Microsoft 2009 Annual Report Download - page 31

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PAGE 31
Other
Represents payments for post-delivery support and consulting services to be performed in the future, online
advertising for which the advertisement has yet to be displayed, Microsoft Dynamics business solutions products,
Xbox Live subscriptions, Mediaroom, and other offerings for which we have been paid upfront and earn the revenue
when we provide the service or software, or otherwise meet the revenue recognition criteria.
The following table outlines the expected recognition of unearned revenue as of June 30, 2009:
(In millions)
Recognition o
f
Unearned Revenue
Three months ended:
September 30, 2009 $ 4,740
December 31, 2009 4,120
March 31, 2010 2,743
June 30, 2010 1,400
Thereafter 1,281
Total $14,284
Cash Flows
Fiscal year 2009 compared with fiscal year 2008
Cash flow from operations decreased $2.6 billion due to payment of approximately $4.1 billion to the IRS in
connection with our settlement of the 2000-2003 audit examination. This impact was partially offset by the fiscal year
2008 payment of the $1.4 billion (€899 million) European Commission fine. Cash used for financing decreased $5.5
billion primarily due to $5.7 billion of net cash proceeds from issuance of short-term and long-term debt in fiscal year
2009. Financing activities also included a $3.2 billion decrease in common stock repurchased, which was offset by a
$2.9 billion decline in common stock issued. Cash used for investing increased $11.2 billion due to a $15.9 billion
rise in purchases of investments along with a $1.7 billion decrease in cash from investment sales and maturities.
These impacts were partially offset by a $7.2 billion decrease in cash paid for acquisition of companies, including the
purchase of aQuantive in fiscal year 2008.
Fiscal year 2008 compared with fiscal year 2007
Cash flow from operations increased $3.8 billion due to an increase in cash received from customers driven by 18%
revenue growth, partially offset by the $1.4 billion (€899 million) payment of the European Commission fine. Cash
used for financing decreased $11.6 billion primarily due to a $15.0 billion decrease in common stock repurchases,
partially offset by a $3.3 billion decrease in cash proceeds from the issuance of common stock. Cash used for
investing was $4.6 billion for fiscal year 2008 as compared with cash provided of $6.1 billion for fiscal year 2007.
This decrease was primarily due to a $6.9 billion increase in cash paid for acquisition of companies, reflecting the
purchase of aQuantive in the first quarter of fiscal year 2008, a $918 million increase in purchases of property and
equipment, and a $3.1 billion decrease in cash from combined investment purchases, sales, and maturities.
Stockholders’ equity at June 30, 2009, was $39.6 billion. We will continue to invest in sales, marketing, product
support infrastructure, and existing and advanced areas of technology. Additions to property and equipment will
continue, including new facilities, data centers, and computer systems for research and development, sales and
marketing, support, and administrative staff. Commitments for constructing new buildings were $621 million on
June 30, 2009. We have operating leases for most U.S. and international sales and support offices and certain
equipment under which we incurred rental expense totaling $475 million, $398 million, and $325 million, in fiscal
years 2009, 2008, and 2007, respectively. We have not engaged in any related party transactions or arrangements
with unconsolidated entities or other persons that are reasonably likely to materially affect liquidity or the availability
of capital resources.