MSFT - Microsoft Corporation - Q4 2013 Earnings Call Transcript

    Company Name:Microsoft Corporation
    Event Title:Q4 2013 Earnings Call Transcript
    Event Date:18-Jul-2013
    Event Time:05:30 PM ET



    Welcome to the Microsoft Fiscal Year 2013 Fourth Quarter Earnings Conference Call. All lines have been in a listen-only mode until the question and answer session. Today's call is being recorded. If anyone has any objections, please disconnect at this time.

    And I would now like to turn the call over to Chris Suh, General Manager, Investor Relations. Chris you may begin.

    Chris Suh

    General Manager, Investor Relations
    Thank you operator. On our website, is our financial summary slide deck which is intended to follow our prepared remarks and provide the reconciliation of differences between GAAP and non- GAAP financial measures.

    As a reminder, we will post today's prepared remarks to our website immediately following the call until the complete transcript is available. Today's call is being webcast live and recorded. If you ask a question, it will be included in our live transmission, in the transcript and any future use of the recording. You can replay the call and view the transcript at the Microsoft Investor Relations website until July 18, 2014.

    During this call, we will be making forward-looking statements that are predictions, projections or other statements about future events. These statements are based on current expectations and assumptions that are subject to risks and uncertainties. Actual results could materially differ because of factors discussed in today's earnings press release, in the comments made during this conference call, and in the Risk Factors section of our Form 10-K, Form 10-Q and other reports and filings with the Securities and Exchange Commission. We do not undertake any duty to update any forward-looking statement.

    Before I hand the call over to Amy, I would like to remind you all growth comparisons we make on the call today will relate to the corresponding period of last year.

    Also unless specified otherwise, all impacted numbers for the current quarter have been adjusted for the cumulative effect of the revenue deferrals and recognitions related to the Office and Windows upgrade offers, the $900 million charge for inventory adjustments primarily related to the new Surface RT pricing we announced earlier this week an the goodwill impairment charge from last year. You can find the details of the adjustments and reconciliation of differences between GAAP and non- GAAP financial measures in our financial summary of slide deck.

    And with that I'll turn the call over to Amy.

    Amy Hood

    Chief Financial Officer
    Thanks Chris. And good afternoon everyone. Thanks for joining us today. In many ways, our fourth quarter results reflected trends we saw developing throughout the fiscal year. The consumer x86 PC market declined as users continued to prioritize devices with touch and mobility. At the same time, we saw continued strength in our enterprise products and cloud solutions, and increased adoption of our consumer services.

    This quarter, our Windows business declined as the device market continued to evolve beyond the traditional PC. We are working to transition the business into this modern era of computing, taking advantage of the new scenarios enabled by Windows 8. As we’ve said before, given the complexity of the ecosystem, this journey will take time, but we continue to make incremental progress.

    In June, we released the public preview of Windows 8.1. It blends the desktop and modern experience, and has new features and improvements in areas such as personalization, search, built-in apps , and cloud connectivity. Windows 8.1 will be a free update to existing Windows 8 users, and will be made available to OEMs in August, less than one year since launch .

    To increase and improve retail distribution, we entered into a strategic partnership with Best Buy to create a Windows Store in over 600 Best Buy locations. These store-within-a-store locations provide a large-scale, hands-on consumer experience that showcases Microsoft devices and services.

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