Microsoft Corporation (MSFT) $44.83 U.S. Dollar | Bmrk/Ind: FactSet ­ Country / Technology Services ­SEC As of: 23 Jul '14 Profile Key Items Sector Industry Mkt Cap (B) EV (B) Sales (M) Trading Information Valuation 5Y Trend Current vs. Ind vs. Bmrk Technology Services Packaged Software $370.3 $304.6 $86,758 Current Price $44.83 P/E (LTM) 17.0 0.9 1.0 52 Wk Range $30.84 ­ 45.71 P/E (NTM) 15.6 0.9 0.9 Microsoft Corp. develops and markets software, services and hardware that deliver new opportunities, greater Avg Daily Vol (3m) 29.86 (M) P/Sales 4.3 1.2 2.7 convenience and enhanced value to people's lives. The company's products include operating systems for computing devices, servers, phones, and other intelligent devices; server applications for distributed computing Short Int (% of P/Bk 4.2 0.9 3.1 1.2% environments; productivity applications; business solution applications; desktop and server management tools; Float) P/CF 11.6 0.8 1.2 software development tools; video games; and online advertising. It also designs and sells hardware devices Key Statistics EV/EBITDA 9.2 0.7 0.9 including surface rt and surface pro, the xbox 360 gaming and entertainment console, kinect for xbox 360, xbox Mkt Value (B) $370.3 EV/Sales 3.5 1.0 1.4 360 accessories, and microsoft pc accessories. The company operates its business through two segments: Devices and Consumer and Commercial. The Devices and Consumer segments develop, market, and support Ent Value (B) $304.6 products and services designed to entertain and connect people, increase personal productivity, help people Shares Out (M) 8,260 Profitability (%) 10Y Trend LTM Ind Bmrk simplify tasks and make more informed decisions online, and help advertisers connect with audiences. Its Dividend (Ann) $1.12 Gross Margin 70.0 52.6 30.4 Devices and Consumer segments are: D&C licensing comprise of windows, including all original equipment Div Yld 2.5% EBITDA Margin 38.0 26.1 17.2 manufacturer licensing and other non­volume licensing and academic volume licensing of the windows... EBIT Margin 32.7 20.4 12.0 Net Margin 27.0 15.5 8.2 $44.83 Estimates EPS (FY0) $2.63 ROE 27.3 20.4 13.5 YTD 19.8% EPS (FY1) $2.86 3M 12.1% EPS (FY2) $3.16 Growth (%) 10Y Trend LTM Ind Bmrk 1Y 40.0% Beta 0.62 Coverage 27 Analysts Sales 9.7 4.5 3.3 FY1 PE 15.7x Target Price $43.95 EBITDA 3.9 7.5 4.3 LT Growth Rate 10.8% EBIT 1.1 6.9 5.8 Avg Rating Hold (1.75) EPS (Dil) 36.9 3.0 5.2 Price & Volume StreetAccount News 22 JUL '14 11:53 P.M. (ET) Microsoft upgraded to outperform from sector perform at Pacific Crest 22 JUL '14 4:13 P.M. (ET) StreetAccount Metrics Recap ­ Microsoft Q4 Earnings 22 JUL '14 4:05 P.M. (ET) Microsoft reports Q4 EPS $0.55, incl. items 22 JUL '14 10:56 A.M. (ET) StreetAccount Consensus Metrics Preview ­ Microsoft Q4 Earnings 17 JUL '14 2:52 P.M. (ET) WSJ's Heard on the Street column says toughest times still ahead for Microsoft's wireless handset business 17 JUL '14 8:13 A.M. (ET) Microsoft plans to cut up to 18K positions over the next year 16 JUL '14 11:44 P.M. (ET) Microsoft layoffs to be announced 17­Jul ­ NYT ©2014 FactSet Research Systems, Inc. 1 of 9 Microsoft Corporation (MSFT) $44.83 U.S. Dollar | Bmrk/Ind: FactSet ­ Country / Technology Services ­SEC As of: 23 Jul '14 Key Estimates Corporate Information Earnings FY 14 FY 15E FY 16E Q4 14 Q1 15E Q2 15E Q3 15E Management Board Satya Nadella, 47 John Wendell Thompson, 64 EPS ­ GAAP 2.63 2.86 3.17 0.55 0.63 0.79 0.71 Chief Executive Officer & Director Chairman Growth (%) 1.9 8.6 11.0 ­6.8 1.0 1.9 3.9 Brian Kevin Turner, 48 Satya Nadella, 47 EPS ­ Non GAAP 2.67 2.88 3.15 0.59 0.64 0.80 0.69 Chief Operating Officer Chief Executive Officer & Director Growth (%) 2.0 7.7 9.3 ­10.2 1.5 2.0 1.5 Amy E. Hood, 41 Dave F. Marquardt, 65 Income Statement (M) FY 14 FY 15E FY 16E Q4 14 Q1 15E Q2 15E Q3 15E Chief Financial Officer & Executive Vice President Independent Director Sales 86,833 102,023 105,495 23,382 23,009 28,575 24,816 Jim Dubois Charles H. Noski, 61 Growth (%) 11.5 17.5 3.4 17.5 24.2 16.5 21.6 Chief Information Officer & Vice President Independent Director EBITDA 32,166 33,707 36,656 7,652 7,502 9,154 8,309 Frank Henry Brod, 59 Helmut Gunter Gunter Wilhelm Panke, 68 Growth (%) 5.4 4.8 8.7 8.4 2.9 3.7 1.0 CAO, Vice President­Finance & Administration Independent Non­Executive Director Judson Althoff Dina Dublon, 60 Operating Income 27,647 29,077 32,031 6,445 6,425 8,146 7,226 VP, President­North American Sales & Marketing Independent Director Growth (%) 3.3 5.2 10.2 6.1 1.4 2.2 3.6 Net Income 22,074 23,685 25,859 4,612 5,187 6,577 5,822 Growth (%) 1.0 7.3 9.2 ­7.1 ­1.1 0.3 2.9 One Microsoft Way Bradford L. Smith Fiscal Year June Per Share FY 14 FY 15E FY 16E Q4 14 Q1 15E Q2 15E Q3 15E Redmond, Washington Investor Relations Contact Exchange NASDAQ Dividends per Share 1.07 1.13 1.16 0.28 0.28 0.29 0.29 98052­6399 microsoft.com ISIN US5949181045 Cash Flow per Share 3.40 3.70 4.09 0.75 1.17 0.60 1.06 United States Employees (2014) 99,000 CUSIP 594918104 Free Cash Flow per Share 2.76 3.09 3.42 0.54 1.00 0.30 1.03 SEDOL 2588173 Book Value per Share 10.71 12.06 14.19 10.64 10.93 11.43 11.88 Ownership Summary Top Holders ­ Institutions and Insiders FLOAT 91.9% Institutions Position (000) % O/S % Port 3M Chg (000) Mkt Value (USD) Shares Out 8,260,411,904 The Vanguard Group, Inc. 379,854 4.6 1.1 7,256 17,030,733,824 Short Interest 92,223,936 Capital Research & Management Co. (Wo... 316,105 3.8 2.5 29,392 14,172,560,384 SSgA Funds Management, Inc. 310,720 3.8 1.4 ­32,356 13,931,120,640 BlackRock Fund Advisors 296,299 3.6 1.1 2,774 13,284,551,680 Fidelity Management & Research Co. 253,863 3.1 1.4 26,912 11,381,935,104 INSIDER 8.1% Inst. Ownership 72.5% Wellington Management Co. LLP 137,453 1.7 1.5 ­11,957 6,162,726,400 North American 20.6% Northern Trust Investments, Inc. 106,998 1.3 1.4 ­3,813 4,797,255,680 Non­North American 11.8% Invesco PowerShares Capital Managemen... 92,177 1.1 5.1 ­2,703 4,132,759,808 Inst Ownership as % of Float 78.8% Dodge & Cox, Inc. 85,846 1.0 2.5 131 3,848,891,392 Top 10 Inst. Holders 24.9% ValueAct Capital Management LP 74,237 0.9 23.6 2,951 3,328,399,872 PRIMECAP Management Co. 64,192 0.8 3.2 1,566 2,878,036,224 Norges Bank Investment Management 63,452 0.8 0.5 ­3,501 2,844,864,256 Insiders Position (000) % O/S % Port 3M Chg (000) Mkt Value (USD) NET POSITION CHANGE 2,092,793 BALLMER STEVEN ANTHONY 333,254 4.0 100.0 1 14,941,438,976 Total (2627) 5,986,847,232 GATES WILLIAM HENRY III 318,417 3.9 99.9 1 14,276,222,976 New (163) 48,241,360 Increase (1043) 258,628,336 Wellcome Trust Ltd. (Direct Investments) 6,000 0.1 5.3 0 269,009,984 Decrease (1091) ­284,128,576 TURNER BRIAN KEVIN 1,360 0.0 98.2 ­41 60,965,600 Soldout (118) ­20,648,314 NADELLA SATYA 1,089 0.0 99.6 696 48,845,176 ©2014 FactSet Research Systems, Inc. 2 of 9 Microsoft Corporation (MSFT) $44.83 U.S. Dollar | Bmrk/Ind: FactSet ­ Country / Technology Services ­SEC As of: 23 Jul '14 Segments Snapshot ­ Quarterly (M) Targets & Ratings Jun '14 YoY % % of Sales Sep '14E YoY % 3Y Trend Sales 23,382 17.5 100.0 23,009 24.2 Commercial Licensing 11,222 ­ 48.0 10,097 5.2 Devices and Consumer Licensing 4,694 ­ 20.1 4,290 ­1.2 Devices and Consumer Hardware 3,418 ­ 14.6 4,635 212.1 Commercial Other 2,262 ­ 9.7 2,010 25.4 Devices and Consumer Other 1,880 ­ 8.0 1,761 7.7 Corporate and Other ­102 ­ ­0.4 ­25 80.9 Nokia Devices & Services Business ­ ­ ­ ­ ­ LOW MEAN HIGH 34.00 ­24.16% 43.95 ­1.96% 54.00 20.46% Unallocated & Other ­ ­ ­ ­ ­ Entertainment & Devices ­ ­ ­ ­ ­ Microsoft Business Division ­ ­ ­ ­ ­ * Only 10 out of 13 segments shown. See all... Estimate Growth ­ Quarterly Surprise History ­ Quarterly EPS Q1 '14 Q1 '15E Growth (YoY%) 0.62 0.63 1.0% Period After Event Mean Surp Amt Surp (%) Period After Event Mean Surp Amt Surp (%) Sales (M) Q1 '14 Q1 '15E Growth (YoY%) Q1 '15 E 0.63 Q1 '15 E 23,009 18,529 23,009 24.2% Q4 '14 0.55 0.60 ­0.05 ­8.8 Q4 '14 23,382 22,994 388 1.7 Q3 '14 0.68 0.63 0.05 8.4 Q3 '14 20,403 20,386 17 0.1 Q2 '14 0.78 0.68 0.10 14.2 Q2 '14 24,519 23,668 851 3.6 Q1 '14 0.62 0.54 0.08 15.1 Q1 '14 18,529 17,791 738 4.1 Q4 '13 0.59 0.75 ­0.16 ­21.0 Q4 '13 19,896 20,714 ­818 ­3.9 Q3 '13 0.72 0.69 0.03 3.8 Q3 '13 20,489 20,535 ­46 ­0.2 Q2 '13 0.76 0.75 0.01 1.8 Q2 '13 21,456 21,557 ­101 ­0.5 Q1 '13 0.53 0.56 ­0.03 ­5.6 Q1 '13 16,008 16,462 ­454 ­2.8 ©2014 FactSet Research Systems, Inc.