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Notes to Financial Statements continued (in millions)
Segment Information
Year Ended June 30 |
Windows
Platforms |
|
Productivity
Applications
and Developer |
|
Consumer
and Other |
|
Reconciling
Amounts |
|
Consolidated |
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1998 |
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|
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|
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|
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|
|
|
|
Revenue |
$ 6,236 |
|
$ 7,458 |
|
$ 1,765 |
|
$ (197 |
) |
$ 15,262 |
|
|
|
|
|
|
|
|
|
|
|
|
Operating income |
3,661 |
|
4,824 |
|
(1,050 |
) |
(1,021 |
) |
6,414 |
|
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1999 |
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Revenue |
$ 8,570 |
|
$ 8,636 |
|
$ 1,854 |
|
$ 687 |
|
$ 19,747 |
|
|
|
|
|
|
|
|
|
|
|
|
Operating income |
5,476 |
|
4,950 |
|
(1,241 |
) |
743 |
|
9,928 |
|
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2000 |
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Revenue |
$ 9,265 |
|
$ 10,089 |
|
$ 2,718 |
|
$ 884 |
|
$ 22,956 |
|
|
|
|
|
|
|
|
|
|
|
|
Operating income |
5,813 |
|
4,935 |
|
(1,455 |
) |
1,644 |
|
10,937 |
|
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The Company's organizational structure and fundamental approach to business reflect the needs of its customers. As such, Microsoft has three major segments: Windows Platforms; Productivity Applications and Developer; and Consumer and Other. Windows Platforms includes the Windows Division, which is primarily responsible for developing and marketing Windows NT Workstation, Windows 2000 Professional, Windows 98, Windows 95, Windows NT Server, and Windows 2000 Server. Productivity Applications and Developer includes the Business Productivity Division, which is responsible for developing and marketing desktop applications, server applications, and developer tools. Consumer and Other products and services include primarily learning, entertainment, and PC input device products; WebTV and PC online access; and portal and vertical properties. Assets of the segment groups are not relevant for management of the businesses nor for disclosure.
Segment information is presented in accordance with SFAS 131, Disclosures about Segments of an Enterprise and Related Information. This standard is based on a management approach, which requires segmentation based upon the Company's internal organization and disclosure of revenue and operating income based upon internal accounting methods. The Company's financial reporting systems present various data for management to run the business, including internal profit and loss statements (P&Ls) prepared on a basis not consistent with generally accepted accounting principles. Reconciling items include certain elements of unearned revenue, the treatment of certain channel inventory amounts and estimates, and the classification of revenue from product support and consulting. Additionally, the internal P&Ls use accelerated methods of depreciation and amortization. In fiscal 2000, the Company's internal P&Ls included the Black-Scholes value of employee stock option grants, amortized over the remaining months of the fiscal year of the grant, as well as minor changes to the segments' composition due to various internal reorganizations during the year. Fiscal 1999 disclosures have been restated for consistent presentation. It is not practicable to restate fiscal 1998 for these changes.
Revenue attributable to U.S. operations includes shipments to customers in the United States, licensing to OEMs and certain multinational organizations, and exports of finished goods, primarily to Asia, Latin America, and Canada. Revenue from U.S operations totaled $10.1 billion, $13.7 billion, and $15.7 billion in 1998, 1999, and 2000. Revenue from outside the United States, excluding licensing to OEMs and certain multinational organizations and U.S. exports, totaled $5.2 billion, $6.0 billion, and $7.3 billion in 1998, 1999, and 2000.
Long-lived assets totaled $1.5 billion and $1.8 billion in the United States in 1999 and 2000 and $154 million and $126 million in other countries in 1999 and 2000.
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