Microsoft 2009 Annual Report Download - page 78

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PAGE 78
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 23 QUARTERLY INFORMATION (Unaudited)
(In millions, except per share amounts)
Quarter Ended Sep. 30 Dec. 31 Mar. 31
June 30 Total
Fiscal year 2009
Revenue $
1
5,061 $
1
6,629 $
1
3,648 $ 13,099 (a) $ 58,437
Gross profit
1
2,213
1
2,722
1
0,834 10,513 46,282
Net income 4,373 4,174 2,977
(b) 3,045 (b) 14,569
Basic earnings per share 0.48 0.47 0.33 0.34 1.63
Diluted earnings per share 0.48 0.47 0.33 0.34 1.62
Fiscal year 2008
Revenue $
1
3,762 $
1
6,367 $
1
4,454 $ 15,837 $60,420
Gross profit
1
1,087
1
2,824
1
1,940 12,971 48,822
Net income 4,289 4,707(c) 4,388
(d)
4,297 17,681
Basic earnings per share 0.46 0.50 0.47 0.46 1.90
Diluted earnings per share 0.45 0.50 0.47 0.46 1.87
Fiscal year 2007
Revenue $
1
0,811 $
1
2,542(e) $
1
4,398
(f)
$ 13,371 $51,122
Gross profit 9,115 8,922
1
2,258 10,134 (h) 40,429
Net income 3,478 2,626 4,926
(g)
3,035 14,065
Basic earnings per share 0.35 0.27 0.51 0.32 1.44
Diluted earnings per share 0.35 0.26 0.50 0.31 1.42
(a) Reflects $276 million of revenue deferred to future periods relating to the Windows 7 Upgrade Option program.
(b) Includes employee severance of $290 million and $40 million (pre-tax) in the third and fourth quarters of the
year ended June 30, 2009, respectively.
(c) Includes charges of $237 million (pre-tax) related to various legal matters.
(d) Includes charge of $1.4 billion (€899 million) related to the fine imposed by the European Commission in
February 2008.
(e) Reflects $1.6 billion of revenue deferred to the third quarter of fiscal year 2007 for the Express Upgrade to
Windows Vista and Microsoft Office Technology guarantee programs and pre-shipments of Windows Vista and
the 2007 Microsoft Office system.
(f) Includes $1.6 billion of revenue discussed above.
(g) Includes charges of $296 million (pre-tax) related to various legal matters.
(h) Includes $1.1 billion (pre-tax) charge related to the Xbox 360 warranty policy, inventory write-downs, and
product returns.
NOTE 24 SUBSEQUENT EVENT
On July 29, 2009, Microsoft and Yahoo! announced a 10-year agreement under which Microsoft will provide the
exclusive algorithmic and paid search platform for Yahoo! Web sites. As part of the transaction, Microsoft will
compensate Yahoo! through a revenue sharing agreement on traffic generated on the Yahoo! network owned and
operated sites, and a guarantee of search revenue in certain countries. Additionally, Yahoo! will become the
exclusive worldwide relationship sales force for both companies’ premium search advertisers. Self-serve advertising
for both companies will be fulfilled by Microsoft’s adCenter platform, and prices for all search ads will continue to be
set by adCenter’s automated auction process. Microsoft will also acquire an exclusive 10-year license to Yahoo!’s
core search technology and will have the ability to integrate Yahoo! search technology into its existing Web search
platform.
The agreement does not cover either company’s Web properties and products, email, instant messaging, display
advertising, or any other aspect of the companies’ businesses, and the companies will continue to compete in those
areas. The transaction will be subject to regulatory review. The agreement entered into on July 29 anticipates that
the parties will enter into more detailed definitive agreements prior to closing the transaction. The companies are
hopeful that closing can occur in early calendar year 2010.