------------------------------------------------------------------------------------------------------------------------------------------------------------Year Ended June 30,
Stock-based compensation expense
Income tax benefits related to stock-based compensation
2011
$
$
2,166
758
-------------------------------------------------------------2010
$
$
1,891
662
---------------------------------------
2009
$
$
1,708
598
2011
$0.13 - $
1.10%
0.16
2.40%
2.10%
----------------------------------------------------------------------------------------------2010
$
0.13 $0.11 - $
-2.90%
1.40%
2009
0.13
3.60%
During fiscal year 2011, the following activity occurred under our stock plans:
Weighted
Average
Grant-Date
Shares
Fair Value
-----------------------------------------------------------------------------------------------------------------------------------(In millions)
Stock Awards
Nonvested balance, beginning of year
223
Granted
114
Vested
Forfeited
-------------------------------------------------------------------------------------------Nonvested balance, end of year
255
---- --------------------
$
$
(63) $
(19) $
$
-
24.76
22.17
25.00
23.97
$
$
(13) $
(3) $
$
-
25.32
22.56
25.63
24.05
23.59
23.76
100
23.43
91
24.95
12
24.57
10
25.93
(In millions)
----------------------------------------------------------------------------------------------------------------------------------------------------------------2011
2010
Total vest-date fair value of stock awards vested
Total vest-date fair value of shared performance stock
awards vested
1,521
1,358
289
227
---------------------------------------------------------------------------------------------------------------------------------------------Stock Options
--------------------------------------2009
$
1,137
485
Weighted
Average
Weighted
Remaining
Aggregate
Average
Contractual
Intrinsic
Shares
Exercise Price
Term
Value
----------------------------------------------------------------------------------------------------------------------------------------(In millions)
(Years)
(In millions)
Balance, July 1, 2010
187
Exercised
(79)
Canceled
(15)
--------------------------------------------------------------------Balance, June 30, 2011
93
Exercisable, June 30, 2011
92
$
$
$
24.68
24.91
28.84
$
$
23.21
23.16
1.04
1.04
$
$
312
309
$
$
$
2011
222 $
1,954 $
77 $
2010
365
1,839
126
---------------------------------------
$
$
$
2009
48
88
12
2011
20
22.98
2010
20
23.73
2009
24
20.13
2011
2010
2009
Revenue
Windows & Windows Live Division
$
18,778 $
18,792
Server and Tools
17,107
15,390
Online Services Division
2,528
2,200
Microsoft Business Division
21,986
19,345
Entertainment and Devices Division
8,716
6,224
Unallocated and other
828
533
---------------------------------------------------------------------------------------- ----------------------Consolidated
$
69,943 $
62,484
----------------------- -----------------------
15,563
14,686
2,110
19,211
6,416
451
----------------------$
58,437
-----------------------
2011
2010
2009
9,372
4,627
(1,749)
11,153
288
(3,328)
----------------------$
20,363
-----------------------
2011
2010
$
(4,260)
556
366
58
----------------------$
(3,280)
-----------------------
2009
$
(4,318)
753
256
(19)
----------------------$
(3,328)
-----------------------
2011
2010
$
36,173
26,311
----------------------$
62,484
-----------------------
2009
$
33,052
25,385
----------------------$
58,437
-----------------------
2011
2010
$
17,754
18,225
12,007
5,456
3,036
2,528
3,478
----------------------$
62,484
-----------------------
----------------------------------------2009
$
17,998
14,653
11,344
5,475
3,024
2,345
3,598
----------------------$
58,437
-----------------------
2011
United States
$
18,498
Other countries
2,989
--------------------------------------------------Total
$
21,487
-----------------------
2010
$
18,716
2,466
----------------------$
21,182
-----------------------
2009
$
19,362
2,435
----------------------$
21,797
-----------------------
September 30
December 31
March 31
June 30
12,920 (d) $
10,078
3,574
0.40
0.40
$ 16,039
12,869
4,518
0.52
0.51
-------------------------------Total
$ 69,943
54,366
23,150
2.73
2.69
--------------
$ 62,484
50,089
18,760
2.13
2.10
Exhibit
Number
Form
Period
Ending
10-Q
12/31/09
3.10
10-Q
12/31/09
3.20
3-ASR
4.10
8-K
4.20
8-K
4.10
8-K
4.20
8-K
4.50
Exhibit Description
Filed
Herewith
Exhibit
Filing Date
1/28/10
1/28/10
11/20/08
5/15/09
6/18/10
6/18/10
9/27/10
Incorporated by Reference
Exhibit
Number Exhibit Description
Filed
Herewith
Period
Form Ending
Exhibit
4.6
8-K
4.60
10.1*
8-K
99.20
10.2*
8-K
99.10
10.3*
8-K
10.30
10.4*
10-K 6/30/04
10.60
10.5*
10.6*
10-K
10.80
10.7*
10-K 6/30/04
10.90
10.8*
10-K 6/30/04
10.10
10.9*
10-K 6/30/04
10.11
10.10*
10-K 6/30/04
10.12
10.11*
10-K 6/30/04
10.13
10.12
10-K 6/30/10
10.12
10.13
10-K 6/30/10
10.13
10.14*
S-8
99.20
10.15*
10-K 6/30/07
10.17
Filing Date
2/8/11
7/20/06
7/20/06
11/15/04
9/1/04
8/25/06
9/1/04
9/1/04
9/1/04
9/1/04
9/1/04
7/30/10
7/30/10
2/28/06
8/3/07
Incorporated by Reference
Exhibit
Number
Exhibit Description
Filed
Herewith
Period
Form Ending
Exhibit
10.16*
10-Q 12/31/07
10.18
10.17*
10-Q 9/30/08
10.17
10.18*
10-Q 9/30/10
10.18
10.19*
10-Q
10.19
21 Subsidiaries of Registrant
101.INS**
101.SCH**
101.CAL**
101.DEF**
101.LAB**
101.PRE**
Filing Date
1/24/08
10/23/08
10/28/10
1/22/09
2011
Earnings (a)
Earnings from continuing operations
before income taxes
$
28,071
Add: Fixed charges
349
Add: Cash distributions from equity
method investments
14
Subtract: Income from equity method
investments
110
------------------------------------------------------------------------------------------Total Earnings
$
28,324
----------------------Fixed Charges (b)
Interest expense
$
264
Capitalized debt related expenses
31
Interest component of rent expense
54
------------------------------------------------------------------------------------------Total Fixed Charges
$
349
----------------------Ratio of Earnings to Fixed Charges
81
2010
25,013
207
2009
14
19,821
88
85
18
81
----------------------- ----------------------$
25,216 $
19,913
----------------------- -----------------------
146
5
56
----------------------$
207
-----------------------
38
0
50
----------------------$
88
-----------------------
122
226
----------------------------------------------------------------2008
23,814
151
2007
10
20,101
271
0
62
62
----------------------- ----------------------$
23,913 $
20,310
----------------------- -----------------------
106
0
45
----------------------$
151
-----------------------
230
0
41
----------------------$
271
-----------------------
158
75
Name
Where Incorporated
-------------------------------------------------------------------------------------------------------Microsoft Ireland Research
Ireland
Microsoft Capital Group, LLC
United States
Microsoft Global Finance
Ireland
Microsoft Ireland Operations Limited
Ireland
Microsoft Licensing, GP
United States
Microsoft Online, Inc.
United States
Microsoft Operations Pte Ltd
Singapore
Microsoft Operations Puerto Rico, LLC
Puerto Rico
Microsoft Regional Sales Corporation
United States
MOL Corporation
United States