Exhibit 99.1

Microsoft Cloud Strength Powers Record First Quarter Results

REDMOND, Wash. — October 24, 2018 — Microsoft Corp. today announced the following results for the quarter ended September 30, 2018, as compared to the corresponding period of last fiscal year:

 

   

Revenue was $29.1 billion and increased 19%

   

Operating income was $10.0 billion and increased 29%

   

Net income was $8.8 billion and increased 34%

   

Diluted earnings per share was $1.14 and increased 36%

“We are off to a great start in fiscal 2019, a result of our innovation and the trust customers are placing in us to power their digital transformation,” said Satya Nadella, chief executive officer of Microsoft. “We’re excited to help our customers build the digital capability they need to thrive and grow, with a business model that is fundamentally aligned to their success.”

Microsoft returned $6.1 billion to shareholders in the form of dividends and share repurchases in the first quarter of fiscal year 2019, an increase of 27% compared to the first quarter of fiscal year 2018.

“Our record results for Q1 reflect our commitment to long-term strategic investments and consistent execution to drive revenue growth and operating margin expansion,” said Amy Hood, executive vice president and chief financial officer of Microsoft. “We see continued demand for our cloud offerings, reflected in our commercial cloud revenue of $8.5 billion, up 47% year over year.”

Revenue in Productivity and Business Processes was $9.8 billion and increased 19% (up 18% in constant currency), with the following business highlights:

 

   

Office commercial products and cloud services revenue increased 17% (up 16% in constant currency) driven by Office 365 commercial revenue growth of 36% (up 35% in constant currency)

   

Office consumer products and cloud services revenue increased 16% (up 17% in constant currency) with continued growth in Office 365 consumer subscribers to 32.5 million

   

LinkedIn revenue increased 33% (up 33% in constant currency) with record levels of engagement highlighted by LinkedIn sessions growth of 34%

   

Dynamics products and cloud services revenue increased 20% (up 20% in constant currency) driven by Dynamics 365 revenue growth of 51% (up 49% in constant currency)

Revenue in Intelligent Cloud was $8.6 billion and increased 24% (up 24% in constant currency), with the following business highlights:

 

   

Server products and cloud services revenue increased 28% (up 28% in constant currency) driven by Azure revenue growth of 76% (up 76% in constant currency)

   

Enterprise Services revenue increased 6% (up 6% in constant currency)

Revenue in More Personal Computing was $10.7 billion and increased 15% (up 15% in constant currency), with the following business highlights:

 

   

Windows OEM revenue increased 3% (up 3% in constant currency) driven by OEM Pro revenue growth of 8%


   

Windows commercial products and cloud services revenue increased 12% (up 12% in constant currency) driven by an increased volume of multi-year agreements

   

Gaming revenue increased 44% (up 45% in constant currency) with Xbox software and services revenue growth of 36% (up 36% in constant currency) mainly from third-party title strength

   

Search advertising revenue excluding traffic acquisition costs increased 17% (up 17% in constant currency)

   

Surface revenue increased 14% (up 14% in constant currency)

Business Outlook

Microsoft will provide forward-looking guidance in connection with this quarterly earnings announcement on its earnings conference call and webcast.

Quarterly Highlights, Product Releases, and Enhancements

Every quarter Microsoft delivers hundreds of products, either as new releases, services, or enhancements to current products and services. These releases are a result of significant research and development investments, made over multiple years, designed to help customers be more productive and secure and to deliver differentiated value across the cloud and the edge.

Here are the major product releases and other highlights for the quarter, organized by product categories, to help illustrate how we are accelerating innovation across our businesses while expanding our market opportunities.

Webcast Details

Satya Nadella, chief executive officer, Amy Hood, executive vice president and chief financial officer, Frank Brod, chief accounting officer, Carolyn Frantz, deputy general counsel and corporate secretary, and Michael Spencer, general manager of investor relations, will host a conference call and webcast at 2:30 p.m. Pacific time (5:30 p.m. Eastern time) today to discuss details of the company’s performance for the quarter and certain forward-looking information. The session may be accessed at http://www.microsoft.com/en-us/investor. The webcast will be available for replay through the close of business on October 24, 2019.

Constant Currency

Microsoft presents constant currency information to provide a framework for assessing how our underlying businesses performed excluding the effect of foreign currency rate fluctuations. To present this information, current and comparative prior period results for entities reporting in currencies other than United States dollars are converted into United States dollars using the average exchange rates from the comparative period rather than the actual exchange rates in effect during the respective periods. All growth comparisons relate to the corresponding period in the last fiscal year. Microsoft has provided this non-GAAP financial information to aid investors in better understanding our performance. The non-GAAP financial measures presented in this release should not be considered as a substitute for, or superior to, the measures of financial performance prepared in accordance with generally accepted accounting principles (GAAP).


Financial Performance Constant Currency Reconciliation

 

     

Three Months Ended September 30,

 

 

   ($ in millions, except per share amounts)

 

  

  Revenue 

 

    

  Operating  
  Income  

 

    

  Net  

  Income  

 

    

  Diluted  
  Earnings  

  per Share  

 

 

 

  2017 As Reported

 

    

 

$24,538

 

 

 

    

 

$7,708

 

 

 

    

 

$6,576

 

 

 

    

 

$0.84

 

 

 

 

  2018 As Reported

 

    

 

$29,084

 

 

 

    

 

$9,955

 

 

 

    

 

$8,824

 

 

 

    

 

$1.14

 

 

 

 

  Percentage Change Y/Y

 

    

 

19%

 

 

 

    

 

29%

 

 

 

    

 

34%

 

 

 

    

 

36%

 

 

 

 

  Constant Currency Impact

 

    

 

$27

 

 

 

    

 

$105

 

 

 

    

 

$158

 

 

 

    

 

$0.02

 

 

 

 

  Percentage Change Y/Y Constant Currency

 

    

 

18%

 

 

 

    

 

28%

 

 

 

    

 

32%

 

 

 

    

 

33%

 

 

 

Segment Revenue Constant Currency Reconciliation

 

    

Three Months Ended September 30,

 

 

   ($ in millions)

 

  

Productivity and
Business Processes

 

    

Intelligent Cloud

 

    

More Personal
      Computing      

 

 

 

  2017 As Reported

 

  

 

 

 

 

$8,238

 

 

 

 

  

 

 

 

 

$6,922

 

 

 

 

  

 

 

 

 

$9,378

 

 

 

 

 

  2018 As Reported

 

  

 

 

 

 

$9,771

 

 

 

 

  

 

 

 

 

$8,567

 

 

 

 

  

 

 

 

 

$10,746

 

 

 

 

 

  Percentage Change Y/Y

 

  

 

 

 

 

19%

 

 

 

 

  

 

 

 

 

24%

 

 

 

 

  

 

 

 

 

15%

 

 

 

 

 

  Constant Currency Impact

 

  

 

 

 

 

$38

 

 

 

 

  

 

 

 

 

$14

 

 

 

 

  

 

 

 

 

$(25)

 

 

 

 

 

  Percentage Change Y/Y Constant Currency

 

  

 

 

 

 

18%

 

 

 

 

  

 

 

 

 

24%

 

 

 

 

  

 

 

 

 

15%

 

 

 

 

Selected Product and Service Revenue Constant Currency Reconciliation    

 

     

Three Months Ended September 30, 2018

 

 
     

Percentage Change
Y/Y (GAAP)

 

    

Constant Currency
Impact

 

    

Percentage Change
Y/Y Constant
Currency

 

 

 

  Office commercial products and cloud services

 

  

 

 

 

 

17%

 

 

 

 

  

 

 

 

 

(1)%

 

 

 

 

  

 

 

 

 

16%

 

 

 

 

 

  Office 365 commercial

 

  

 

 

 

 

36%

 

 

 

 

  

 

 

 

 

(1)%

 

 

 

 

  

 

 

 

 

35%

 

 

 

 

 

  Office consumer products and cloud services

 

  

 

 

 

 

16%

 

 

 

 

  

 

 

 

 

1%

 

 

 

 

  

 

 

 

 

17%

 

 

 

 

 

  LinkedIn

 

  

 

 

 

 

33%

 

 

 

 

  

 

 

 

 

0%

 

 

 

 

  

 

 

 

 

33%

 

 

 

 

 

  Dynamics products and cloud services

 

  

 

 

 

 

20%

 

 

 

 

  

 

 

 

 

0%

 

 

 

 

  

 

 

 

 

20%

 

 

 

 

 

  Dynamics 365

 

  

 

 

 

 

51%

 

 

 

 

  

 

 

 

 

(2)%

 

 

 

 

  

 

 

 

 

49%

 

 

 

 

 

  Server products and cloud services

 

  

 

 

 

 

28%

 

 

 

 

  

 

 

 

 

0%

 

 

 

 

  

 

 

 

 

28%

 

 

 

 

 

  Azure

 

  

 

 

 

 

76%

 

 

 

 

  

 

 

 

 

0%

 

 

 

 

  

 

 

 

 

76%

 

 

 

 

 

  Enterprise Services

 

  

 

 

 

 

6%

 

 

 

 

  

 

 

 

 

0%

 

 

 

 

  

 

 

 

 

6%

 

 

 

 

 

  Windows OEM

 

  

 

 

 

 

3%

 

 

 

 

  

 

 

 

 

0%

 

 

 

 

  

 

 

 

 

3%

 

 

 

 

 

  Windows commercial products and cloud services

 

  

 

 

 

 

12%

 

 

 

 

  

 

 

 

 

0%

 

 

 

 

  

 

 

 

 

12%

 

 

 

 

 

  Search advertising excluding traffic acquisition costs

 

  

 

 

 

 

17%

 

 

 

 

  

 

 

 

 

0%

 

 

 

 

  

 

 

 

 

17%

 

 

 

 

 

  Surface

 

  

 

 

 

 

14%

 

 

 

 

  

 

 

 

 

0%

 

 

 

 

  

 

 

 

 

14%

 

 

 

 

 

  Gaming

 

  

 

 

 

 

44%

 

 

 

 

  

 

 

 

 

1%

 

 

 

 

  

 

 

 

45%

 

 

 

  Xbox software and services

 

  

 

 

 

 

36%

 

 

 

 

  

 

 

 

 

0%

 

 

 

 

  

 

 

 

 

36%

 

 

 

 


About Microsoft

Microsoft (Nasdaq “MSFT” @microsoft) enables digital transformation for the era of an intelligent cloud and an intelligent edge. Its mission is to empower every person and every organization on the planet to achieve more.

Forward-Looking Statements

Statements in this release that are “forward-looking statements” are based on current expectations and assumptions that are subject to risks and uncertainties. Actual results could differ materially because of factors such as:

 

   

intense competition in all of our markets that may lead to lower revenue or operating margins;

 

   

increasing focus on cloud-based services presenting execution and competitive risks;

 

   

significant investments in new products and services that may not achieve expected returns;

 

   

acquisitions, joint ventures, and strategic alliances that may have an adverse effect on our business;

 

   

impairment of goodwill or amortizable intangible assets causing a significant charge to earnings;

 

   

legal changes, our evolving business model, piracy, and other factors may decrease the value of our intellectual property;

 

   

claims that Microsoft has infringed the intellectual property rights of others;

 

   

the possibility that we may fail to protect our source code;

 

   

cyberattacks and security vulnerabilities that could lead to reduced revenue, increased costs, liability claims, or harm to our reputation or competitive position;

 

   

disclosure and misuse of personal data that could cause liability and harm to our reputation;

 

   

the possibility that we may not be able to protect information stored in our products and services from use by others;

 

   

abuse of our advertising or social platforms that may harm our reputation or user engagement;

 

   

excessive outages, data losses, and disruptions of our online services if we fail to maintain an adequate operations infrastructure;

 

   

government litigation and regulatory activity relating to competition rules that may limit how we design and market our products;

 

   

potential liability under trade protection, anti-corruption, and other laws resulting from our global operations;

 

   

laws and regulations relating to the handling of personal data that may impede the adoption of our services or result in increased costs, legal claims, fines, or reputational damage;

 

   

the dependence of our business on our ability to attract and retain talented employees;


   

claims against us that may result in adverse outcomes in legal disputes;

 

   

additional tax liabilities;

 

   

quality or supply problems;

 

   

exposure to increased economic and operational uncertainties from operating a global business, including the effects of foreign currency exchange;

 

   

catastrophic events or geo-political conditions that may disrupt our business;

 

   

adverse economic or market conditions that may harm our business;

 

   

changes in our sales organization that may impact revenues;

 

   

the development of the internet of things presenting security, privacy, and execution risks;

 

   

issues about the use of artificial intelligence in our offerings that may result in competitive harm, legal liability, or reputational harm; and

 

   

damage to our reputation or our brands that may harm our business and operating results.

For more information about risks and uncertainties associated with Microsoft’s business, please refer to the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors” sections of Microsoft’s SEC filings, including, but not limited to, its annual report on Form 10-K and quarterly reports on Form 10-Q, copies of which may be obtained by contacting Microsoft’s Investor Relations department at (800) 285-7772 or at Microsoft’s Investor Relations website at http://www.microsoft.com/en-us/investor.

All information in this release is as of September 30, 2018. The company undertakes no duty to update any forward-looking statement to conform the statement to actual results or changes in the company’s expectations.

For more information, press only:

Microsoft Media Relations, WE Communications for Microsoft, (425) 638-7777, rrt@we-worldwide.com

For more information, financial analysts and investors only:

Michael Spencer, General Manager, Investor Relations, (425) 706-4400

Note to editors: For more information, news and perspectives from Microsoft, please visit the Microsoft News Center at http://www.microsoft.com/news. Web links, telephone numbers, and titles were correct at time of publication, but may since have changed. Shareholder and financial information, as well as today’s 2:30 p.m. Pacific time conference call with investors and analysts, is available at http://www.microsoft.com/en-us/investor.


MICROSOFT CORPORATION

INCOME STATEMENTS

(In millions, except per share amounts)(Unaudited)

 

     Three Months Ended
September 30,
 
         2018           2017   

 

 

 

 Revenue:

 

     

 

 Product

 

  

 

 

 

 

          $17,299 

 

 

 

 

  

 

 

 

 

          $14,298 

 

 

 

 

 

 Service and other

 

  

 

 

 

 

11,785 

 

 

 

 

  

 

 

 

 

10,240 

 

 

 

 

 

    

 

 

 

 

 Total revenue

 

  

 

 

 

 

29,084 

 

 

 

 

  

 

 

 

 

24,538 

 

 

 

 

 

    

 

 

 

 

 Cost of revenue:

 

     

 

 Product

 

  

 

 

 

 

3,649 

 

 

 

 

  

 

 

 

 

2,980 

 

 

 

 

 

 Service and other

 

  

 

 

 

 

6,256 

 

 

 

 

  

 

 

 

 

5,298 

 

 

 

 

 

    

 

 

 

 

 Total cost of revenue

 

  

 

 

 

9,905 

 

 

  

 

 

 

8,278 

 

 

 

    

 

 

 

 

 Gross margin

 

  

 

 

 

 

19,179 

 

 

 

 

  

 

 

 

 

16,260 

 

 

 

 

 

 Research and development

 

  

 

 

 

 

3,977 

 

 

 

 

  

 

 

 

 

3,574 

 

 

 

 

 

 Sales and marketing

 

  

 

 

 

 

4,098 

 

 

 

 

  

 

 

 

 

3,812 

 

 

 

 

 

 General and administrative

 

  

 

 

 

 

1,149 

 

 

 

 

  

 

 

 

 

1,166 

 

 

 

 

 

    

 

 

 

 

 Operating income

 

  

 

 

 

 

9,955 

 

 

 

 

  

 

 

 

 

7,708 

 

 

 

 

 

 Other income, net

  

 

 

 

 

266 

 

 

 

 

  

 

 

 

 

276 

 

 

 

 

 

    

 

 

 

 

 Income before income taxes

 

  

 

 

 

 

10,221 

 

 

 

 

  

 

 

 

 

7,984 

 

 

 

 

 

 Provision for income taxes

 

  

 

 

 

1,397 

 

 

  

 

 

 

1,408 

 

 

 

    

 

 

 

 

 Net income

  

 

 

 

          $8,824 

 

 

  

 

 

 

          $6,576 

 

 

  

 

 

    

 

 

 

 Earnings per share:

 

     

 

 Basic

 

  

 

 

 

 

$1.15 

 

 

 

 

  

 

 

 

 

$0.85 

 

 

 

 

 

 Diluted

 

  

 

 

 

 

$1.14 

 

 

 

 

  

 

 

 

 

$0.84 

 

 

 

 

 

 Weighted average shares outstanding:

 

     

 

 Basic

 

  

 

 

 

 

7,673 

 

 

 

 

  

 

 

 

 

7,708 

 

 

 

 

 

 Diluted

 

  

 

 

 

 

7,766 

 

 

 

 

  

 

 

 

 

7,799 

 

 

 

 

 

 Cash dividends declared per common share

 

  

 

 

 

 

          $0.46 

 

 

 

 

  

 

 

 

 

          $0.42 

 

 

 

 

 

 


MICROSOFT CORPORATION

 

COMPREHENSIVE INCOME STATEMENTS

(In millions)(Unaudited)

 

     Three Months Ended
September 30,
 
         2018           2017   

 

 

 

 Net income

  

 

 

 

        $8,824 

 

 

  

 

 

 

        $6,576 

 

 

  

 

 

    

 

 

 

 

 Other comprehensive income (loss), net of tax:

 

     

 

 Net change related to derivatives

 

  

 

 

 

 

(45) 

 

 

 

 

  

 

 

 

 

(106) 

 

 

 

 

 

 Net change related to investments

 

  

 

 

 

 

(261) 

 

 

 

 

  

 

 

 

 

(288) 

 

 

 

 

 

 Translation adjustments and other

 

  

 

 

 

 

(55) 

 

 

 

 

  

 

 

 

 

293 

 

 

 

 

 

    

 

 

 

 

 Other comprehensive loss

 

  

 

 

 

 

(361) 

 

 

 

 

  

 

 

 

 

(101) 

 

 

 

 

 

    

 

 

 

 

 Comprehensive income

  

 

 

 

$8,463 

 

 

  

 

 

 

$6,475 

 

 

  

 

 

    

 

 

 


MICROSOFT CORPORATION

 

BALANCE SHEETS

(In millions)(Unaudited)

 

    

September 30,

2018 

    

June 30,

2018 

 

 

 

 

 Assets

 

     

 

 Current assets:

 

     

 

 Cash and cash equivalents

 

  

 

 

 

 

$15,137 

 

 

 

 

  

 

 

 

 

$11,946 

 

 

 

 

 

 Short-term investments

 

  

 

 

 

 

120,743 

 

 

 

 

  

 

 

 

 

121,822 

 

 

 

 

 

    

 

 

 

 

 Total cash, cash equivalents, and short-term investments

 

  

 

 

 

 

135,880 

 

 

 

 

  

 

 

 

 

133,768 

 

 

 

 

 

 Accounts receivable, net of allowance for doubtful accounts of $319 and $377

 

  

 

 

 

 

17,390 

 

 

 

 

  

 

 

 

 

26,481 

 

 

 

 

 

 Inventories

 

  

 

 

 

 

3,614 

 

 

 

 

  

 

 

 

 

2,662 

 

 

 

 

 

 Other

 

  

 

 

 

 

7,311 

 

 

 

 

  

 

 

 

 

6,751 

 

 

 

 

 

    

 

 

 

 

 Total current assets

 

  

 

 

 

 

164,195 

 

 

 

 

  

 

 

 

 

169,662 

 

 

 

 

 

 Property and equipment, net of accumulated depreciation of $30,953 and $29,223

 

  

 

 

 

 

31,430 

 

 

 

 

  

 

 

 

 

29,460 

 

 

 

 

 

 Operating lease right-of-use assets

 

  

 

 

 

 

6,734 

 

 

 

 

  

 

 

 

 

6,686 

 

 

 

 

 

 Equity investments

 

  

 

 

 

 

2,034 

 

 

 

 

  

 

 

 

 

1,862 

 

 

 

 

 

 Goodwill

 

  

 

 

 

 

35,855 

 

 

 

 

  

 

 

 

 

35,683 

 

 

 

 

 

 Intangible assets, net

 

  

 

 

 

 

7,579 

 

 

 

 

  

 

 

 

 

8,053 

 

 

 

 

 

 Other long-term assets

 

  

 

 

 

 

9,792 

 

 

 

 

  

 

 

 

 

7,442 

 

 

 

 

 

    

 

 

 

 

 Total assets

 

  

 

 

 

 

$257,619 

 

 

 

 

  

 

 

 

 

$258,848 

 

 

 

 

  

 

 

    

 

 

 

 

 Liabilities and stockholders’ equity

 

     

 

 Current liabilities:

 

     

 

 Accounts payable

 

  

 

 

 

 

$8,511 

 

 

 

 

  

 

 

 

 

$8,617 

 

 

 

 

 

 Current portion of long-term debt

 

  

 

 

 

 

6,497 

 

 

 

 

  

 

 

 

 

3,998 

 

 

 

 

 

 Accrued compensation

 

  

 

 

 

 

4,271 

 

 

 

 

  

 

 

 

 

6,103 

 

 

 

 

 

 Short-term income taxes

 

  

 

 

 

 

2,341 

 

 

 

 

  

 

 

 

 

2,121 

 

 

 

 

 

 Short-term unearned revenue

 

  

 

 

 

 

26,704 

 

 

 

 

  

 

 

 

 

28,905 

 

 

 

 

 

 Other

 

  

 

 

 

 

7,953 

 

 

 

 

  

 

 

 

 

8,744 

 

 

 

 

 

    

 

 

 

 

 Total current liabilities

 

  

 

 

 

 

56,277 

 

 

 

 

  

 

 

 

 

58,488 

 

 

 

 

 

 Long-term debt

 

  

 

 

 

 

69,733 

 

 

 

 

  

 

 

 

 

72,242 

 

 

 

 

 

 Long-term income taxes

 

  

 

 

 

 

28,936 

 

 

 

 

  

 

 

 

 

30,265 

 

 

 

 

 

 Long-term unearned revenue

 

  

 

 

 

 

3,538 

 

 

 

 

  

 

 

 

 

3,815 

 

 

 

 

 

 Deferred income taxes

 

  

 

 

 

 

1,977 

 

 

 

 

  

 

 

 

 

541 

 

 

 

 

 

 Operating lease liabilities

 

  

 

 

 

 

5,652 

 

 

 

 

  

 

 

 

 

5,568 

 

 

 

 

 

 Other long-term liabilities

 

  

 

 

 

 

5,539 

 

 

 

 

  

 

 

 

 

5,211 

 

 

 

 

 

    

 

 

 

 

 Total liabilities

 

  

 

 

 

 

171,652 

 

 

 

 

  

 

 

 

 

176,130 

 

 

 

 

 

    

 

 

 

 

 Commitments and contingencies

 

     

 

 Stockholders’ equity:

 

     

 

 Common stock and paid-in capital — shares authorized 24,000; outstanding 7,680 and 7,677

 

  

 

 

 

 

71,303 

 

 

 

 

  

 

 

 

 

71,223 

 

 

 

 

 

 Retained earnings

 

  

 

 

 

 

17,279 

 

 

 

 

     13,682   

 

 Accumulated other comprehensive loss

 

  

 

 

 

 

(2,615) 

 

 

 

 

  

 

 

 

 

(2,187) 

 

 

 

 

 

    

 

 

 

 

 Total stockholders’ equity

 

  

 

 

 

 

85,967 

 

 

 

 

  

 

 

 

 

82,718 

 

 

 

 

 

    

 

 

 

 

 Total liabilities and stockholders’ equity

 

  

 

 

 

 

            $257,619 

 

 

 

 

  

 

 

 

 

            $258,848 

 

 

 

 

  

 

 

    

 

 

 


MICROSOFT CORPORATION

 

CASH FLOWS STATEMENTS

(In millions)(Unaudited)

 

     Three Months Ended 
September 30, 
 
     2018       2017   

 

 

 

 Operations

 

     

 

 Net income

 

  

 

 

 

 

            $8,824 

 

 

 

 

  

 

 

 

 

            $6,576 

 

 

 

 

 

 Adjustments to reconcile net income to net cash from operations:

 

     

 

 Depreciation, amortization, and other

 

  

 

 

 

 

2,837 

 

 

 

 

  

 

 

 

 

2,499 

 

 

 

 

 

 Stock-based compensation expense

 

  

 

 

 

 

 1,107 

 

 

 

 

  

 

 

 

 

973 

 

 

 

 

 

 Net recognized gains on investments and derivatives

 

  

 

 

 

 

 (240) 

 

 

 

 

  

 

 

 

 

(523) 

 

 

 

 

 

 Deferred income taxes

 

  

 

 

 

 

(247) 

 

 

 

 

  

 

 

 

 

(53) 

 

 

 

 

 

 Changes in operating assets and liabilities:

 

     

 

 Accounts receivable

 

  

 

 

 

 

9,194 

 

 

 

 

  

 

 

 

 

7,949 

 

 

 

 

 

 Inventories

 

  

 

 

 

 

 (956) 

 

 

 

 

  

 

 

 

 

(1,023) 

 

 

 

 

 

 Other current assets

 

  

 

 

 

 

(677) 

 

 

 

 

  

 

 

 

 

(318) 

 

 

 

 

 

 Other long-term assets

 

  

 

 

 

 

21 

 

 

 

 

  

 

 

 

 

(278) 

 

 

 

 

 

 Accounts payable

 

  

 

 

 

 

(395) 

 

 

 

 

  

 

 

 

 

(407) 

 

 

 

 

 

 Unearned revenue

 

  

 

 

 

 

(2,441) 

 

 

 

 

  

 

 

 

 

(1,806) 

 

 

 

 

 

 Income taxes

 

  

 

 

 

 

(1,091) 

 

 

 

 

  

 

 

 

 

661 

 

 

 

 

 

 Other current liabilities

 

  

 

 

 

 

(2,322) 

 

 

 

 

  

 

 

 

 

 

(2,164) 

 

 

 

 

 

 

 

 Other long-term liabilities

 

  

 

 

 

 

43 

 

 

 

 

    

 

354 

 

 

 

 

    

 

 

 

 

 Net cash from operations

 

  

 

 

 

 

13,657 

 

 

 

 

  

 

 

 

 

12,440 

 

 

 

 

 

    

 

 

 

 

 Financing

 

     

 

 Repayments of short-term debt, maturities of 90 days or less, net

 

  

 

 

 

 

 

 

 

 

  

 

 

 

 

(3,710) 

 

 

 

 

 

 Proceeds from issuance of debt

 

  

 

 

 

 

 

 

 

 

  

 

 

 

 

3,954 

 

 

 

 

 

 Repayments of debt

 

  

 

 

 

 

 

 

 

 

  

 

 

 

 

(1,169) 

 

 

 

 

 

 Common stock issued

 

  

 

 

 

 

360 

 

 

 

 

  

 

 

 

 

307 

 

 

 

 

 

 Common stock repurchased

 

  

 

 

 

 

(3,744) 

 

 

 

 

  

 

 

 

 

(2,570) 

 

 

 

 

 

 Common stock cash dividends paid

 

  

 

 

 

 

(3,220) 

 

 

 

 

  

 

 

 

 

(3,003) 

 

 

 

 

 

 Other, net

 

  

 

 

 

 

(780) 

 

 

 

 

  

 

 

 

 

(150) 

 

 

 

 

 

    

 

 

 

 

 Net cash used in financing

 

  

 

 

 

 

(7,384) 

 

 

 

 

  

 

 

 

 

(6,341) 

 

 

 

 

 

    

 

 

 

 

 Investing

 

     

 

 Additions to property and equipment

 

  

 

 

 

 

(3,602) 

 

 

 

 

  

 

 

 

 

(2,132) 

 

 

 

 

 

 Acquisition of companies, net of cash acquired, and purchases of intangible and other assets

 

  

 

 

 

 

(245) 

 

 

 

 

  

 

 

 

 

(179) 

 

 

 

 

 

 Purchases of investments

 

  

 

 

 

 

(19,551) 

 

 

 

 

  

 

 

 

 

(32,961) 

 

 

 

 

 

 Maturities of investments

 

  

 

 

 

 

5,214 

 

 

 

 

  

 

 

 

 

5,226 

 

 

 

 

 

 Sales of investments

 

  

 

 

 

 

15,231 

 

 

 

 

  

 

 

 

 

23,036 

 

 

 

 

 

 Securities lending payable

 

  

 

 

 

 

 

 

 

 

  

 

 

 

 

106 

 

 

 

 

 

    

 

 

 

 

 Net cash used in investing

 

  

 

 

 

 

(2,953) 

 

 

 

 

  

 

 

 

 

(6,904) 

 

 

 

 

 

    

 

 

 

 

 Effect of foreign exchange rates on cash and cash equivalents

 

  

 

 

 

 

(129) 

 

 

 

 

  

 

 

 

 

26 

 

 

 

 

 

    

 

 

 

 

 Net change in cash and cash equivalents

 

  

 

 

 

 

3,191 

 

 

 

 

  

 

 

 

 

(779) 

 

 

 

 

 

 Cash and cash equivalents, beginning of period

  

 

 

 

 

11,946 

 

 

 

 

  

 

 

 

 

7,663 

 

 

 

 

 

    

 

 

 

 

 Cash and cash equivalents, end of period

 

  

 

 

 

 

$15,137 

 

 

 

 

  

 

 

 

 

$6,884 

 

 

 

 

  

 

 

    

 

 

 


MICROSOFT CORPORATION

 

SEGMENT REVENUE AND OPERATING INCOME

(In millions)(Unaudited)

 

     Three Months Ended
September 30,
 
         2018           2017   

 

 

 

 Revenue

 

     

 

 Productivity and Business Processes

 

  

 

 

 

 

$9,771 

 

 

 

 

  

 

 

 

 

$8,238 

 

 

 

 

 

 Intelligent Cloud

 

  

 

 

 

 

8,567 

 

 

 

 

  

 

 

 

 

6,922 

 

 

 

 

 

 More Personal Computing

 

  

 

 

 

 

10,746 

 

 

 

 

  

 

 

 

 

9,378 

 

 

 

 

 

    

 

 

 

 

 Total

 

  

 

 

 

 

            $29,084 

 

 

 

 

  

 

 

 

 

$24,538 

 

 

 

 

  

 

 

    

 

 

 

 

 Operating Income

 

     

 

 Productivity and Business Processes

 

  

 

 

 

 

$3,881 

 

 

 

 

  

 

 

 

$3,006 

 

 

 

 Intelligent Cloud

 

  

 

 

 

 

2,931 

 

 

 

 

  

 

 

 

 

2,137 

 

 

 

 

 

 More Personal Computing

 

  

 

 

 

 

3,143 

 

 

 

 

  

 

 

 

 

2,565 

 

 

 

 

 

    

 

 

 

 

 Total

 

  

 

 

 

 

$9,955 

 

 

 

 

  

 

 

 

 

$7,708 

 

 

 

 

  

 

 

    

 

 

 

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