Q1 FY07 Slides

Information about Q1 FY07 Slides

Published on June 19, 2007

Author: Mentor

Source: authorstream.com

Content

Slide1:  Microsoft Corporation:  Microsoft Corporation First Quarter October 26, 2006 Slide3:  This presentation may contain statements that are forward looking. These statements are based on current expectations and assumptions that are subject to risks and uncertainties which may cause actual results to differ materially because of factors in this presentation or discussed in today’s press release, in the management’s discussion and analysis section of the company’s 2006 Form 10-K or in other reports and filings with the Securities and Exchange Commission. We undertake no duty to update or revise any forward looking statements, whether as a results of new information, future events or otherwise. Agenda:  Agenda Quarterly Overview andamp; First Quarter Results Business Segment Financial Overview Guidance Appendix Agenda:  Agenda Quarterly Overview andamp; First Quarter Results Business Segment Financial Overview Guidance Appendix Quarterly Overview:  Quarterly Overview Solid start to the fiscal year, driven by growth in Entertainment andamp; Devices Division and Server andamp; Tools Significant progress towards product launches Continued progress in returning cash to shareholders Financial Summary – FY07 Q1:  Financial Summary – FY07 Q1 Revenue: $10.81 billion 11% growth over the comparable period last year Guidance was $10.6 – $10.8 billion Operating income: $4.47 billion Guidance was $4.0 - $4.2 billion Diluted earnings per share: $0.35 Guidance was $0.30 - $0.32 Cash returned to shareholders Regular dividend and share repurchases returned almost $8 billion to shareholders FY07 - Q1 Key Data Points:  FY07 - Q1 Key Data Points PC market growth estimate: 8% - 10% Approximate billing mix OEM: 40% Multi-year licensing agreements: 25% License only: 20% Unearned balance of $10.1 billion Contracted, not billed balance exceeds $9 billion Agenda:  Agenda Quarterly Overview andamp; First Quarter Results Business Segment Financial Overview Guidance Appendix Client Revenue:  10 Client Revenue Q1 Summary OEM license unit growth of 11%, OEM revenue growth of 4% Commercial and Retail increased 5% driven by strong growth in multi-year contract agreements Release of Windows Vista Release Candidate 4% Y/Y Growth Continued momentum in front of Windows Vista launch $3.16 $3.43 $3.30 $3.35 $3.15 Server & Tools Revenue:  11 Server andamp; Tools Revenue Broad based revenue growth driven by continued strength in SQL Server 2005 17% Y/Y Growth $2.44 $2.40 $2.13 $2.69 $2.50 Q1 Summary SQL Server revenue growth exceeds 30% Y/Y on strength of SQL Server™ 2005 Acquisitions during the quarter include: Whale, Softricity, Winternals Software, and DesktopStandard 17th consecutive quarter of double digit revenue growth Online Services Business Revenue:  12 Online Services Business Revenue 4% Y/Y Decline $0.56 $0.59 $0.56 $0.58 $0.54 Q1 Summary Advertising revenue was up 5% driven by growth in display advertising Access revenue declined 30%, as expected Released new or updated internet services including Live.com, Live Search, Live Local Search, and Live Spaces OSB ended the quarter with: 263M active Hotmail accounts 255M active Messenger accounts Live.com and MSN.com now powered by Live Search Microsoft Business Division Revenue:  13 Microsoft Business Division Revenue Strong momentum ahead of 2007 Office system and Exchange 2007 launch $3.28 $3.69 4% Y/Y Growth $3.61 $3.91 $3.43 Q1 Summary Release of 2007 Office Release Beta 2 Technical Refresh Dynamics customer billings grew 19% Y/Y Continuing to make investments in the areas of Unified Communications and Office Live Entertainment & Devices Division Revenue:  14 Entertainment andamp; Devices Division Revenue Strong performance across all businesses 70% Y/Y Growth $0.61 $1.69 $1.18 $1.28 $1.03 Q1 Summary Interactive games growth andgt; 100% 6M life to date Xbox 360 console sales Record Xbox 360 software and peripheral attach rates in the U.S. Xbox Live passes 4M member mark 6th consecutive quarter of MED growth andgt; 40% Licenses for Windows Mobile based phones tripled Y/Y Announced Zune Agenda:  Agenda Quarterly Overview andamp; First Quarter Results Business Segment Financial Overview Guidance Appendix Guidance:  Guidance Guidance $ Billions (except EPS) *as a percentage of revenue Reporting Segment Guidance:  Reporting Segment Guidance Revenue Guidance 9% - 10% FY07-Q2 financial impact of technology guarantee:  FY07-Q2 financial impact of technology guarantee Revenue Guidance FY07-Q2 * Excludes tax benefits for FY06-Q2 Summary:  Summary 19 Continued strong execution on long term shareholder return strategy Continued investments in services strategy and innovation in high growth markets Operating cash flow generation allows for execution on returning capital to shareholders and reinvestment for future growth Agenda:  Agenda Quarterly Overview andamp; First Quarter Results Business Segment Financial Overview Guidance Appendix Reconciliation Slidesand Appendix:  21 Reconciliation Slides and Appendix Slide22:  22 Reconciliation of differences between GAAP and Non-GAAP financial measures We may from time to time discuss first quarter performance using the non-GAAP financial measures presented on the following three slides.  The following tables provide a reconciliation of the differences between the non-GAAP financial measures presented and the most directly comparable financial measures calculated and presented in accordance with GAAP. The following three slides include reconciliations for: Operating income excluding legal charges Earnings per share excluding legal charges Operating expenses excluding legal Slide23:  23 Reconciliation of differences between GAAP and Non-GAAP financial measures: Operating income The non-GAAP measures provided above, which remove the legal charges from the most directly comparable GAAP measures are included as an additional clarifying item to aid readers of the financial statements in further understanding the Company's first quarter performance and the impact that certain items and events had on the financial results. The non-GAAP financial measures provided above should not be considered as a substitute for, or superior to, the measures of financial performance prepared in accordance with GAAP. Reconciliation of differences between GAAP and Non-GAAP financial measures: Earnings per share:  24 Reconciliation of differences between GAAP and Non-GAAP financial measures: Earnings per share The non-GAAP measures provided above, which remove the legal charges from the most directly comparable GAAP measures and are after tax measures, are included as an additional clarifying item to aid readers of the financial statements in further understanding the Company's first quarter performance and the impact that certain items and events had on the financial results. The non-GAAP financial measures provided above should not be considered as a substitute for, or superior to, the measures of financial performance prepared in accordance with GAAP. Reconciliation of differences between GAAP and Non-GAAP financial measures: Operating expense:  25 Reconciliation of differences between GAAP and Non-GAAP financial measures: Operating expense The non-GAAP measures provided above, which remove legal settlements from the most directly comparable GAAP measures and are after tax measures, are included as an additional clarifying item to aid readers of the financial statements in further understanding the Company's first quarter fiscal year 2006 performance and the impact that certain items and events had on the financial results. The non-GAAP financial measures provided above should not be considered as a substitute for, or superior to, the measures of financial performance prepared in accordance with GAAP. Slide26:  26 Reconciliation of Differences Between GAAP and Non-GAAP FY07 guidance The following slide includes reconciliations for: FY07 operating income guidance FY07 earnings per share guidance We may from time to time discuss fiscal year 2007 guidance using the non-GAAP financial measures presented on the following slide.  The following tables provide a reconciliation of the difference between the non-GAAP financial measures presented and the most directly comparable financial measures calculated and presented in accordance with GAAP. Reconciliation of differences between GAAP and Non-GAAP financial measures: FY07 operating income and earnings per share:  27 Reconciliation of differences between GAAP and Non-GAAP financial measures: FY07 operating income and earnings per share *Guidance may not add due to rounding. The non-GAAP measures provided above, which remove certain settlement charges, and the tax benefit from the most directly comparable GAAP measures, are included as an additional clarifying item to aid readers of the financial statements in further understanding the Company's fiscal year 2007 guidance and the impact that certain items and events had on the financial guidance. The non-GAAP financial measures provided above should not be considered as a substitute for, or superior to, the measures of financial performance prepared in accordance with GAAP. Slide28:  28 Technology Guarantee The following slides include tables reconciling the FY07-Q2 financial impact of the technology guarantee for Windows Vista and the 2007 Office release: Windows Client and Microsoft Business Division revenue guidance Microsoft revenue, operating income, and EPS guidance FY07 – Q2 Financial impact of technology guarantee: Client and Microsoft Business Division (MBD) revenue growth:  29 FY07 – Q2 Financial impact of technology guarantee: Client and Microsoft Business Division (MBD) revenue growth *Guidance may not add due to rounding. The non-GAAP measures provided above, which remove certain settlement charges, and the tax benefit from the most directly comparable GAAP measures, are included as an additional clarifying item to aid readers of the financial statements in further understanding the Company's fiscal year 2007 guidance and the impact that certain items and events had on the financial guidance. The non-GAAP financial measures provided above should not be considered as a substitute for, or superior to, the measures of financial performance prepared in accordance with GAAP. FY07 – Q2 Financial impact of technology guarantee: Total revenue, operating income, & EPS:  30 FY07 – Q2 Financial impact of technology guarantee: Total revenue, operating income, andamp; EPS *Guidance may not add due to rounding. The non-GAAP measures provided above, which remove certain settlement charges, and the tax benefit from the most directly comparable GAAP measures, are included as an additional clarifying item to aid readers of the financial statements in further understanding the Company's fiscal year 2007 guidance and the impact that certain items and events had on the financial guidance. The non-GAAP financial measures provided above should not be considered as a substitute for, or superior to, the measures of financial performance prepared in accordance with GAAP. Slide31:  31 Operating Segment History The following slide includes tables for: Unaudited 2006 pro forma results for changes to the FY07 operating segments Unaudited 2006 pro forma results for changes to the FY07 operating segments:  32 Unaudited 2006 pro forma results for changes to the FY07 operating segments Slide33:  33 Fiscal Q1 Results Fiscal Q1 Results:  Fiscal Q1 Results Slide35:  35 2006 Microsoft Corporation. All rights reserved. Microsoft, Windows, Windows Vista and other product names are or may be registered trademarks and/or trademarks in the U.S. and/or other countries. The information herein is for informational purposes only and represents the current view of Microsoft Corporation as of the date of this presentation. Because Microsoft must respond to changing market conditions, it should not be interpreted to be a commitment on the part of Microsoft, and Microsoft cannot guarantee the accuracy of any information provided after the date of this presentation. MICROSOFT MAKES NO WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, AS TO THE INFORMATION IN THIS PRESENTATION. Slide36: 

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