Microsoft 2003 Annual Report Download - page 22

Part II, Item 5,6,7
MSFT 2003 FORM 10-K
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PART II
ITEM 5. Market for Registrant’s Common Stock and Related Stockholder Matters
Our common stock is traded on The NASDAQ Stock Market under the symbol MSFT. On August 15, 2003, there were 131,580 registered holders of record of our
common stock. The high and low common stock prices per share were as follows:
Quarter Ended Sept. 30 Dec. 31
Mar. 31 June 30
Y
ear
Fiscal 2002
Common stock price per share
(1)
:
High $36.29 $34.75 $34.93 $30.19 $36.29
Low 24.86 25.90 29.00 24.31 24.31
Fiscal 2003
Common stock price per share
(1)
:
High $27.43 $29.12 $28.49 $26.37 $29.12
Low 21.42 21.89 22.80 23.67 21.42
(1) Amounts have been restated to reflect a two-for-one stock split in February 2003.
In January 2003, our Board of Directors declared our first annual common stock dividend, of $0.08 per share, which was paid in March 2003. Our dividend policy is
impacted by, among other items, our views on potential future capital requirements relating to research and development, creation and expansion of sales
distribution channels, investments and acquisitions, share dilution management, legal risks, and challenges to our business model.
In connection with Microsoft’s acquisition of Navision a/s, pursuant to a voluntary offer to acquire all Navision ordinary shares, Microsoft issued 29.1 million
shares of its common stock to Navision shareholders on July 12, 2002, in exchange for 19.4 million Navision ordinary shares, nominal value DKK 1 per share. The
price paid by Microsoft in connection with the offer was DKK 300 per each Navision share, payable at each Navision shareholder’s election in either cash or
Microsoft shares, on the basis of an exchange ratio of 1.49982 shares of Microsoft common stock for each Navision ordinary share. These issuances of Microsoft
common stock were not registered under the Securities Act of 1933 on the basis of the exemption provided by Rule 802 thereunder. Rule 802 exempts offers and
sales in an exchange offer for a class of securities of a foreign private issuer in a business combination transaction, if certain conditions are met. Since the
completion of the acquisition, we have issued 23,009 shares of our common stock to 16 employees in exchange for 10,136 ordinary shares of Navision that were
acquired upon exercise of warrants and stock options issued to employees of Navision and its subsidiaries that were outstanding at the time of the acquisition. The
issuances were not registered under the Securities Act.
ITEM 6. Selected Financial Data
Financial Highlights
(In millions, except earnings per share)
Year Ended June 30 1999 2000 2001(2) 2002(3) 2003(4)
Revenue $19,747 $22,956 $25,296 $28,365 $32,187
Operating income 10,010 11,006 11,720 11,910 13,217
Income before accounting change 7,785 9,421 7,721 7,829 9,993
Net income 7,785 9,421 7,346 7,829 9,993
Diluted earnings per share before accounting change
(1)
0.71 0.85 0.69 0.70 0.92
Diluted earnings per share
(1)
0.71 0.85 0.66 0.70 0.92
Cash dividends per share
–
–
–
–
0.08
Cash and short-term investments 17,236 23,798 31,600 38,652 49,048
Total assets 38,321 51,694 58,830 67,646 79,571
Stockholders’ equity 28,438 41,368 47,289 52,180 61,020
(1) Earnings per share have been restated to reflect a two-for-one stock split in February 2003.
(2) Fiscal year 2001 includes an unfavorable cumulative effect of accounting change of $375 million or $0.03 per diluted share, reflecting the adoption of SFAS
No. 133, and $4.80 billion (pre-tax) in impairments of certain investments, primarily cable and telecommunication investments.
(3) Fiscal year 2002 includes $4.32 billion (pre-tax) in impairments of certain investments, primarily related to our AT&T investment and further declines in the
fair values of European cable and telecommunications holdings, and a $1.25 billion (pre-tax) gain on the sale of Expedia, Inc.
(4) Fiscal year 2003 includes $1.15 billion (pre-tax) in impairments of certain investments.
ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Results of Operations for 2001, 2002, and 2003
Management’s Discussion and Analysis (MD&A) contains statements that are forward-looking. These statements are based on current expectations and
assumptions that are subject to risks and uncertainties. Actual results could differ materially because of factors discussed in “Issues and Uncertainties” and
elsewhere in this report.