Why is Microsoft changing its financial reporting structure?

Microsoft is changing its financial reporting structure to reflect its strategic transformation into a 'devices and services' company. This realignment aims to enable greater speed, efficiency, and capability in innovation and to provide a clearer view of how different business units contribute to the company's strategy.

What are the new reporting segments for Microsoft?

Microsoft is consolidating its reporting into two main groups: 'Devices and Consumer' (D&C) and 'Commercial'. Each of these groups is further broken down into specific sub-segments like D&C Licensing, D&C Hardware, D&C Other, Commercial Licensing, and Commercial Other.

Will these changes affect Microsoft's previously reported net income or earnings per share?

No, the recast segment financial information provided in this 8-K does not affect Microsoft's previously reported net income, earnings per share, total assets, or stockholders' equity for any prior periods.

When will these new reporting segments be reflected in Microsoft's financial statements?

The new reporting structure will be reflected in Microsoft's financial statements beginning with the quarter ending September 30, 2013. Prior periods will be adjusted accordingly to ensure consistent historical data presentation.

MSFT 8-K: Regulation FD

Summary

Microsoft Corporation (MSFT) filed an 8-K on September 19, 2013, to announce a significant shift in its financial reporting structure, effective for fiscal year 2014. This change reflects the company's ongoing transformation into a 'devices and services' company, aligning its reporting segments with this strategic direction. The new structure consolidates its operations into two primary groups: 'Devices and Consumer' (D&C) and 'Commercial,' each with sub-segments detailing specific product and service lines. This realignment is intended to improve the speed, efficiency, and capability of Microsoft's innovation efforts. Investors should note that the company has provided recast historical segment results for fiscal years 2012 and 2013 under this new structure, allowing for a more consistent comparison of performance going forward. While this change does not affect reported net income or EPS for prior periods, it provides a clearer view of how the company's various business units contribute to its overall strategy and financial performance.

Key Highlights

1Microsoft is restructuring its financial reporting to align with its 'devices and services' strategic transformation, effective fiscal year 2014.
2The company is consolidating its operations into two main reporting segments: 'Devices and Consumer' (D&C) and 'Commercial'.
3The D&C segment includes sub-segments for Licensing, Hardware (Xbox, Surface, PC accessories), and Other (Windows Store, Xbox LIVE, advertising, Office 365 Home Premium, retail stores).
4The Commercial segment includes sub-segments for Licensing (server products, Windows/Office volume licensing, Dynamics, Skype) and Other (Enterprise Services, Online Services like Office 365 for business, Windows Azure).
5Microsoft has provided recast historical financial results for FY 2012 and FY 2013 under the new segment structure.
6This recast information does not alter previously reported net income, EPS, total assets, or stockholders' equity.
7The purpose of the filing is to provide the financial community with summary financial information and historical data consistent with the new reporting structure, facilitating more accurate analysis.

MICROSOFT CORP 8-K Report, Regulation FD Disclosure (Sep 20, 2013)

Summary

Key Highlights

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