Microsoft 2004 Annual Report Download - page 59

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NOTES TO FINANCIAL STATEMENTS (CONTINUED)
PAGE 59
NOTE 18 SEGMENT INFORMATION
Segment revenue and operating income/(loss) is as follows: (1)
(In millions)
Y
ear Ended June 30 2002 2003 2004
Revenue
Client $ 9,350 $10,287 $11,241
Server and Tools 5,632 6,692 7,881
Information Worker 8,328 9,695 10,924
Microsoft Business Solutions 308 577 660
MSN 1,924 2,396 2,444
Mobile and Embedded Devices 124 153 239
Home and Entertainment 2,411 2,779 2,870
Reconciling amounts 288 (392) 576
Consolidated $28,365 $32,187 $36,835
Operating income/(loss)
Client $ 7,529 $ 8,362 $ 9,005
Server and Tools 1,409 1,841 2,173
Information Worker 6,440 7,495 8,067
Microsoft Business Solutions (196) (202) (180)
MSN (746) (378) 397
Mobile and Embedded Devices (240) (162) (102)
Home and Entertainment (866) (938) (894)
Reconciling amounts (5,058) (6,473) (9,432)
Consolidated $ 8,272 $ 9,545 $ 9,034
(1) Fiscal 2002 and 2003 information has been restated to reflect the retroactive adoption of the fair value recognition
provisions of SFAS 123, Accounting for Stock-Based Compensation, as discussed in Note 13. In addition, fiscal
2003 information has been restated for certain internal reorganizations and changes to certain internal accounting
methods to conform to the current period presentation. It was not practicable to restate fiscal 2002 information for
these changes, nor was it practicable to present the current year on a basis consistent with fiscal 2002.
SFAS 131, Disclosures about Segments of an Enterprise and Related Information, establishes standards for reporting
information about operating segments. This standard requires segmentation based on our internal organization and
reporting of revenue and operating income based upon internal accounting methods. Our financial reporting systems
present various data for management to run the business, including internal profit and loss statements prepared on a
basis not consistent with U.S. GAAP. The segments are designed to allocate resources internally and provide a
framework to determine management responsibility. Operating segments are defined as components of an enterprise
about which separate financial information is available that is evaluated regularly by the chief operating decision maker, or
decision making group, in deciding how to allocate resources and in assessing performance. Our chief operating decision
maker is our Chief Executive Officer. The types of products and services provided by each segment are summarized
below:
Client – Windows XP Professional and Home, Windows 2000 Professional, and other standard Windows operating
systems.
Server and Tools – Server software licenses and client access licenses (CALs) for Windows Server, SQL Server,
Exchange Server, and other servers. Also includes developer tools, training, certification, Microsoft Press, Premier
product support services, and Microsoft consulting services.
Information Worker – Microsoft Office, Microsoft Project, Microsoft Visio, SharePoint Portal Server CALs, other
information worker products including Microsoft LiveMeeting and OneNote, an allocation for Server CALs, and
professional product support services.