SEC Comment Letter for MICROSOFT CORP (MSFT) (CIK 0000789019) (MSFT) — Mar 29, 2011
MICROSOFT CORP (MSFT) (CIK 0000789019)
Date: March 29, 2011 · CIK: 0000789019 · Accession: 0000000000-11-019213
AI Filing Summary & Sentiment
Reasoning
File numbers found in text: 000-14278
Referenced dates: March 1, 2011
Letter
March 29, 2011 Via E-mail Frank Brod Corporate Vice President, Finance and Administration Microsoft Corporation One Microsoft Way Redmond, Washingt on 98052-6399
Re: Microsoft Corporation Form 10-K for the Fiscal Year Ended June 30, 2010 Form 10-Q for the Quarterly P eriod Ended December 31, 2010 File No. 000-14278
Dear Mr. Brod: We have reviewed your letter dated Marc h 11, 2011 in connection with the above- referenced filings and have the following commen ts. In some of our comments, we may ask you to provide us with information so we may better understand your disclosure. Please respond to this letter within ten business days by amending your filing, by providing the requested information, or by advi sing us when you will provide the requested response. If you do not believe our comments apply to your fact s and circumstances or do not believe an amendment is appropriate, pl ease tell us why in your response.
After reviewing any amendment to your filing and the information you provide in response to these comments, we may have addi tional comments. Unless otherwise noted, where prior comments are referred to they refe r to our letter dated March 1, 2011. Form 10-K for the Fiscal Year Ended June 30, 2010
Management’s Discussion and Analysis of Fi nancial Condition and Results of Operations
Financial Condition, page 33
1. You indicate in response to prior comment 2 that domestic cash flows from operations continue to be sufficient to fund operating activities and cash commitments for investing and financing activities. Te ll us what consideration you gave to specifying the time period that you believe your domestic cash re sources will be suffi cient, including the short-term and long-term needs and sources of capital. Please refer to Financial Reporting Codification 501.03.a “Liq uidity – Capital Resources.”
Frank Brod Microsoft Corporation March 29, 2011 Page 2 2. You indicate in response to prior comment 2 that borrowing funds domestically may be used to fund discretionary investing and fina ncing activities, such as significant share repurchases. Tell us where this is identified in your liquidity discussion. In this regard, we note your discussion of other planned us es of capital on page 37 indicating that “existing cash, cash equivalents and short-te rm investments, together with funds generated from operations, should be sufficien t to meet operating requirements, regular quarterly dividends, debt repayment schedules, and share repurchases.” Furthermore, in view of that disclosure, y ou should provide the context a nd rationale for your prior issuances of long-term debt in fiscal year s 2009 and 2010. Prior to fiscal year 2009, your long-term debt consisted primarily of tax c ontingencies and other tax liabilities and not long-term borrowings. Please refer to Financial Reporting Codification 501.02 “Prospective Information” and Section IV of SEC Release 33-8350, “Commission Guidance Regarding Management’s Discussion and Analysis of Financial Condition and Results of Operations.”
3. In addition, regarding your re sponse to prior comment 2, in order to provide context for the assets subject to repatria tion, it appears that y our disclosure should also address the nature and composition of such assets held in foreign subsidiaries including a description of the related market, settlemen t or other risk exposures and describe the nature of any limits or restrictions incl uding your ability to use or access those assets to fund operations, domestically or otherwise. Refer to Fina ncial Reporting Codification 501.03.a “Liquidity – Capital Resources” and Financial Reporting Codification 501.03.a.i. “Additional Guidance on Presentatio n of Liquidity and Capital Resources Disclosures.” Please provide us with your proposed disclosures addressing the foregoing concerns.
Form 10-Q for the Quarterly Period Ended December 31, 2010
Notes to Financial Statements
Note 16 – Segment Information, page 25
4. We note your response to prior comment 3. It appears that the im pact of changing the composition of your segments was material as compared to certain amounts previously reported. Specifically, we not e the significant differences in revenue in the Windows & Window Live and Entertainment and Devices divisions. As such, please describe the nature of the changes in future filings.
Frank Brod Microsoft Corporation March 29, 2011 Page 3 You may contact Melissa Wa lsh, Staff Accountant, at (202) 551-3224 if you have questions regarding comments on the financial statem ents and related matters. Please contact me at (202) 551-3226 with any other questions. Sincerely, /s/ Craig D. Wilson C r a i g D . W i l s o n Sr. Asst. Chief Accountant
Show Raw Text
March 29, 2011
Via E-mail
Frank Brod Corporate Vice President, Finance and Administration Microsoft Corporation One Microsoft Way Redmond, Washingt on 98052-6399
Re: Microsoft Corporation
Form 10-K for the Fiscal Year Ended June 30, 2010
Form 10-Q for the Quarterly P eriod Ended December 31, 2010
File No. 000-14278
Dear Mr. Brod:
We have reviewed your letter dated Marc h 11, 2011 in connection with the above-
referenced filings and have the following commen ts. In some of our comments, we may ask you
to provide us with information so we may better understand your disclosure.
Please respond to this letter within ten business days by amending your filing, by
providing the requested information, or by advi sing us when you will provide the requested
response. If you do not believe our comments apply to your fact s and circumstances or do not
believe an amendment is appropriate, pl ease tell us why in your response.
After reviewing any amendment to your filing and the information you provide in
response to these comments, we may have addi tional comments. Unless otherwise noted, where
prior comments are referred to they refe r to our letter dated March 1, 2011.
Form 10-K for the Fiscal Year Ended June 30, 2010
Management’s Discussion and Analysis of Fi nancial Condition and Results of Operations
Financial Condition, page 33
1. You indicate in response to prior comment 2 that domestic cash flows from operations
continue to be sufficient to fund operating activities and cash commitments for investing
and financing activities. Te ll us what consideration you gave to specifying the time
period that you believe your domestic cash re sources will be suffi cient, including the
short-term and long-term needs and sources of capital. Please refer to Financial
Reporting Codification 501.03.a “Liq uidity – Capital Resources.”
Frank Brod Microsoft Corporation March 29, 2011 Page 2
2. You indicate in response to prior comment 2 that borrowing funds domestically may be
used to fund discretionary investing and fina ncing activities, such as significant share
repurchases. Tell us where this is identified in your liquidity discussion. In this regard,
we note your discussion of other planned us es of capital on page 37 indicating that
“existing cash, cash equivalents and short-te rm investments, together with funds
generated from operations, should be sufficien t to meet operating requirements, regular
quarterly dividends, debt repayment schedules, and share repurchases.” Furthermore, in
view of that disclosure, y ou should provide the context a nd rationale for your prior
issuances of long-term debt in fiscal year s 2009 and 2010. Prior to fiscal year 2009, your
long-term debt consisted primarily of tax c ontingencies and other tax liabilities and not
long-term borrowings. Please refer to Financial Reporting Codification 501.02
“Prospective Information” and Section IV of SEC Release 33-8350, “Commission
Guidance Regarding Management’s Discussion and Analysis of Financial Condition and
Results of Operations.”
3. In addition, regarding your re sponse to prior comment 2, in order to provide context for
the assets subject to repatria tion, it appears that y our disclosure should also address the
nature and composition of such assets held in foreign subsidiaries including a description
of the related market, settlemen t or other risk exposures and describe the nature of any
limits or restrictions incl uding your ability to use or access those assets to fund
operations, domestically or otherwise. Refer to Fina ncial Reporting Codification
501.03.a “Liquidity – Capital Resources” and Financial Reporting Codification
501.03.a.i. “Additional Guidance on Presentatio n of Liquidity and Capital Resources
Disclosures.” Please provide us with your proposed disclosures addressing the foregoing
concerns.
Form 10-Q for the Quarterly Period Ended December 31, 2010
Notes to Financial Statements
Note 16 – Segment Information, page 25
4. We note your response to prior comment 3. It appears that the im pact of changing the
composition of your segments was material as compared to certain amounts previously
reported. Specifically, we not e the significant differences in revenue in the Windows &
Window Live and Entertainment and Devices divisions. As such, please describe the
nature of the changes in future filings.
Frank Brod Microsoft Corporation March 29, 2011 Page 3
You may contact Melissa Wa lsh, Staff Accountant, at (202) 551-3224 if you have
questions regarding comments on the financial statem ents and related matters. Please contact me
at (202) 551-3226 with any other questions.
Sincerely,
/s/ Craig D. Wilson C r a i g D . W i l s o n
Sr. Asst. Chief Accountant