Microsoft 2008 Annual Report Download - page 65

Download and view the complete annual report

Please find page 65 of the 2008 Microsoft annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 73

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73

PAGE 64
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(In millions)
Y
ear Ended June 30, 2008
2007 2006
Operating Income (Loss):
Client $
1
2,537
$
1
1,338 $
1
0,176
Server and Tools 4,261
3,593 2,980
Online Services Business (1,309) (630) 194
Microsoft Business Division
1
2,182
1
0,696 9,567
Entertainment and Devices Division 267
(2,016) (1,329)
Reconciling amounts (5,446) (4,457) (5,116)
Consolidated $
2
2,492
$
1
8,524 $
1
6,472
SFAS No. 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 operate 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. Amounts for prior periods
have been recast to conform to the current management view. 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. Our five segments are Client;
Server and Tools; Online Services Business; Microsoft Business Division; and Entertainment and Devices
Division.
The types of products and services provided by each segment are summarized below:
Client – Windows Vista, including Home, Home Premium, Ultimate, Business, Enterprise and Starter Edition;
Windows XP Professional and Home; Media Center Edition; Tablet PC Edition; and other standard Windows
operating systems.
Server and Tools – Windows Server operating system; Microsoft SQL Server; Microsoft Enterprise Services;
product support services; Visual Studio; System Center products; Forefront security products; Biz Talk Server;
MSDN; and other products and services.
Online Services Business – Live Search; MSN; MapPoint; MSN Internet Access; MSN Premium Web Services
(consisting of MSN Internet Software Subscription, MSN Hotmail Plus, and MSN Software Services); Windows
Live; MSN Mobile Services; AvenueA Razorfish media agency services; Atlas online tools for advertisers; and the
Drive PM ad network for publishers.
Microsoft Business Division – Microsoft Office; Microsoft Project; Microsoft Visio; Microsoft Office SharePoint
Server; Microsoft PerformancePoint; Microsoft Office Live; FAST ESP; Microsoft Exchange Server; Microsoft
Exchange Hosted Services; Microsoft Office Live Meeting; Microsoft Office Communication Server; Microsoft
Office Communicator; Microsoft Tellme Service, Microsoft Dynamics AX; Microsoft Dynamics CRM; Microsoft
Dynamics CRM Online; Microsoft Dynamics GP; Microsoft Dynamics NAV; Microsoft Dynamics SL; Microsoft
Dynamics Retail Management System; Microsoft Partner Program; and Microsoft Office Accounting.
Entertainment and Devices Division – Xbox 360 console and games; Xbox Live; Zune; Mediaroom; numerous
consumer software and hardware products (such as mice and keyboards); Windows Mobile software and services
platform; Windows Embedded device operating system; Windows Automotive; and Surface computing platform.
Because of our integrated business structure, operating costs included in one segment may benefit other
segments, and therefore these segments are not designed to measure operating income or loss directly related to
the products included in each segment. Inter-segment cost commissions are estimated by management and used
to compensate or charge each segment for such shared costs and to incent shared efforts. Management will
continually