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Word (159kb)
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XBRL v2.0 (50kb)
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Microsoft First Quarter FY 2002 Earnings Release
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Microsoft Announces Strong Quarterly Revenue
Windows 2000, .NET Enterprise Servers Shine Again
Redmond, Wash. – Oct. 18, 2001 – Microsoft Corp. today announced revenue of $6.13 billion for the quarter ended Sept. 30, 2001, a 6 percent increase over the $5.77 billion reported in the prior year. Operating income totaled $2.90 billion compared to $2.78 billion in the prior year. Net income for the quarter was $1.28 billion including a $1.24 billion after-tax charge related to the impairment of certain publicly traded and private equity securities, predominantly in the cable and telecommunications industries. This charge is reflected in the $980 million investment loss reported this quarter. Diluted earnings per share for the September 2001 quarter were $0.23, including a $0.20 charge for net recognized investment losses which includes the impairment charge noted above.
"We reported solid revenue and operating results this quarter, fueled by strong customer demand for our Windows® 2000 and .NET Enterprise Server families, and our cost-control efforts," said John Connors, chief financial officer at Microsoft. "While we are looking forward to the upcoming launches of Windows XP, XboxTM and MSN® 7, we also recognize that this is a period of unprecedented global uncertainty that could have an impact on the economy and our business."
The Windows 2000 Server family had a stellar quarter, with sales growth of over 20 percent. "We were especially thrilled to see strong customer demand for Windows 2000 Advanced Server, which sold twice as many units as it did the previous year. These products are a rock-solid foundation for the entire .NET Enterprise Server lineup," said Brian Valentine, senior vice president for the Windows division at Microsoft. "These results demonstrate our customers' enthusiasm for the quality, value and performance offered in our enterprise-ready products and solutions."
The .NET Enterprise Server family of products also turned in an outstanding quarter with growth exceeding 30 percent, led by the continuing strength of SQL Server 2000 and Exchange 2000 Server. During the quarter, SQL Server 2000 was named Best Overall Database in this year's VARBusiness Annual Report Card and was deployed by customers such as Pennzoil, Nestlé and Marathon Oil. Exchange Server is the market-leading messaging and collaboration product and boasts over 94 million users. During the quarter, Microsoft also launched Content Management Server 2001, which enables companies to quickly and efficiently build, deploy and maintain highly dynamic Internet, intranet and extranet web sites.
Microsoft is set to deliver two highly anticipated products to customers during the coming quarter. On Oct. 25, Microsoft will launch Windows XP at events to be held in New York City and more than 60 other cities. Windows XP extends the personal computing experience by uniting PCs, devices and services, and brings the solid foundation of Windows 2000 to home PC users, enhancing reliability, security and performance.
On Nov. 15, Microsoft will launch Xbox, the future-generation video game system. The combination of Xbox's superior graphics performance and an extensive lineup of game titles from Microsoft and leading game-developers, such as Sega, Electronic Arts, THQ, Tecmo, Infogames, Activision, Konami and LucasArts, will deliver a revolutionary experience to gamers this holiday season.
Management offers the following guidance for the quarter ending Dec. 31, 2001:Revenue is expected to be in the range of $7.1 billion and $7.3 billion. Operating income is expected to be in the range of $2.9 and $3.0 billion. Diluted earnings per share is expected to be $0.49 or $0.50.
Management offers the following guidance for the full fiscal year ending June 30, 2002:Revenue is expected to be in the range of $28.4 billion and $29.1 billion. Operating income is expected to be in the range of $12.0 and $12.4 billion. Diluted earnings per share is expected to be in the range of $1.61 to $1.66.
Microsoft will hold an audio webcast at 2:30 pm PDT (5:30 p.m. EDT) today with John Connors to discuss details regarding the company's performance for the quarter and other forward-looking information. The session may be accessed at http://www.microsoft.com/msft The webcast will be available for replay through the close of business on Friday, Oct. 26, 2001.
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Forward-Looking Statements
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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: entry into markets with vigorous competition, market acceptance of new products and services, adoption of new licensing programs, continued acceptance of existing products and services, delays in product development and related product release schedules, reliance on sole source suppliers, or shortages of key components for hardware products that delay product delivery, any of which may cause revenues and income to fall short of anticipated levels; the risk of obsolete inventory or product returns by distributors, resellers and retailers; the risk of warranty and other claims on hardware products; higher relative marketing expenses associated with new product releases; changes in the rate of PC shipments; technological shifts; customer demand for our product and services; the support of third party software developers for new or existing platforms; competitive products, services and pricing; changes in product and service mix; product life cycles; sale terms and conditions; the company's ability to efficiently integrate acquired businesses; implementation of cost structures that align with revenue growth; the financial condition of vendors, resellers and retailers; unavailability of insurance; or uninsured losses (including the effects of the terrorist attacks on the United States on Sept. 11, 2001); adverse results in litigation; the effects of terrorist activity and armed conflict such as disruptions in general economic activity and changes in our operations and security arrangements; general economic conditions that affect demand for computer hardware or software; currency fluctuations; and financial market volatility affecting the value of our investments that may result in a reduction in carrying value and recognition of losses.
For further information regarding risks and uncertainties associated with Microsoft's business, please refer to the "Management's Discussion and Analysis of Results of Operations and Financial Condition" 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 1-800-285-7772 or Microsoft's investor relations website at http://www.microsoft.com/msft
All information in this release is as of Oct. 18, 2001. 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.
Founded in 1975, Microsoft (Nasdaq "MSFT") is the worldwide leader in software, services and Internet technologies for personal and business computing. The company offers a wide range of products and services designed to empower people through great software – any time, any place and on any device.
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Microsoft, Windows, Xbox and MSN are either registered trademarks or trademarks of Microsoft Corp. in the United States and/or other countries.The names of actual companies and products mentioned herein may be the trademarks of their respective owners.
For more information, financial analysts only:
Krish Srinivasan, senior director, Investor Relations (425) 706-3703
For more information, press only:
Caroline Boren, Waggener Edstrom, (425) 638-7000, carolineb@wagged.com
Katy Fonner, Waggener Edstrom, (503) 443-7000, kfonner@wagged.com
Note to editors: If you are interested in viewing additional information on Microsoft, please visit the Microsoft Web page at http://www.microsoft.com/presspass/ on Microsoft’s corporate information pages. Shareholder and financial information as well as today’s 2:30 p.m. PDT conference call with investors and analysts is available at http://www.microsoft.com/msft.
Item 1. Financial Statements
MICROSOFT CORPORATION
INCOME STATEMENTS
(In millions, except earnings per share)
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Three Months Ended
September 30 |
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2000 *
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2001 |
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| Revenue |
$5,766 |
$6,126 |
| Operating expenses: |
| Cost of revenue |
825 |
884 |
| Research and development |
956 |
1,013 |
| Sales and marketing |
1,038 |
1,145 |
| General and administrative |
170 |
187 |
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| Total operating expenses |
2,989 |
3,229 |
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| Operating income |
2,777 |
2,897 |
| Losses on equity investees and other |
(52) |
(30) |
| Investment income/(loss) |
1,127 |
(980) |
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| Income before income taxes |
3,852 |
1,887 |
| Provision for income taxes |
1,271 |
604 |
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| Income before accounting change |
2,581 |
1,283 |
| Cumulative effect of accounting change |
(375) |
- |
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| Net income |
2,206 |
1,283 |
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Earnings per share: |
| Basic before accounting change |
$0.49 |
$0.24 |
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| Diluted before accounting change |
$0.46 |
$0.23 |
Earnings per share: |
| Basic |
$0.42 |
$0.24 |
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| Diluted |
$0.40 |
$0.23 |
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Weighted average shares outstanding: |
| Basic |
5,299 |
5,398 |
| Diluted |
5,557 |
5,567 |
* For the quarter ended September 30, 2000, revenue and cost of revenue have been reclassified to report Expedia merchant revenue on a net basis, which represents the amount charged to the customer less the ammount paid to the supplier.
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MICROSOFT CORPORATION
BALANCE SHEETS
(In millions)
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June 30
2001 |
September 30
2001 |
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Assets
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| Current assets: |
| Cash and equivalents |
$3,922 |
$3,113 |
| Short-term investments |
27,678 |
33,050 |
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| Cash and short-term investments |
31,600 |
36,163 |
| Accounts receivable, net |
3,671 |
3,615 |
| Deferred income taxes |
1,949 |
1,993 |
| Other |
2,417 |
2,561 |
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| Total current assets |
39,637 |
44,332 |
| Property and equipment, net |
2,309 |
2,261 |
| Equity investments |
14,361 |
12,035 |
| Intangible assets, net |
401 |
394 |
| Other assets |
1,038 |
834 |
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| Total assets |
$59,257 |
$61,367 |
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Liabilities and stockholders' equity
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| Current liabilities: |
| Accounts payable |
$1,188 |
$1,143 |
| Accrued compensation |
742 |
586 |
| Income taxes payable |
1,468 |
2,131 |
| Unearned revenue |
5,614 |
5,849 |
| Other |
2,120 |
3,153 |
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| Total current liabilities |
11,132 |
12,862 |
| Deferred income taxes |
836 |
- |
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| Stockholders' equity: |
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| Common stock and paid-in capital |
28,390 |
29,296 |
| Retained earnings |
18,899 |
19,209 |
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| Total stockholders' equity |
47,289 |
48,505 |
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| Total liabilities and stockholders' equity |
$59,257 |
$61,367 |
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MICROSOFT CORPORATION
Channel and Business Division Revenue
(In millions)
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Three Months
Ended September 30 |
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2000 |
2001 |
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Channels
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| South Pacific and Americas Region |
$2,154 |
$2,433 |
| Europe, Middle East, and Africa Region |
1,085 |
1,105 |
| Asia Region |
708 |
604 |
| OEM |
1,819 |
1,984 |
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| Total revenue |
$5,766 |
$6,126 |
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Business Divisions
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| Desktop Applications |
$2,139 |
$2,192 |
| Desktop Platforms |
1,883 |
2,017 |
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| Desktop Software |
4,022 |
4,209 |
| Enterprise Software and Services |
1,037 |
1,193 |
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| Desktop and Enterprise Software and Services |
5,059 |
5,402 |
| Consumer Software, Services, and Devices |
479 |
501 |
| Consumer Commerce Investments |
63 |
94 |
| Other |
165 |
129 |
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| Total revenue |
$5,766 |
$6,126 |
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First Quarter of Fiscal Year 2002
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(All growth percentages are comparisonsto the comparable period of fiscal year 2001)
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Revenue for the first quarter of fiscal year 2002 was $6.13 billion, an increase of 6% over the first quarter of fiscal 2001. The revenue growth was driven primarily by licensing Microsoft® Windows® 2000 Professional and Server, Microsoft SQL Server™, and the other .NET Enterprise Servers.
Product Revenue
Microsoft has four segments: Desktop and Enterprise Software and Services; Consumer Software, Services, and Devices; Consumer Commerce Investments; and Other.
Desktop and Enterprise Software and Services includes Desktop Applications; Desktop Platforms; and Enterprise Software and Services. Desktop and Enterprise Software and Services revenue was $5.40 billion for the first quarter, an increase of 7% from $5.06 billion recorded in the first quarter of the prior year. Desktop Applications includes revenue from Microsoft Office; Microsoft Project; Visio®; client access licenses (CALs) for Windows NT® Server and Windows 2000 Server, Exchange, and BackOffice®; Microsoft Great Plains®; and bCentral™. Revenue from Desktop Applications was $2.19 billion in the September quarter of fiscal 2002, a 2% growth from $2.14 billion in the prior year. Office revenue reflected increased enterprise licensing of the Office XP suite, offset by declining consumer purchases, particularly in the Asia region. Revenue grew strongly in the first quarter of fiscal 2002 from client access licenses related to strong licensing growth of Exchange, BackOffice, and Windows NT Server and Windows 2000 Server CALs. Microsoft Great Plains revenue also contributed to the growth.
Desktop Platforms includes revenue from Windows 2000 Professional, Windows NT Workstation, Windows Millennium Edition (Windows Me), Windows 98, and other desktop operating systems. Desktop Platforms revenue was $2.02 billion in the first quarter, representing 7% growth from the first quarter of the prior year. Although hampered by the weakness in PC shipments, revenue from an increased mix of Windows 2000 Professional and earned revenue from enterprise licensing contributed to the growth from the prior year’s September quarter. Revenue from Windows 98 and Windows Me declined from the first quarter of fiscal 2001. Windows XP Home and Professional Editions were released to manufacturing during the quarter and some OEMs began offering this new version in late September.
Enterprise Software and Services includes Server Platforms; Server Applications; developer tools and services; and Enterprise services. September quarter revenue was $1.19 billion, increasing 15% from $1.04 billion in the September quarter of fiscal 2001. Server Platforms revenue growth was greater than 20% resulting from continued adoption of Windows 2000 Server and an increased mix of Windows 2000 Advanced Server. SQL Server, Exchange Server, and other .NET Enterprise Servers revenue rose sharply from the prior year’s first quarter as a result of strong licensing. Enterprise services revenue, representing consulting and product support services, was up 27% compared to the prior year’s comparable quarter. Revenue from developer tools, training and certification, and other services declined from the September quarter of fiscal 2001 with the release of the new version of the developer tools suite approaching.
Consumer Software, Services, and Devices includes MSN® Internet access, MSN network services, PC and online games, Xbox™, learning and productivity software, mobility and embedded systems. Consumer Software, Services, and Devices revenue reached $501 million in the first quarter of fiscal 2002, up 5% from the first quarter of the prior year. MSN Internet access revenue grew solidly as a result of an increased subscriber base, partially offset by a decline in the average revenue per subscriber due to a larger mix of subscribers contracted under rebate programs. Revenue from MSN network services continues to face difficult economic conditions impacting the online advertising marketplace resulting in a slower pace of revenue growth than achieved in recent quarters. Learning and productivity software revenue and PC and online games revenue declined from the September quarter of fiscal 2001, due to the timing of new product releases and the softness in the overall consumer market.
Consumer Commerce Investments include Expedia, Inc., the HomeAdvisor™ online real estate service, and the Carpoint® online automotive service. First quarter revenue totaled $94 million, compared to $63 million in the prior year’s first quarter. Prior year’s first quarter revenue for Expedia, Inc. has been reclassified to reflect the reporting change of merchant revenue to a net basis, which represents the amount charged to the customer less the amount paid to the supplier.
Other primarily includes Hardware and Microsoft Press. Other revenue was $129 million in the first quarter of fiscal 2002, declining from $165 million reported in the prior year’s September quarter. Lower sales of Microsoft Press® books due to the timing of new book releases and lower revenue from hardware peripherals as a result of weaknesses in the consumer market contributed to the decline in revenue from the September quarter of fiscal 2001.
Distribution Channels
Microsoft distributes its products primarily through OEM licenses, organizational licenses, online services and products, and retail packaged product. OEM channel revenue represents license fees from original equipment manufacturers who pre-install Microsoft products, primarily on PCs. Microsoft has three major geographic sales and marketing organizations: the South Pacific and Americas Region; the Europe, Middle East, and Africa Region; and the Asia Region. Sales of organizational licenses and packaged products via these channels are primarily to and through distributors and resellers
OEM first quarter revenue was $1.98 billion, up 9% from revenue of $1.82 billion in the comparable quarter of fiscal 2001. Although total licenses reported declined from the prior year’s first quarter, revenue growth was positively impacted by the increased mix of the higher priced Windows 2000 Professional and Windows NT Workstation licenses, a higher average revenue per license, and the recognition of unearned revenue, which had been deferred in prior periods when PC growth rates were higher. Additionally, OEM revenue reflected strength in the system builder channel.
South Pacific and Americas Region revenue revenue in the September quarter was $2.43 billion, up 13% compared to $2.15 billion in the prior year. Revenue from the United States was the primary driver of the region’s revenue growth, as a result of strong enterprise licensing of the Company’s server and .NET Enterprise Servers in a weak economy due to the strong value-based offerings. Other product offerings influencing the growth included Windows NT Workstation and Windows 2000 Professional, enterprise consulting and support services, and MSN access. Office integrated suites revenue showed a healthy increase from the prior year’s comparable quarter as a result of licensing of Office XP. Revenue from Microsoft Great Plains also contributed to the growth.
Europe, Middle East, and Africa Region revenue was $1.11 billion, increasing 2% compared to $1.09 billion in the first quarter of the prior year. The results were largely affected by the weakening of local currencies, which negatively impacted translated revenue compared to the prior year. Revenue in the region would have increased 8% compared to the first quarter of fiscal 2001 if foreign exchange rates were constant with those of the prior year. However, revenue from Windows 2000 Professional and Server and the .NET Enterprise Server family of products was very healthy.
Asia Region revenue decreased 15% to $604 million from $708 million in the September quarter of the prior year. The region’s revenue growth rate was influenced by a sharp decline in consumer PC shipments, which affected the sales of localized versions of Microsoft Office XP. However, the region reported strong enterprise licensing revenue growth, particularly in Server Platforms and .NET Enterprise Servers. Additionally, revenue in the region would have been 9% higher than the reported revenue if foreign exchange rates were constant with those of the prior year.
Translated international revenue is affected by foreign exchange rates. The net impact of foreign exchange rates on revenue was negative in the September quarter compared to a year ago, due to weaker European and Japanese currencies versus the U.S. dollar. Had the rates from the prior year’s comparable quarter been in effect in the first quarter of fiscal 2002, translated international revenue billed in local currencies would have been approximately $140 million higher. Certain manufacturing, selling, distribution, and support costs are disbursed in local currencies, and a portion of international revenue is hedged, thus offsetting a portion of the translation exposure.
In June 2001, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards (SFAS) 141, Business Combinations , and SFAS 142, Goodwill and Other Intangible Assets. SFAS 141 requires business combinations initiated after June 30, 2001 to be accounted for using the purchase method of accounting. It also specifies the types of acquired intangible assets that are required to be recognized and reported separately from goodwill. SFAS 142 will require that goodwill and certain intangibles no longer be amortized, but instead tested for impairment at least annually. SFAS 142 is required to be applied starting with fiscal years beginning after December 15, 2001, with early application permitted in certain circumstances. The Company adopted SFAS 142 in the first quarter of fiscal 2002. Goodwill amortization was approximately $65 million in the first quarter of fiscal 2001.
Cost of revenue was $884 million or 14.4% as a percent of revenue in the first quarter, compared to $825 million or 14.3% as a percent of revenue in the first quarter of the prior year. Higher support and service costs associated with the MSN Internet access, MSN network services, and Enterprise services were partially offset by lower relative costs related to a decline in hardware and packaged consumer software products revenue and a higher mix of organizational licensing revenue versus the prior year’s comparable quarter.
Research and development expenses in the first quarter increased 6% from the first quarter of the prior year to $1.01 billion. R&D expenses increased primarily due to higher headcount-related costs and development costs associated with upcoming product releases, including Windows XP and Xbox, partially offset by the discontinuation of goodwill amortization in accordance with SFAS 142 in fiscal 2002.
Sales and marketing expenses were $1.15 billion in the September quarter, or 18.7% of revenue, compared to $1.04 billion in the first quarter of the prior year, or 18.0% of revenue. Sales and marketing expenses as a percent of revenue increased due to higher relative headcount related costs associated with new sales initiatives, partially offset by lower relative marketing costs.
General and administrative costs were $187 million in the first quarter compared to $170 million in the comparable quarter of the prior year. General and administrative costs increased from the first quarter of fiscal 2001, due to higher headcount-related costs.
| Non-operating Items, Investment Income, and Income Taxes |
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Losses on equity investees and other incorporates Microsoft’s share of income or loss from MSNBC, Avanade, and other investments accounted for using the equity method. Losses on equity investees and other decreased to $30 million in the first quarter of fiscal 2002, compared to $52 million in the comparable quarter of fiscal 2001, primarily reflecting a decrease in the number of such investments compared to the first quarter of fiscal 2001 in addition to the elimination of amortization of goodwill in accordance with SFAS 142 in fiscal 2002
In the first quarter, the Company reported $980 million in investment loss. The loss for the quarter included $612 million of bond portfolio return and dividend income, offset by $1.59 billion in net recognized losses. Net recognized losses included a write down for other-than-temporary impairments of $1.82 billion, primarily as a result of further declines in the fair values of European cable and telecommunications holdings, net realized gains on equity securities of $391 million, and $157 million in net losses attributable to derivative instruments in accordance with SFAS 133, Accounting for Derivative Instruments and Hedging Activities. In the first quarter of fiscal 2001, Microsoft adopted SFAS 133, which establishes accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in other contracts and for hedging activities. In the prior year comparable quarter, the Company reported $1.13 billion in investment income, which included $499 million of bond portfolio income and dividends and $628 million of net recognized gains.
The effective tax rate for fiscal 2002 is 32%. The effective tax rate for fiscal 2001 was 33%.
A portion of Microsoft's revenue is earned ratably over the product life cycle or, in the case of subscriptions, over the period of the license agreement.
End users receive certain elements of the Company's products over a period of time. These elements include items such as browser technologies and technical support. Consequently, Microsoft’s earned revenue reflects the recognition of the fair value of these elements over the product's life cycle. The percentage of revenue recognized ratably ranges from approximately 15% to 25% of Windows desktop operating systems and approximately 10% to 20% of desktop applications, depending on the terms and conditions of the license and prices of the elements. Product life cycles are currently estimated at three years for Windows operating systems and 18 months for desktop applications. The Company also sells subscriptions to certain products via maintenance and certain organization license agreements.
At September 30, 2001, unearned revenue was $5.85 billion, compared to $4.77 billion at September 30, 2000. Desktop Applications unearned revenue was $2.39 billion, compared to $1.68 billion at September 30, 2000. Desktop Platforms unearned revenue was $2.66 billion, compared to $2.36 billion at September 30, 2000. Enterprise Software and Services unearned revenue was $470 million, compared to $400 million at September 30, 2000. Unearned revenue associated with Consumer Software, Services, and Devices and Other was $325 million, compared to $328 million a year ago.
| Balance Sheet and Cash Flow |
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Cash and short-term investments totaled $36.16 billion as of September 30, 2001. The growth in the cash balance during the quarter included net purchases of approximately $1.2 billion in short-term investments near September 30th as part of our normal management of the investment portfolio, which were settled after the balance sheet date. The Company is required to recognize the investments on the trade date rather than the settlement date, accordingly there was a corresponding increase in other current liabilities. Equity and other investments at September 30, 2001 were $12.04 billion, declining from $14.36 billion as of June 30, 2001. The sequential quarter decrease in equity and other investments was mainly due to declines in fair values.
Cash flow from operations was $3.39 billion in the September quarter of fiscal 2002, compared to $2.96 billion in the September quarter of fiscal 2001. The increase was primarily attributable to the growth in operating income and other changes in working capital in the September quarter of fiscal 2002.
During the first quarter of fiscal 2002, the Company repurchased 21.6 million shares of common stock for $1.1 billion under its stock repurchase program, compared to 25.5 million shares in the first quarter of fiscal 2001.
| Employee Stock Options (ESOs) |
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The Company encourages broad-based employee ownership of Microsoft stock through an ESO program in which the majority of employees are eligible to participate. At September 30, 2001, 881 million vested and unvested options were outstanding, compared to 5.386 billion common shares outstanding.
Microsoft follows Accounting Principles Board Opinion (APB) 25, Accounting for Stock Issued to Employees, to account for ESOs, which generally does not require income statement recognition of options granted at the market price on the date of issuance. FICA and Medicare payroll taxes associated with stock option exercises are recorded as an expense. Other events such as the accelerated vesting of options can also trigger recording an expense. These costs were reflected in each operating expense line item in the income statement.
Earnings per share calculations reflect exercised ESOs and the dilutive effect of outstanding ESOs under the treasury stock method. In addition, as required by SFAS 123, Accounting for Stock-Based Compensation, the Company discloses the value of ESO grants using the Black-Scholes option valuation method and the pro forma impact of expensing such value over the vesting period of the ESOs in the notes to its annual financial statements.
ESOs are often granted upon hire to new employees, annually to the majority of employees, and non-annually to certain other employees. In the following table, Microsoft has electively disclosed the pro forma income statements for the three and twelve months ended September 30, 2001 in accordance with SFAS 123
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Alternative Presentation of Accounting for ESOs under SFAS 123
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(In millions, except earnings per share)(Unaudited)
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Three Months Ended
September 30, 2001
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Twelve Months Ended
September 30, 2001
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Reported
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Pro forma(1)
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Reported
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Pro forma(1)
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Revenue
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$6,126
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$6,126
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$25,656
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$25,656
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Operating expenses:
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884
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984
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3,514
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3,824
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|
|
1,013
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1,422
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4,436
|
6,138
|
|
|
1,145
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1,477
|
4,992
|
6,187
|
| | General and administrative |
|
187
|
292
|
874
|
1,218
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|
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Total operating expenses
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3,229
|
4,175
|
13,816
|
17,367
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|
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Operating income
|
2,897
|
1,951
|
11,840
|
8,289
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Losses on equity investees and other
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(30)
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(30)
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(137)
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(137)
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Investment loss
|
(980)
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(980)
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(2,143)
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(2,143)
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Income before income taxes
|
1,887
|
941
|
9,560
|
6,009
|
|
Provision for income taxes
|
604
|
301
|
3,136
|
1,973
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|
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Net income
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$ 1,283
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$ 640
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$ 6,424
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$ 4,036
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Diluted EPS
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$0.23
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$0.11
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$1.15
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$0.72
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Weighted average shares outstanding
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5,567
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5,567
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5,574
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5,574
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Options granted
|
20
|
20
|
176
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176
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(1) Pro forma information as if the Company applied SFAS 123 for ESOs granted after July 1, 1995.
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Microsoft, Windows, Visio, Windows NT, BackOffice, bCentral, MSN, HomeAdvisor, Carpoint and Microsoft Press are either registered trademarks or trademarks of Microsoft Corporation in the United States and/or other countries. The names of actual companies and products mentioned herein may be the trademarks of their respective owners.
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