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Segment Information
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| 1999 |
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| Revenue |
$ |
17,810 |
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$ |
1,148 |
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$ |
62 |
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$ |
593 |
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$ |
134 |
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$ |
19,747 |
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| 2000 |
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| Revenue |
$ |
20,410 |
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$ |
1,654 |
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$ |
182 |
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$ |
691 |
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$ |
19 |
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$ |
22,956 |
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| Operating income/(loss) |
13,210 |
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(1,090 |
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(60 |
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86 |
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(1,140 |
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11,006 |
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| 2001 |
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| Revenue |
$ |
22,720 |
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$ |
1,961 |
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$ |
522 |
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$ |
652 |
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$ |
(559 |
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$ |
25,296 |
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| Operating income/(loss) |
14,261 |
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(1,666 |
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(222 |
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97 |
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(750 |
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11,720 |
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Desktop and Enterprise Software and Services Revenue:
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| Desktop Applications |
$ |
7,590 |
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$ |
9,013 |
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$ |
9,580 |
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| Desktop Platforms |
6,932 |
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7,383 |
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8,265 |
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Desktop Software |
14,522 |
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16,396 |
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17,845 |
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| Enterprise Software and Services |
3,288 |
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4,014 |
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4,875 |
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Total Desktop and Enterprise Software and Services |
$ |
17,810 |
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$ |
20,410 |
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$ |
22,720 |
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In 2001, Microsoft changed the composition of its segments to reflect the internal reorganization around Microsoft .NET, the Company’s vision for the next-generation of Internet-based products and services. Except for 1999 operating income/(loss), prior year disclosures have been restated for consistent presentation. It is not practicable to discern operating income for 1999 for the current segments due to previous internal reorganizations. 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 operating segment includes Desktop Applications, Desktop Platforms, and Enterprise Software and Services. Desktop Applications include Microsoft Office; Project; Visio; client access licenses for Windows 2000 Server, Windows NT Server, Exchange, and BackOffice; Microsoft Great Plains; and bCentral. Desktop Platforms include Windows 2000 Professional, Windows NT Workstation, Windows Millennium Edition (Windows Me), Windows 98, and other desktop operating systems. Enterprise Software and Services includes Windows NT Server and Windows 2000 Server operating systems, SQL Server and client access licenses, Exchange Server, developer tools, consulting services, product support services, and training and certification. Consumer Software, Services, and Devices operating segment includes MSN Internet access, MSN network services, WebTV Internet access and services, gaming, learning and productivity software, mobile and wireless devices, and embedded systems. Consumer Commerce Investments operating segment includes Expedia, Inc., the HomeAdvisor online real estate service, and the CarPoint online automotive service. Other includes Hardware and Press.
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. Assets are not allocated to segments for internal reporting purposes.
Reconciling items for revenue include certain elements of unearned revenue and the treatment of certain channel inventory amounts and estimates. In addition to the reconciling items for revenue, reconciling items for operating income/(loss) include general and administrative expenses ($1,050 million in 2000 and $857 million in 2001), certain research expenses ($141 million in 2000 and $154 million in 2001), and other corporate level adjustments. The internal P&Ls use accelerated methods of depreciation and amortization. Additionally, losses on equity investees and minority interest are classified in operating income for internal reporting presentations.
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 $13.7 billion, $15.7 billion, and $17.8 billion in 1999, 2000, and 2001. Revenue from outside the United States, excluding licensing to OEMs and certain multinational organizations and U.S. exports, totaled $6.0 billion, $7.3 billion, and $7.5 billion in 1999, 2000, and 2001. A single customer accounted for approximately 11%, 9%, and 8% of revenue in 1999, 2000, and 2001.
Long-lived assets totaled $1.8 billion and $2.2 billion in the United States in 2000 and 2001 and $126 million and $154 million in other countries in 2000 and 2001.
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