The following Managements Discussion and Analysis (MD&A) is intended to help the reader understand the results of operations and financial condition of Microsoft Corporation. MD&A is provided as a supplement to, and should be read in conjunction with, our financial statements and the accompanying Notes to Financial Statements.
OVERVIEW
Microsoft is a technology company whose mission is to empower every person and every organization on the planet to achieve more. Our strategy is to build best-in-class platforms and productivity services for a mobile-first, cloud-first world. We develop, license, and support a wide range of software products, services, and devices that deliver new opportunities, greater convenience, and enhanced value to peoples lives.
We generate revenue by licensing and supporting an array of software products, by offering a wide range of services, including cloud-based services to consumers and businesses, by designing, manufacturing, and selling devices that integrate with our cloud-based services, and by delivering relevant online advertising to a global audience. Our most significant expenses are related to compensating employees; designing, manufacturing, marketing, and selling our products and services; datacenter costs in support of our cloud-based services; and income taxes.
Much of our focus in fiscal year 2016 was toward transforming our organization to support our strategy of building best-in-class platforms and productivity services for a mobile-first, cloud-first world. We achieved product development milestones, implemented organizational changes, and made strategic and tactical moves to support the three central ambitions that support our strategy: reinventing productivity and business processes; building the intelligent cloud platform; and creating more personal computing.
Highlights from fiscal year 2016 included:
| | Commercial cloud annualized revenue run rate* exceeded $12.1 billion. |
| | Office 365 Consumer subscribers increased to 23.1 million. |
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| | Microsoft Dynamics (Dynamics) CRM Online seat additions more than doubled year-over-year. |
| | Microsoft Azure (Azure) revenue grew 113%, with usage of Azure compute and Azure SQL database more than doubling year-over-year. Enterprise Mobility customers nearly doubled year-over-year to over 33,000. |
| | Windows 10 is now active on more than 350 million devices around the world. |
| | Xbox Live monthly active users grew 33% year-over-year to 49 million. |
| * | Commercial cloud annualized revenue run rate is calculated by multiplying revenue for the last month of the quarter by twelve for Office 365 commercial, Azure, Dynamics Online, and other cloud properties. |
In June 2016, we entered into a definitive agreement to acquire LinkedIn for $196 per share in an all-cash transaction valued at $26.2 billion, inclusive of LinkedIns net cash (the Merger Agreement). We will finance the transaction primarily through the issuance of new indebtedness. The Merger Agreement has been unanimously approved by the Boards of Directors of both Microsoft and LinkedIn, and we expect the acquisition will close in calendar year 2016, subject to approval by LinkedIns shareholders, satisfaction of certain regulatory approvals, and other customary closing conditions. The acquisition is anticipated to accelerate the growth of LinkedIn, as well as Office 365 and Dynamics.
In May 2016, we announced the sale of our entry-level feature phone business for $350 million. The transaction is expected to close in the second half of 2016, subject to regulatory approvals and other closing conditions.
In July 2015, we announced a plan to restructure our phone business to better focus and align resources. In May 2016, we announced plans to further streamline our smartphone hardware business. These changes in the phone business reinforce our strategy to create a vibrant Windows ecosystem with a single set of experiences across our first-party device family and original equipment manufacturer (OEM) offerings. Part of this strategy involves focusing our phone devices on a narrower range of customer categories and differentiating through the combination of hardware and software we are uniquely positioned to offer. As anticipated, our change in phone strategy resulted in a reduction in units sold and associated expenses in fiscal year 2016, and this trend is expected to continue in fiscal year 2017.
Industry Trends
Our industry is dynamic and highly competitive, with frequent changes in both technologies and business models. Each industry shift is an opportunity to conceive new products, new technologies, or new ideas that can further transform the industry and our business. At Microsoft, we push the boundaries of what is possible through a broad range of research and development activities that seek to identify and address the changing demands of customers and users, industry trends, and competitive forces.
Economic Conditions, Challenges, and Risks
The market for software, devices, and cloud-based services is dynamic and highly competitive. Our competitors are developing new software and devices, while also deploying competing cloud-based services for consumers and businesses. The devices and form factors customers prefer evolve rapidly, and influence how users access services in the cloud, and in some cases, the users choice of which suite of cloud-based services to use. We must continue to evolve and adapt over an extended time in pace with this changing environment. The investments we are making in devices and infrastructure will continue to increase our operating costs and may decrease our operating margins.
Our success is highly dependent on our ability to attract and retain qualified employees. We hire a mix of university and industry talent worldwide. Microsoft competes for talented individuals globally by offering an exceptional working environment, broad customer reach, scale in resources, the ability to grow ones career across many different products and businesses, and competitive compensation and benefits. Aggregate demand for our software, services, and devices is correlated to global macroeconomic and geopolitical factors, which remain dynamic.
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Our international operations provide a significant portion of our total revenue and expenses. Many of these revenue and expenses are denominated in currencies other than the U.S. dollar. As a result, changes in foreign exchange rates may significantly affect revenue and expenses. The strengthening of the U.S. dollar relative to certain foreign currencies throughout fiscal year 2015, and continuing into fiscal year 2016, negatively impacted reported revenue and reduced reported expenses from our international operations.
See a discussion of these factors and other risks under Risk Factors (Part I, Item 1A of this Form 10-K).
Seasonality
Our revenue historically has fluctuated quarterly and has generally been highest in the second quarter of our fiscal year due to corporate calendar year-end spending trends in our major markets and holiday season spending by consumers.
Unearned Revenue
Quarterly and annual revenue is impacted by the deferral of revenue, primarily including:
| | Revenue deferred on Windows 10 licenses to reflect ratable recognition over the life of the device. |
| | Revenue deferred on bundled products and services (Bundled Offerings). |
If our customers choose to license cloud-based versions of our products and services rather than licensing transaction-based products and services, the associated revenue will shift from being recognized at the time of the transaction to being recognized over the subscription period or upon consumption, as applicable.
Product Revenue and Service and Other Revenue
Due to the growth in our cloud-based solutions, service revenue exceeded 10% of total revenue for the first time in fiscal year 2016. As a result, we have separately disclosed product revenue and service and other revenue on our consolidated income statements.
Product revenue includes sales from operating systems; cross-device productivity applications; server applications; business solution applications; desktop and server management tools; software development tools; video games; hardware such as PCs, tablets, gaming and entertainment consoles, phones, other intelligent devices, and related accessories; and training and certification of computer system integrators and developers.
Service and other revenue includes sales from cloud-based solutions that provide customers with software, services, platforms, and content such as Office 365, Azure, Dynamics CRM Online, and Xbox Live; solution support; and consulting services. Service and other revenue also includes sales from online advertising.
Reportable Segments
The segment amounts included in MD&A are presented on a basis consistent with our internal management reporting. Segment information appearing in Note 21 Segment Information and Geographic Data of the Notes to Financial Statements (Part II, Item 8 of this Form 10-K) is also presented on this basis. All differences between our internal management reporting basis and accounting principles generally accepted in the United States (U.S. GAAP), along with certain corporate-level and other activity, are included in Corporate and Other.
In June 2015, we announced a change in organizational structure to align to our strategic direction as a productivity and platform company. During the first quarter of fiscal year 2016, our chief operating decision maker, who is also our Chief Executive Officer, requested changes in the information that he regularly reviews for purposes of allocating resources and assessing performance. As a result, beginning in fiscal year 2016, we report our financial performance based on our new segments, Productivity and Business Processes, Intelligent Cloud, and More Personal Computing, and analyze operating income as the measure of segment profitability. We have recast certain previously reported amounts to conform to the way we internally manage and monitor segment performance.
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We expect to report the financial performance of LinkedIn as part of our Productivity and Business Processes segment.
Additional information on our reportable segments is contained in Note 21 Segment Information and Geographic Data of the Notes to Financial Statements (Part II, Item 8 of this Form 10-K).
SUMMARY RESULTS OF OPERATIONS
| (In millions, except percentages and per share amounts) | 2016 | 2015 | 2014 | Percentage Change 2016 Versus 2015 |
Percentage Change 2015 Versus 2014 |
|||||||||||||||
| Revenue |
$ | 85,320 | $ | 93,580 | $ | 86,833 | (9)% | 8% | ||||||||||||
| Gross margin |
$ | 52,540 | $ | 60,542 | $ | 59,755 | (13)% | 1% | ||||||||||||
| Operating income |
$ | 20,182 | $ | 18,161 | $ | 27,759 | 11% | (35)% | ||||||||||||
| Diluted earnings per share |
$ | 2.10 | $ | 1.48 | $ | 2.63 | 42% | (44)% | ||||||||||||
Fiscal year 2016 compared with fiscal year 2015
Revenue decreased $8.3 billion or 9%, primarily due to the impact of the net revenue deferral from Windows 10 of $6.6 billion and an unfavorable foreign currency impact of approximately $3.8 billion or 4%. Windows 10 revenue is primarily recognized at the time of billing in the More Personal Computing segment, and the deferral and subsequent recognition of revenue is reflected in Corporate and Other. More Personal Computing revenue decreased, mainly due to lower revenue from Devices and Windows, offset in part by higher revenue from search advertising and Gaming. Intelligent Cloud revenue increased, primarily due to higher revenue from server products and cloud services and Enterprise Services. Productivity and Business Processes revenue increased slightly, driven by an increase in Office and Dynamics revenue.
Operating income increased $2.0 billion or 11%, primarily due to a decrease in impairment, integration, and restructuring expenses and sales and marketing expenses, offset in part by lower gross margin. Gross margin decreased $8.0 billion or 13%, driven by the decline in revenue as discussed above, and included an unfavorable foreign currency impact of approximately $3.3 billion or 5%. Productivity and Business Processes and More Personal Computing gross margin decreased, offset in part by higher gross margin from Intelligent Cloud.
Key changes in expenses were:
| | Cost of revenue decreased $258 million or 1%, mainly due to a reduction in phone sales, driven by the change in strategy for the phone business, offset in part by growth in commercial cloud and search advertising. |
| | Impairment, integration, and restructuring expenses decreased $8.9 billion, primarily driven by prior year goodwill and asset impairment charges related to our phone business and restructuring charges associated with our phone business restructuring plans. |
| | Sales and marketing expenses decreased $1.0 billion or 6%, driven by a reduction in phone expenses and a favorable foreign currency impact of approximately 2%. |
Diluted earnings per share (EPS) was $2.10 for fiscal year 2016. Current year diluted EPS was negatively impacted by the net revenue deferral from Windows 10 and impairment, integration, and restructuring expenses, which resulted in a decrease to diluted EPS of $0.69, and favorably impacted by the adoption of new accounting guidance related to stock-based compensation, which resulted in an increase to diluted EPS of $0.05. Diluted EPS was $1.48 for fiscal year 2015. Prior year diluted EPS was negatively impacted by impairment, integration, and restructuring expenses, which resulted in a decrease to diluted EPS of $1.15.
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Fiscal year 2015 compared with fiscal year 2014
Revenue increased $6.7 billion or 8%, primarily due to higher revenue from More Personal Computing and Intelligent Cloud. More Personal Computing revenue increased, primarily due to higher revenue from Devices, search advertising and Gaming, offset in part by a decline in Windows revenue. Intelligent Cloud revenue increased, primarily due to higher revenue from server products and cloud services. Revenue included an unfavorable foreign currency impact of approximately 2%.
Operating income decreased $9.6 billion or 35%, primarily due to impairment, integration, and restructuring expenses in fiscal year 2015, as well as increased research and development expenses, offset in part by higher gross margin. Gross margin increased $787 million or 1%, driven by our Intelligent Cloud, offset in part by a reduction in gross margin from Productivity and Business Processes. Key changes in expenses were:
| | Cost of revenue increased $6.0 billion or 22%, mainly due to phone sales, as well as increasing costs in support of our commercial cloud, including $396 million of higher datacenter expenses. |
| | Impairment, integration, and restructuring expenses were $10.0 billion in fiscal year 2015, reflecting goodwill and asset impairment charges of $7.5 billion related to our phone business, and $2.5 billion of integration and restructuring expenses, primarily driven by costs associated with our phone business restructuring plans. |
| | Research and development expenses increased $665 million or 6%, mainly due to increased investment in new products and services, including phone expenses, offset in part by reduced headcount-related expenses. |
Diluted EPS was $1.48 for fiscal year 2015. Diluted EPS was negatively impacted by impairment, integration, and restructuring expenses, which decreased diluted EPS by $1.15.
SEGMENT RESULTS OF OPERATIONS
| (In millions, except percentages) | 2016 | 2015 | 2014 | Percentage Change 2016 Versus 2015 |
Percentage Change 2015 Versus 2014 |
|||||||||||||||
| Revenue |
||||||||||||||||||||
| Productivity and Business Processes |
$ | 26,487 | $ | 26,430 | $ | 26,976 | 0% | (2)% | ||||||||||||
| Intelligent Cloud |
25,042 | 23,715 | 21,735 | 6% | 9% | |||||||||||||||
| More Personal Computing |
40,460 | 43,160 | 38,460 | (6)% | 12% | |||||||||||||||
| Corporate and Other |
(6,669 | ) | 275 | (338 | ) | * | * | |||||||||||||
| Total revenue |
$ | 85,320 | $ | 93,580 | $ | 86,833 | (9)% | 8% | ||||||||||||
| Operating income (loss) |
||||||||||||||||||||
| Productivity and Business Processes |
$ | 12,461 | $ | 13,359 | $ | 14,173 | (7)% | (6)% | ||||||||||||
| Intelligent Cloud |
9,358 | 9,871 | 8,446 | (5)% | 17% | |||||||||||||||
| More Personal Computing |
6,142 | 4,667 | 5,605 | 32% | (17)% | |||||||||||||||
| Corporate and Other |
(7,779 | ) | (9,736 | ) | (465 | ) | * | * | ||||||||||||
| Total operating income |
$ | 20,182 | $ | 18,161 | $ | 27,759 | 11% | (35)% | ||||||||||||
| * | Not meaningful |
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Reportable Segments
Fiscal year 2016 compared with fiscal year 2015
Productivity and Business Processes
Productivity and Business Processes revenue increased slightly, primarily due to an increase in Office and Dynamics revenue. Revenue included an unfavorable foreign currency impact of approximately 6%.
| | Office Commercial revenue increased $135 million or 1%, driven by higher revenue from Office 365 commercial, mainly due to growth in subscribers, offset by lower transactional license volume, reflecting a continued shift to Office 365 commercial and a decline in the business PC market. Revenue included an unfavorable foreign currency impact of approximately 6%. |
| | Office Consumer revenue decreased $69 million or 2%, driven by a decline in the consumer PC market, offset in part by higher revenue from Office 365 consumer, mainly due to growth in subscribers. Revenue included an unfavorable foreign currency impact of approximately 4%. |
| | Dynamics revenue increased 4%, mainly due to higher revenue from Dynamics CRM Online, driven by seat growth. Revenue included an unfavorable foreign currency impact of approximately 6%. |
Productivity and Business Processes operating income decreased $898 million or 7%, driven by lower gross margin. Gross margin decreased $970 million or 4%, primarily due to higher cost of revenue. Gross margin included an unfavorable foreign currency impact of approximately 6%. Cost of revenue increased $1.0 billion or 26%, primarily due to an increased mix of cloud offerings. Operating expenses decreased $72 million or 1%, driven by lower sales and marketing expenses. Sales and marketing expenses decreased $82 million or 2%, mainly due to a reduction in headcount-related expenses and lower fees paid to third-party enterprise software advisors.
Intelligent Cloud
Intelligent Cloud revenue increased $1.3 billion or 6%, primarily due to higher server products and cloud services revenue and Enterprise Services revenue. Revenue included an unfavorable foreign currency impact of approximately 5%.
| | Server products and cloud services revenue grew $686 million or 4%, driven by revenue growth from Azure of 113%, offset in part by a decline in transactional revenue from our on-premises server products. Revenue included an unfavorable foreign currency impact of approximately 5%. |
| | Enterprise Services revenue grew $536 million or 11%, mainly due to growth in Premier Support Services. Revenue included an unfavorable foreign currency impact of approximately 5%. |
Intelligent Cloud operating income decreased $513 million or 5%, primarily due to higher operating expenses, offset in part by higher gross margin. Operating expenses increased $989 million or 12%, mainly due to higher research and development expenses and sales and marketing expenses. Research and development expenses increased $567 million or 21% and sales and marketing expenses increased $347 million or 9%, driven by increased strategic investments and acquisitions to drive cloud sales capacity and innovation. Gross margin increased $476 million or 3%, driven by revenue growth, offset in part by higher cost of revenue. Gross margin included an unfavorable foreign currency impact of approximately 5%. Cost of revenue increased $851 million or 15%, primarily driven by an increased mix of cloud services.
More Personal Computing
More Personal Computing revenue decreased $2.7 billion or 6%, mainly due to lower revenue from Devices and Windows, offset in part by higher revenue from search advertising and Gaming. Revenue included an unfavorable foreign currency impact of approximately 2%.
| | Devices revenue decreased $3.7 billion or 32%, mainly due to lower revenue from phones, driven by the change in strategy for the phone business, offset in part by higher Microsoft Surface (Surface) revenue. |
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| Phone revenue decreased $4.2 billion or 56%, as we sold 13.8 million Microsoft Lumia (Lumia) phones and 75.5 million other phones in fiscal year 2016, compared with 36.8 million and 126.8 million sold, respectively, in fiscal year 2015. Surface revenue increased $486 million or 13%, primarily driven by the release of Surface Pro 4 and Surface Book in the second quarter of fiscal year 2016, as well as the release of Surface 3 in the fourth quarter of fiscal year 2015, offset in part by a decline in revenue from Surface Pro 3. Devices revenue included an unfavorable foreign currency impact of approximately 3%. |
| | Windows revenue decreased $871 million or 5%, mainly due to lower revenue from patent licensing, Windows OEM licensing (Windows OEM), and Windows Phone licensing. Patent licensing revenue decreased 27%, due to a decline in license revenue per unit and licensed units. Windows OEM revenue decreased 1%. Windows OEM Pro revenue declined 6%, driven by a decline in the business PC market. Windows OEM non-Pro revenue increased 7%, outperforming the consumer PC market, driven by a higher mix of premium licenses sold. Windows Phone licensing revenue decreased 64%, driven by the recognition of deferred revenue in fiscal year 2015 from Windows Phone 8. Windows revenue included an unfavorable foreign currency impact of approximately 2%. |
| | Search advertising revenue increased $1.7 billion or 46%. Search advertising revenue, excluding traffic acquisition costs, increased 17%, primarily driven by growth in Bing, due to higher revenue per search and search volume. Search advertising revenue included an unfavorable foreign currency impact of approximately 2%. |
| | Gaming revenue increased $132 million or 1%, primarily due to higher revenue from Xbox Live and video games, offset in part by lower Xbox hardware revenue. Xbox Live revenue increased 17%, driven by higher revenue per transaction and volume of transactions. Video games revenue grew 34%, driven by the launch of Halo 5 and sales of Minecraft. We acquired Mojang AB (Mojang), the Swedish video game developer of the Minecraft gaming franchise, in November 2014. Xbox hardware revenue decreased 16%, mainly due to lower prices of Xbox One consoles sold and a decline in Xbox 360 console volume, offset in part by higher Xbox One console volume. Gaming revenue included an unfavorable foreign currency impact of approximately 4%. |
More Personal Computing operating income increased $1.5 billion or 32%, primarily due to lower operating expenses, offset in part by lower gross margin. Operating expenses decreased $2.0 billion or 13%, mainly due to lower sales and marketing expenses and research and development expenses. Sales and marketing expenses decreased $1.3 billion or 19% and research and development expenses decreased $676 million or 10%, driven by a reduction in phone expenses. Gross margin decreased $564 million or 3%, reflecting lower revenue, offset in part by a reduction in cost of revenue. Gross margin included an unfavorable foreign currency impact of approximately 5%. Cost of revenue decreased $2.1 billion or 9%, primarily driven by a reduction in phone sales, offset in part by higher search advertising cost of revenue.
Fiscal year 2015 compared with fiscal year 2014
Productivity and Business Processes
Productivity and Business Processes revenue decreased $546 million or 2%, mainly due to a decline in revenue from Office, offset in part by growth in revenue from Dynamics. Revenue included an unfavorable foreign currency impact of approximately 2%.
| | Office Consumer revenue decreased $624 million or 17%, driven by declines in the Japan PC market, where Office is predominantly pre-installed on new PCs, offset in part by subscriber growth of Office 365 consumer. |
| | Office Commercial revenue decreased $152 million or 1%, driven by lower transactional license volume, reflecting a decline in the business PC market following Windows XP end of support in the prior year, and declines in Japan, offset in part by subscriber growth and higher premium mix of Office 365 commercial. |
| | Dynamics revenue grew 12%, mainly due to higher revenue from Dynamics CRM Online and Dynamics ERP products. Dynamics users increased, with 30% growth in number of Dynamics paid seats, and we ended fiscal year 2015 with over eight million paid seats. |
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Productivity and Business Processes operating income decreased $814 million or 6%, driven by lower gross margin, offset in part by a reduction in operating expenses. Gross margin decreased $1.0 billion or 4%, primarily due to the decline in Office Consumer revenue. Gross margin included an unfavorable foreign currency impact of approximately 2%. Cost of revenue increased $492 million or 15%, primarily due to higher cloud infrastructure expenses, reflecting increased datacenter capacity to serve our Office 365 offerings. Operating expenses decreased $224 million or 2%. Sales and marketing and general and administrative expenses decreased $258 million and $125 million, respectively, mainly due to lower headcount-related expenses. Research and development expenses increased $159 million or 6%, mainly due to increased investment in new products and services.
Intelligent Cloud
Intelligent Cloud revenue increased $2.0 billion or 9%, mainly due to higher server products and services revenue, as well as higher Enterprise Services revenue. Revenue included an unfavorable foreign currency impact of approximately 2%.
| | Server products and cloud services revenue grew $1.6 billion or 9%, primarily driven by higher premium mix of Microsoft SQL Server, Windows Server, and System Center, as well as continued revenue growth from Azure. |
| | Enterprise Services revenue grew $325 million or 7%, mainly due to growth in Premier Support Services. |
Intelligent Cloud operating income increased $1.4 billion or 17%, primarily due to higher gross margin, offset in part by higher operating expenses. Gross margin increased $1.6 billion or 10%, driven by revenue growth from our server products and services. Gross margin included an unfavorable foreign currency impact of approximately 2%. Cost of revenue increased $404 million or 7%, mainly due to higher cloud infrastructure expenses, reflecting increased datacenter capacity for our Azure services. Operating expenses increased $151 million or 2%, driven by higher research and development expenses. Research and development expenses increased $160 million or 6%, mainly due to increased investment in new products and services.
More Personal Computing
More Personal Computing revenue increased $4.7 billion or 12%, mainly due to growth in Devices, search advertising, and Gaming revenue, offset in part by a decline in revenue from Windows.
| | Devices revenue increased $7.0 billion or 152%, mainly due to a full year of phone sales and higher Surface revenue. Devices revenue included an unfavorable foreign currency impact of approximately 5%. Phones revenue increased $5.5 billion, as we sold 36.8 million Lumia phones and 126.8 million other phones in fiscal year 2015, compared with 5.8 million and 30.3 million sold, respectively, in fiscal year 2014 following the acquisition of Nokia Corporations (Nokia) Devices and Services business (NDS). We acquired NDS in the fourth quarter of fiscal year 2014. Surface revenue increased 65% to $3.6 billion, primarily due to Surface Pro 3 units sold. Surface Pro 3 was released in June 2014. |
| | Search advertising revenue increased $651 million or 22%, primarily driven by growth in Bing, due to higher revenue per search and search volume. |
| | Gaming revenue increased $463 million or 5%, mainly due to growth in Xbox Live and video games revenue, offset in part by a decrease in Xbox hardware revenue and third-party video game royalties. We sold 12.1 million Xbox consoles in fiscal year 2015 compared with 11.7 million consoles in fiscal year 2014. Xbox Live revenue increased $500 million, driven by increased Xbox Live users and revenue per user. Video games revenue increased $265 million, mainly due to sales of Minecraft following the acquisition of Mojang in November 2014, and new Xbox titles released in the current year. |
| | Windows revenue decreased $3.6 billion or 16%, mainly due to lower revenue from Windows OEM and Windows Phone. Windows OEM revenue decreased $1.9 billion or 15%, primarily due to declines of 15% in OEM Pro revenue and 16% in OEM non-Pro revenue. Windows OEM Pro revenue decreased, primarily due to benefits realized from the expiration of support for Windows XP in the prior year, and declines in the |
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| business PC market. Windows OEM non-Pro revenue declined, mainly due to an increased mix of opening price point devices sold, and declines in the consumer PC market. Windows Phone revenue, including related patent licensing, decreased $1.4 billion or 55%, primarily due to prior year revenue associated with our joint strategic initiatives with Nokia that terminated when we acquired NDS. |
More Personal Computing operating income decreased $938 million or 17%, primarily due to higher operating expenses, as well as a reduction in gross margin. Gross margin decreased $364 million or 2%, reflecting a reduction in Windows gross margin, offset in part by an increase in devices gross margin. Cost of revenue increased $5.1 billion or 28%, driven by higher phones cost of revenue, as well as higher Xbox Live and search infrastructure costs, offset in part by a reduction in Windows Phone cost of revenue. Phones cost of revenue increased $4.8 billion, reflecting a full year of phone sales in fiscal year 2015. Windows Phone cost of revenue decreased $897 million, driven by prior year costs associated with our joint strategic initiatives with Nokia that terminated when we acquired NDS. Operating expenses increased $574 million or 4%, driven by a full year of NDS expenses. Research and development expenses increased $346 million or 5%, mainly due to increased investment in new product and services, including higher phone expenses, offset in part by reduced headcount-related expenses. Sales and marketing expenses increased $211 million or 3%, primarily due to higher phone expenses, offset in part by a decline in advertising and other marketing program costs.
Corporate and Other
Corporate and Other revenue primarily comprises certain revenue deferrals, including those related to Windows 10, Bundled Offerings, and video games. Corporate and Other operating income (loss) primarily comprises revenue deferrals and corporate-level activity not specifically allocated to a segment, including impairment, integration, and restructuring expenses.
Fiscal year 2016 compared with fiscal year 2015
Corporate and Other revenue decreased $6.9 billion, primarily due to the impact of the net revenue deferral from Windows 10. During fiscal year 2016, we deferred net revenue from Windows 10 of $6.6 billion. During fiscal year 2015, we recognized a net $303 million of previously deferred revenue related to Bundled Offerings.
Corporate and Other operating loss decreased $2.0 billion, primarily due to an $8.9 billion reduction in impairment, integration, and restructuring expenses, driven by prior year goodwill and asset impairment charges related to our phone business, offset in part by lower revenue.
Fiscal year 2015 compared with fiscal year 2014
Corporate and Other revenue increased $613 million, primarily due to the timing of net revenue deferrals compared to the prior year. During fiscal year 2015, we recognized a net $303 million of previously deferred revenue related to Bundled Offerings. During fiscal year 2014, we deferred a net $349 million of revenue related to Bundled Offerings.
Corporate and Other operating loss increased $9.3 billion, primarily due to higher impairment, integration, and restructuring expenses, offset in part by increased revenue.
OPERATING EXPENSES
Research and Development
| (In millions, except percentages) | 2016 | 2015 | 2014 | Percentage Change 2016 Versus 2015 |
Percentage Change 2015 Versus 2014 |
|||||||||||||||
| Research and development |
$ | 11,988 | $ | 12,046 | $ | 11,381 | 0% | 6% | ||||||||||||
| As a percent of revenue |
14% | 13% | 13% | 1ppt | 0ppt | |||||||||||||||
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Research and development expenses include payroll, employee benefits, stock-based compensation expense, and other headcount-related expenses associated with product development. Research and development expenses also include third-party development and programming costs, localization costs incurred to translate software for international markets, and the amortization of purchased software code.
Fiscal year 2016 compared with fiscal year 2015
Research and development expenses decreased $58 million, primarily due to a reduction in phone expenses, driven by the change in strategy for the phone business, offset in part by increased strategic investments and acquisitions to drive cloud innovation.
Fiscal year 2015 compared with fiscal year 2014
Research and development expenses increased $665 million or 6%, mainly due to increased investment in new products and services, including $739 million higher phone expenses, offset in part by reduced headcount-related expenses.
Sales and Marketing
| (In millions, except percentages) | 2016 | 2015 | 2014 | Percentage Change 2016 Versus 2015 |
Percentage Change 2015 Versus 2014 |
|||||||||||||||
| Sales and marketing |
$ | 14,697 | $ | 15,713 | $ | 15,811 | (6)% | (1)% | ||||||||||||
| As a percent of revenue |
17% | 17% | 18% | 0ppt | (1)ppt | |||||||||||||||
Sales and marketing expenses include payroll, employee benefits, stock-based compensation expense, and other headcount-related expenses associated with sales and marketing personnel and the costs of advertising, promotions, trade shows, seminars, and other programs.
Fiscal year 2016 compared with fiscal year 2015
Sales and marketing expenses decreased $1.0 billion or 6%, primarily due to a reduction in phone expenses, driven by the change in strategy for the phone business. Expenses included a favorable foreign currency impact of approximately 2%.
Fiscal year 2015 compared with fiscal year 2014
Sales and marketing expenses decreased $98 million or 1%, primarily due to a decline in advertising and marketing programs costs and a reduction in headcount-related expenses, offset in part by an increase in phone expenses. Expenses included a favorable foreign currency impact of approximately 4%.
General and Administrative
| (In millions, except percentages) | 2016 | 2015 | 2014 | Percentage Change 2016 Versus 2015 |
Percentage Change 2015 Versus 2014 |
|||||||||||||||
| General and administrative |
$ | 4,563 | $ | 4,611 | $ | 4,677 | (1)% | (1)% | ||||||||||||
| As a percent of revenue |
5% | 5% | 5% | 0ppt | 0ppt | |||||||||||||||
General and administrative expenses include payroll, employee benefits, stock-based compensation expense, severance expense, and other headcount-related expenses associated with finance, legal, facilities, certain human resources and other administrative personnel, certain taxes, and legal and other administrative fees.
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Fiscal year 2016 compared with fiscal year 2015
General and administrative expenses decreased $48 million or 1%, primarily due to a reduction in employee-related expenses, offset in part by increased investments in infrastructure supporting our business transformation. Expenses included a favorable foreign currency impact of approximately 2%.
Fiscal year 2015 compared with fiscal year 2014
General and administrative expenses were comparable to the prior year.
IMPAIRMENT, INTEGRATION, AND RESTRUCTURING EXPENSES
Impairment, integration, and restructuring expenses include costs associated with the impairment of goodwill and intangible assets related to our phone business, employee severance expenses and costs associated with the consolidation of facilities and manufacturing operations related to restructuring activities, and systems consolidation and other business integration expenses associated with our acquisition of NDS.
Fiscal year 2016 compared with fiscal year 2015
Impairment, integration, and restructuring expenses were $1.1 billion for fiscal year 2016, compared to $10.0 billion for fiscal year 2015.
During fiscal year 2016, we recorded $630 million of asset impairment charges related to our phone business. We also recorded $480 million of restructuring charges, including employee severance expenses and contract termination costs, primarily related to our previously announced phone business restructuring plans.
During fiscal year 2015, we recognized impairment charges of $7.5 billion related to our phone business. Our annual goodwill impairment test as of May 1, 2015 indicated that the carrying value of our previous Phone Hardware reporting unit goodwill exceeded its estimated fair value. Accordingly, we recorded a goodwill impairment charge of $5.1 billion, reducing our Phone Hardware reporting unit goodwill from $5.4 billion to $116 million, net of foreign currency remeasurements, as well as an impairment charge of $2.2 billion related to the write-down of our Phone Hardware reporting unit intangible assets. All remaining goodwill and intangible assets are included in our Devices reporting unit, within More Personal Computing under our current segment structure. Restructuring charges were $2.1 billion, including employee severance expenses and the write-down of certain assets in connection with our restructuring activities. Integration expenses associated with the acquisition of NDS were $435 million in fiscal year 2015.
Fiscal year 2015 compared with fiscal year 2014
Impairment, integration, and restructuring expenses were $10.0 billion for fiscal year 2015, compared to $127 million for fiscal year 2014. Impairment, integration, and restructuring expenses for fiscal year 2015 are comprised mainly of impairment and restructuring charges of $7.5 billion and $2.1 billion, respectively, related to our phone business. Integration expenses increased $308 million, due to a full-year of integration activities in fiscal year 2015 associated with the acquisition of NDS.
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OTHER INCOME (EXPENSE), NET
The components of other income (expense), net were as follows:
| (In millions) | ||||||||||||
| Year Ended June 30, | 2016 | 2015 | 2014 | |||||||||
| Dividends and interest income |
$ | 903 | $ | 766 | $ | 883 | ||||||
| Interest expense |
(1,243 | ) | (781 | ) | (597 | ) | ||||||
| Net recognized gains on investments |
668 | 716 | 437 | |||||||||
| Net losses on derivatives |
(443 | ) | (423 | ) | (328 | ) | ||||||
| Net gains (losses) on foreign currency remeasurements |
(121 | ) | 335 | (165 | ) | |||||||
| Other |
(195 | ) | (267 | ) | (169 | ) | ||||||
| Total |
$ | (431 | ) | $ | 346 | $ | 61 | |||||
We use derivative instruments to: manage risks related to foreign currencies, equity prices, interest rates, and credit; enhance investment returns; and facilitate portfolio diversification. Gains and losses from changes in fair values of derivatives that are not designated as hedges are primarily recognized in other income (expense), net. Other than those derivatives entered into for investment purposes, such as commodity contracts, the gains (losses) are generally economically offset by unrealized gains (losses) in the underlying available-for-sale securities and gains (losses) on certain balance sheet amounts from foreign exchange rate changes.
Fiscal year 2016 compared with fiscal year 2015
Dividends and interest income increased due to higher portfolio balances and slightly higher yields on fixed-income securities. Interest expense increased due to higher outstanding long-term debt. Net recognized gains on investments decreased primarily due to higher other-than-temporary impairments and lower gains on sales of fixed-income securities, offset in part by higher gains on sales of equity securities. Other-than-temporary impairments were $322 million in fiscal year 2016, compared with $183 million in fiscal year 2015. Net losses on derivatives increased due to higher losses on currency and equity contracts and lower gains on interest rate contracts in the current period as compared to the prior period, offset in part by lower losses on commodity contracts. For fiscal year 2016, other reflects recognized losses from divestitures and certain joint ventures.
Fiscal year 2015 compared with fiscal year 2014
Dividends and interest income decreased due to lower yields on fixed-income securities, offset in part by higher portfolio balances. Interest expense increased due to higher outstanding long-term debt. Net recognized gains on investments increased primarily due to higher gains on sales of equity securities, offset in part by higher other-than-temporary impairments. Other-than-temporary impairments were $183 million in fiscal year 2015, compared with $106 million in fiscal year 2014. Net losses on derivatives increased due to losses on commodity contracts in fiscal year 2015 as compared to gains in fiscal year 2014, offset in part by lower losses on currency and equity contracts. For fiscal year 2015, other reflects recognized losses from certain joint ventures and divestitures.
INCOME TAXES
Fiscal year 2016 compared with fiscal year 2015
Our effective tax rate for fiscal years 2016 and 2015 was 15% and 34%, respectively. Our effective tax rate was lower than the U.S. federal statutory rate primarily due to earnings taxed at lower rates in foreign jurisdictions resulting from producing and distributing our products and services through our foreign regional operations centers in Ireland, Singapore, and Puerto Rico.
The decrease in our effective tax rate for fiscal year 2016 compared to fiscal year 2015 was primarily due to changes in the mix of our income before income taxes between the U.S. and foreign countries including the impact of net
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revenue deferrals related to sales of Windows 10, tax benefits from the adoption of the new accounting guidance relating to stock-based compensation, and distributions from foreign affiliates. The fiscal year 2015 effective tax rate included the tax impact of losses in foreign jurisdictions for which we may not realize a tax benefit, primarily as a result of impairment and restructuring charges.
The mix of income before income taxes between the U.S. and foreign countries impacted our effective tax rate as a result of the geographic distribution of, and customer demand for, our products and services. We supply our Windows PC operating system to customers through our U.S. regional operating center, while we supply the Microsoft Office system and our server products and tools to customers through our foreign regional operations centers. In fiscal year 2016, our U.S. loss before income taxes was $325 million and our foreign income before income taxes was $20.1 billion. Net revenue deferrals related to sales of Windows 10 negatively impacted our fiscal year 2016 U.S. loss before income taxes by $6.0 billion and foreign income before income taxes by $588 million. In fiscal year 2015, our U.S. income before income taxes was $7.4 billion and our foreign income before income taxes was $11.1 billion. Impairment, integration, and restructuring expense relating to our phone business decreased our fiscal year 2015 U.S income before income taxes by $1.1 billion and foreign income before income taxes by $8.9 billion.
On July 27, 2015, the U.S. Tax Court issued an opinion in Altera Corp. v. Commissioner related to the treatment of stock-based compensation expense in an intercompany cost-sharing arrangement. The IRSs decision to appeal on February 19, 2016 prolongs the uncertainty regarding the ultimate outcome of the Altera case, and we do not expect to adjust our consolidated financial statements until there is a final resolution of this case.
Tax contingencies and other income tax liabilities were $11.8 billion and $12.1 billion as of June 30, 2016 and 2015, respectively, and are included in other long-term liabilities. This decrease relates primarily to tax credits available for carryover and a partial settlement of the IRS audit for tax years 2007 to 2009, offset by increases relating to intercompany transfer pricing.
While we settled a portion of the IRS audit for tax years 2004 to 2006 during the third quarter of fiscal year 2011, and settled a portion of the IRS audit for tax years 2007 to 2009 during the first quarter of fiscal year 2016, we remain under audit for those years. In February 2012, the IRS withdrew its 2011 Revenue Agents Report for tax years 2004 to 2006 and reopened the audit phase of the examination. As of June 30, 2016, the primary unresolved issue relates to transfer pricing, which could have a significant impact on our consolidated financial statements if not resolved favorably. We believe our allowances for income tax contingencies are adequate. We have not received a proposed assessment for the unresolved issues and do not expect a final resolution of these issues in the next 12 months. Based on the information currently available, we do not anticipate a significant increase or decrease to our tax contingencies for these issues within the next 12 months. We also continue to be subject to examination by the IRS for tax years 2010 to 2016.
We are subject to income tax in many jurisdictions outside the U.S. Our operations in certain jurisdictions remain subject to examination for tax years 1996 to 2016, some of which are currently under audit by local tax authorities. The resolutions of these audits are not expected to be material to our consolidated financial statements.
Fiscal year 2015 compared with fiscal year 2014
Our effective tax rate for fiscal years 2015 and 2014 was 34% and 21%, respectively. The fiscal year 2015 effective rate increased by 13%, primarily due to goodwill and asset impairments and restructuring charges recorded in fiscal year 2015, most of which did not generate a tax benefit. Our effective tax rate was lower than the U.S. federal statutory rate primarily due to foreign earnings taxed at lower rates resulting from producing and distributing our products and services through our foreign regional operations centers in Ireland, Singapore, and Puerto Rico. In fiscal year 2015, this reduction was mostly offset by losses in foreign jurisdictions for which we may not realize a tax benefit, primarily as a result of impairment and restructuring charges.
Changes in the mix of income before income taxes between the U.S. and foreign countries impacted our effective tax rate as a result of the geographic distribution of, and customer demand for, our products and services. We supply our Windows PC operating system to customers through our U.S. regional operating center, while we supply
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the Microsoft Office system and our server products and tools to customers through our foreign regional operations centers. In fiscal years 2015 and 2014, our U.S. income before income taxes was $7.4 billion and $7.1 billion, respectively, and comprised 40% and 26%, respectively, of our income before income taxes. In fiscal years 2015 and 2014, our foreign income before income taxes was $11.1 billion and $20.7 billion, respectively, and comprised 60% and 74%, respectively, of our income before income taxes.
FINANCIAL CONDITION
Cash, Cash Equivalents, and Investments
Cash, cash equivalents, and short-term investments totaled $113.2 billion as of June 30, 2016, compared with $96.5 billion as of June 30, 2015. Equity and other investments were $10.4 billion as of June 30, 2016, compared with $12.1 billion as of June 30, 2015. Our short-term investments are primarily intended to facilitate liquidity and for capital preservation. They consist predominantly of highly liquid investment-grade fixed-income securities, diversified among industries and individual issuers. The investments are predominantly U.S. dollar-denominated securities, but also include foreign currency-denominated securities in order to diversify risk. Our fixed-income investments are exposed to interest rate risk and credit risk. The credit risk and average maturity of our fixed-income portfolio are managed to achieve economic returns that correlate to certain fixed-income indices. The settlement risk related to these investments is insignificant given that the short-term investments held are primarily highly liquid investment-grade fixed-income securities.
Of the cash, cash equivalents, and short-term investments as of June 30, 2016, $108.9 billion was held by our foreign subsidiaries and would be subject to material repatriation tax effects. The amount of cash, cash equivalents, and short-term investments held by foreign subsidiaries subject to other restrictions on the free flow of funds (primarily currency and other local regulatory) was $2.4 billion. As of June 30, 2016, approximately 83% of the cash equivalents and short-term investments held by our foreign subsidiaries were invested in U.S. government and agency securities, approximately 4% were invested in corporate notes and bonds of U.S. companies, and approximately 5% were invested in U.S. mortgage- and asset-backed securities, all of which are denominated in U.S. dollars. The remaining cash equivalents and short-term investments held by our foreign subsidiaries were invested in foreign securities.
Securities lending
We lend certain fixed-income and equity securities to increase investment returns. The loaned securities continue to be carried as investments on our consolidated balance sheets. Cash and/or security interests are received as collateral for the loaned securities with the amount determined based upon the underlying security lent and the creditworthiness of the borrower. Collateral received is recorded as an asset with a corresponding liability. Our securities lending payable balance was $294 million as of June 30, 2016. Our average and maximum securities lending payable balances for fiscal year 2016 were $361 million and $1.2 billion, respectively. Intra-year variances in the amount of securities loaned are mainly due to fluctuations in the demand for the securities.
Valuation
In general, and where applicable, we use quoted prices in active markets for identical assets or liabilities to determine the fair value of our financial instruments. This pricing methodology applies to our Level 1 investments, such as exchange-traded mutual funds, domestic and international equities, and U.S. government securities. If quoted prices in active markets for identical assets or liabilities are not available to determine fair value, then we use quoted prices for similar assets and liabilities or inputs other than the quoted prices that are observable either directly or indirectly. This pricing methodology applies to our Level 2 investments such as corporate notes and bonds, common and preferred stock, foreign government bonds, mortgage- and asset-backed securities, U.S. government and agency securities, and certificates of deposit. Level 3 investments are valued using internally developed models with unobservable inputs. Assets and liabilities measured at fair value on a recurring basis using unobservable inputs are an immaterial portion of our portfolio.
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A majority of our investments are priced by pricing vendors and are generally Level 1 or Level 2 investments as these vendors either provide a quoted market price in an active market or use observable inputs for their pricing without applying significant adjustments. Broker pricing is used mainly when a quoted price is not available, the investment is not priced by our pricing vendors, or when a broker price is more reflective of fair values in the market in which the investment trades. Our broker-priced investments are generally classified as Level 2 investments because the broker prices these investments based on similar assets without applying significant adjustments. In addition, all of our broker-priced investments have a sufficient level of trading volume to demonstrate that the fair values used are appropriate for these investments. Our fair value processes include controls that are designed to ensure appropriate fair values are recorded. These controls include model validation, review of key model inputs, analysis of period-over-period fluctuations, and independent recalculation of prices where appropriate.
Cash Flows
Fiscal year 2016 compared with fiscal year 2015
Cash flows from operations increased $3.7 billion to $33.3 billion during the fiscal year, mainly due to lower operating expenditures and a reduction in materials and production costs, offset in part by a decrease in cash received from customers. Cash used in financing decreased $1.3 billion to $8.4 billion, mainly due to a $4.6 billion increase in proceeds from issuances of debt, net of repayments, offset in part by a $1.5 billion increase in cash used for common stock repurchases and a $1.1 billion increase in dividends paid. Cash used in investing increased $949 million to $24.0 billion, mainly due to a $2.4 billion increase in cash used for additions to property and equipment and a $1.5 billion increase in cash used for net investment purchases, sales, and maturities, offset in part by a $2.3 billion decrease in cash used for acquisitions of companies, net of cash acquired, and purchases of intangibles and other assets.
Fiscal year 2015 compared with fiscal year 2014
Cash flows from operations decreased $2.8 billion to $29.7 billion, mainly due to an increase in materials and production costs in support of sales growth as well as payments related to restructuring charges and other changes in working capital, offset in part by increases in cash received from customers. Cash used in financing increased $1.0 billion to $9.7 billion, mainly due to a $7.1 billion increase in cash used for common stock repurchases, offset in part by a $6.7 billion increase in proceeds from issuances of debt, net of repayments. Cash used in investing increased $4.2 billion to $23.0 billion, mainly due to a $5.5 billion increase in cash used for net investment purchases, sales, and maturities, partially offset by a $2.2 billion decrease in cash used for acquisitions of companies, net of cash acquired, and purchases of intangible and other assets.
Debt
We issued debt to take advantage of favorable pricing and liquidity in the debt markets, reflecting our credit rating and the low interest rate environment. The proceeds of these issuances were or will be used for general corporate purposes, which may include, among other things, funding for working capital, capital expenditures, repurchases of capital stock, acquisitions, and repayment of existing debt. See Note 12 Debt of the Notes to Financial Statements (Part II, Item 8 of this Form 10-K) for further discussion.
Unearned Revenue
Unearned revenue as of June 30, 2016 was comprised mainly of unearned revenue from volume licensing programs. Unearned revenue from volume licensing programs represents customer billings for multi-year licensing arrangements paid for either at inception of the agreement or annually at the beginning of each coverage period and accounted for as subscriptions with revenue recognized ratably over the coverage period. Unearned revenue as of June 30, 2016 also included payments for: Windows 10 licenses; post-delivery support and consulting services to be performed in the future; Office 365 subscriptions; Xbox Live subscriptions; Microsoft Dynamics business solutions products; Skype prepaid credits and subscriptions; Bundled Offerings; and other offerings for which we have been paid in advance and earn the revenue when we provide the service or software, or otherwise meet the revenue recognition criteria.
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The following table outlines the expected future recognition of unearned revenue as of June 30, 2016:
| (In millions) | ||||
| Three Months Ending, |
||||
| September 30, 2016 |
$ | 10,194 | ||
| December 31, 2016 |
8,348 | |||
| March 31, 2017 |
5,868 | |||
| June 30, 2017 |
3,058 | |||
| Thereafter |
6,441 | |||
| Total |
$ | 33,909 | ||
Share Repurchases
On September 16, 2013, our Board of Directors approved a share repurchase program authorizing up to $40.0 billion in share repurchases. The share repurchase program became effective on October 1, 2013, has no expiration date, and may be suspended or discontinued at any time without notice. This share repurchase program replaced the share repurchase program that was announced on September 22, 2008 and expired on September 30, 2013. As of June 30, 2016, $7.1 billion remained of our $40.0 billion share repurchase program. While the program has no expiration date, we intend to complete it by December 31, 2016. All repurchases were made using cash resources.
During fiscal year 2016, we repurchased 294 million shares of Microsoft common stock for $14.8 billion under the share repurchase program approved by our Board of Directors on September 16, 2013. During fiscal year 2015, we repurchased 295 million shares of Microsoft common stock for $13.2 billion under the share repurchase program approved by our Board of Directors on September 16, 2013. During fiscal year 2014, we repurchased 175 million shares for $6.4 billion; 128 million shares were repurchased for $4.9 billion under the share repurchase program approved by our Board of Directors on September 16, 2013, and 47 million shares were repurchased for $1.5 billion under the share repurchase program that was announced on September 22, 2008 and expired September 30, 2013.
Dividends
See Note 18 Stockholders Equity of the Notes to Financial Statements (Part II, Item 8 of this Form 10-K) for further discussion.
Off-Balance Sheet Arrangements
We provide indemnifications of varying scope and size to certain customers against claims of intellectual property infringement made by third parties arising from the use of our products and certain other matters. Additionally, we have agreed to cover damages resulting from breaches of certain security and privacy commitments in our cloud business. In evaluating estimated losses on these indemnifications, we consider factors such as the degree of probability of an unfavorable outcome and our ability to make a reasonable estimate of the amount of loss. These obligations did not have a material impact on our consolidated financial statements during the periods presented.
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Contractual Obligations
The following table summarizes the payments due by fiscal year for our outstanding contractual obligations as of June 30, 2016:
| (In millions) | 2017 | 2018-2019 | 2020-2021 | Thereafter | Total | |||||||||||||||
| Long-term debt: (a) |
||||||||||||||||||||
| Principal payments |
$ | 0 | $ | 5,050 | $ | 5,250 | $ | 30,649 | $ | 40,949 | ||||||||||
| Interest payments |
1,289 | 2,547 | 2,324 | 16,836 | 22,996 | |||||||||||||||
| Construction commitments (b) |
1,809 | 162 | 0 | 0 | 1,971 | |||||||||||||||
| Operating leases (c) |
961 | 1,918 | 1,467 | 2,118 | 6,464 | |||||||||||||||
| Purchase commitments (d) |
13,214 | 1,102 | 758 | 4,004 | 19,078 | |||||||||||||||
| Other long-term liabilities (e) |
0 | 87 | 23 | 275 | 385 | |||||||||||||||
| Total contractual obligations |
$ | 17,273 | $ | 10,866 | $ | 9,822 | $ | 53,882 | $ | 91,843 | ||||||||||
| (a) | See Note 12 Debt of the Notes to Financial Statements (Part II, Item 8 of this Form 10-K). |
| (b) | These amounts represent commitments for the construction of buildings, building improvements, and leasehold improvements. |
| (c) | These amounts represent undiscounted future minimum rental commitments under noncancellable facilities leases. |
| (d) | These amounts represent purchase commitments, including all open purchase orders and all contracts that are take-or-pay contracts that are not presented as construction commitments above. |
| (e) | We have excluded long-term tax contingencies, other tax liabilities, deferred income taxes, and long-term pension liabilities of $13.0 billion from the amounts presented as the timing of these obligations is uncertain. We have also excluded unearned revenue and non-cash items. |
Other Planned Uses of Capital
In June 2016, we entered into a definitive agreement to acquire LinkedIn in an all-cash transaction valued at $26.2 billion, inclusive of LinkedIns net cash. We expect the acquisition will close in calendar year 2016, and we will finance the transaction primarily through the issuance of new debt.
We will continue to invest in sales, marketing, product support infrastructure, and existing and advanced areas of technology, as well as continue making acquisitions that align with our business strategy. Additions to property and equipment will continue, including new facilities, datacenters, and computer systems for research and development, sales and marketing, support, and administrative staff. We expect capital expenditures to increase in coming years in support of our productivity and platform strategy. We have operating leases for most U.S. and international sales and support offices and certain equipment. We have not engaged in any related party transactions or arrangements with unconsolidated entities or other persons that are reasonably likely to materially affect liquidity or the availability of capital resources.
Liquidity
We earn a significant amount of our operating income outside the U.S., which is deemed to be permanently reinvested in foreign jurisdictions. As a result, as discussed above under Cash, Cash Equivalents, and Investments, the majority of our cash, cash equivalents, and short-term investments are held by foreign subsidiaries. We currently do not intend nor foresee a need to repatriate these funds. We expect existing domestic cash, cash equivalents, short-term investments, cash flows from operations, and access to capital markets to continue to be sufficient to fund our domestic operating activities and cash commitments for investing and financing activities, such as regular quarterly dividends, debt maturities, and material capital expenditures, for at least the next 12 months and thereafter for the foreseeable future. In addition, we expect existing foreign cash, cash equivalents, short-term investments, and cash flows from operations to continue to be sufficient to fund our foreign operating activities and cash commitments for investing activities, such as material capital expenditures, for at least the next 12 months and thereafter for the foreseeable future.
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Should we require more capital in the U.S. than is generated by our operations domestically, for example to fund significant discretionary activities, such as business acquisitions and share repurchases, we could elect to repatriate future earnings from foreign jurisdictions or raise capital in the U.S. through debt or equity issuances. These alternatives could result in higher effective tax rates, increased interest expense, or dilution of our earnings. We have borrowed funds domestically and continue to believe we have the ability to do so at reasonable interest rates.
RECENT ACCOUNTING GUIDANCE
See Note 1 Accounting Policies of the Notes to Financial Statements (Part II, Item 8 of this Form 10-K) for further discussion.
APPLICATION OF CRITICAL ACCOUNTING POLICIES
Our consolidated financial statements and accompanying notes are prepared in accordance with U.S. GAAP. Preparing consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. These estimates and assumptions are affected by managements application of accounting policies. Critical accounting policies for us include revenue recognition, impairment of investment securities, goodwill, research and development costs, contingencies, income taxes, and inventories.
Revenue Recognition
Revenue recognition for multiple-element arrangements requires judgment to determine if multiple elements exist, whether elements can be accounted for as separate units of accounting, and if so, the fair value for each of the elements.
Judgment is also required to assess whether future releases of certain software represent new products or upgrades and enhancements to existing products. Certain volume licensing arrangements include a perpetual license for current products combined with rights to receive unspecified future versions of software products and are accounted for as subscriptions, with billings recorded as unearned revenue and recognized as revenue ratably over the coverage period.
Software updates are evaluated on a case-by-case basis to determine whether they meet the definition of an upgrade, which may require revenue to be deferred and recognized when the upgrade is delivered. If it is determined that implied post-contract customer support (PCS) is being provided, revenue from the arrangement is deferred and recognized over the implied PCS term. If updates are determined to not meet the definition of an upgrade, revenue is generally recognized as products are shipped or made available.
Microsoft enters into arrangements that can include various combinations of software, services, and hardware. Where elements are delivered over different periods of time, and when allowed under U.S. GAAP, revenue is allocated to the respective elements based on their relative selling prices at the inception of the arrangement, and revenue is recognized as each element is delivered. We use a hierarchy to determine the fair value to be used for allocating revenue to elements: (i) vendor-specific objective evidence of fair value (VSOE), (ii) third-party evidence, and (iii) best estimate of selling price (ESP). For software elements, we follow the industry-specific software guidance which only allows for the use of VSOE in establishing fair value. Generally, VSOE is the price charged when the deliverable is sold separately or the price established by management for a product that is not yet sold if it is probable that the price will not change before introduction into the marketplace. ESPs are established as best estimates of what the selling prices would be if the deliverables were sold regularly on a stand-alone basis. Our process for determining ESPs requires judgment and considers multiple factors that may vary over time depending upon the unique facts and circumstances related to each deliverable.
In January 2015, we announced Windows 10 would be free to all qualified existing users of Windows 7 and Windows 8.1. This offer differs from historical offers preceding the launch of new versions of Windows as it is being made
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available for free to existing users in addition to new customers after the offer announcement. We evaluated the nature and accounting treatment of the Windows 10 offer and determined that it represents a marketing and promotional activity, in part because the offer is being made available for free to existing users. As this is a marketing and promotional activity, revenue recognition of new sales of Windows 8 will continue to be recognized as delivered.
Customers purchasing a Windows 10 license will receive unspecified updates and upgrades over the life of their Windows 10 device at no additional cost. As these updates and upgrades will not be sold on a stand-alone basis, we are unable to establish VSOE. Accordingly, revenue from licenses of Windows 10 is recognized ratably over the estimated life of the related device, which ranges between two to four years.
We currently are evaluating the impact of the new standard related to revenue recognition, which we anticipate will have a material impact on our consolidated financial statements. See Note 1 Accounting Policies of the Notes to Financial Statements (Part II, Item 8 of this Form 10-K) for further discussion.
Impairment of Investment Securities
We review investments quarterly for indicators of other-than-temporary impairment. This determination requires significant judgment. In making this judgment, we employ a systematic methodology quarterly that considers available quantitative and qualitative evidence in evaluating potential impairment of our investments. If the cost of an investment exceeds its fair value, we evaluate, among other factors, general market conditions, credit quality of debt instrument issuers, the duration and extent to which the fair value is less than cost, and for equity securities, our intent and ability to hold, or plans to sell, the investment. For fixed-income securities, we also evaluate whether we have plans to sell the security or it is more likely than not that we will be required to sell the security before recovery. We also consider specific adverse conditions related to the financial health of and business outlook for the investee, including industry and sector performance, changes in technology, and operational and financing cash flow factors. Once a decline in fair value is determined to be other-than-temporary, an impairment charge is recorded to other income (expense), net and a new cost basis in the investment is established. If market, industry, and/or investee conditions deteriorate, we may incur future impairments.
Goodwill
We allocate goodwill to reporting units based on the reporting unit expected to benefit from the business combination. We evaluate our reporting units on an annual basis and, if necessary, reassign goodwill using a relative fair value allocation approach. Goodwill is tested for impairment at the reporting unit level (operating segment or one level below an operating segment) on an annual basis (May 1 for us) and between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value. These events or circumstances could include a significant change in the business climate, legal factors, operating performance indicators, competition, or sale or disposition of a significant portion of a reporting unit.
Application of the goodwill impairment test requires judgment, including the identification of reporting units, assignment of assets and liabilities to reporting units, assignment of goodwill to reporting units, and determination of the fair value of each reporting unit. The fair value of each reporting unit is estimated primarily through the use of a discounted cash flow methodology. This analysis requires significant judgments, including estimation of future cash flows, which is dependent on internal forecasts, estimation of the long-term rate of growth for our business, estimation of the useful life over which cash flows will occur, and determination of our weighted average cost of capital.
The estimates used to calculate the fair value of a reporting unit change from year to year based on operating results, market conditions, and other factors. Changes in these estimates and assumptions could materially affect the determination of fair value and goodwill impairment for each reporting unit.
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Research and Development Costs
Costs incurred internally in researching and developing a computer software product are charged to expense until technological feasibility has been established for the product. Once technological feasibility is established, all software costs are capitalized until the product is available for general release to customers. Judgment is required in determining when technological feasibility of a product is established. We have determined that technological feasibility for our software products is reached after all high-risk development issues have been resolved through coding and testing. Generally, this occurs shortly before the products are released to manufacturing. The amortization of these costs is included in cost of revenue over the estimated life of the products.
Legal and Other Contingencies
The outcomes of legal proceedings and claims brought against us are subject to significant uncertainty. An estimated loss from a loss contingency such as a legal proceeding or claim is accrued by a charge to income if it is probable that an asset has been impaired or a liability has been incurred and the amount of the loss can be reasonably estimated. In determining whether a loss should be accrued we evaluate, among other factors, the degree of probability of an unfavorable outcome and the ability to make a reasonable estimate of the amount of loss. Changes in these factors could materially impact our consolidated financial statements.
Income Taxes
The objectives of accounting for income taxes are to recognize the amount of taxes payable or refundable for the current year and deferred tax liabilities and assets for the future tax consequences of events that have been recognized in an entitys financial statements or tax returns. We recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. Accounting literature also provides guidance on derecognition of income tax assets and liabilities, classification of deferred income tax assets and liabilities, accounting for interest and penalties associated with tax positions, and income tax disclosures. Judgment is required in assessing the future tax consequences of events that have been recognized on our consolidated financial statements or tax returns. Variations in the actual outcome of these future tax consequences could materially impact our consolidated financial statements.
Inventories
Inventories are stated at average cost, subject to the lower of cost or market. Cost includes materials, labor, and manufacturing overhead related to the purchase and production of inventories. We regularly review inventory quantities on hand, future purchase commitments with our suppliers, and the estimated utility of our inventory. These reviews include analysis of demand forecasts, product life cycle status, product development plans, current sales levels, pricing strategy, and component cost trends. If our review indicates a reduction in utility below carrying value, we reduce our inventory to a new cost basis through a charge to cost of revenue.
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STATEMENT OF MANAGEMENTS RESPONSIBILITY FOR FINANCIAL STATEMENTS
Management is responsible for the preparation of the consolidated financial statements and related information that are presented in this report. The consolidated financial statements, which include amounts based on managements estimates and judgments, have been prepared in conformity with accounting principles generally accepted in the United States of America.
The Company designs and maintains accounting and internal control systems to provide reasonable assurance at reasonable cost that assets are safeguarded against loss from unauthorized use or disposition, and that the financial records are reliable for preparing consolidated financial statements and maintaining accountability for assets. These systems are augmented by written policies, an organizational structure providing division of responsibilities, careful selection and training of qualified personnel, and a program of internal audits.
The Company engaged Deloitte & Touche LLP, an independent registered public accounting firm, to audit and render an opinion on the consolidated financial statements and internal control over financial reporting in accordance with the standards of the Public Company Accounting Oversight Board (United States).
The Board of Directors, through its Audit Committee, consisting solely of independent directors of the Company, meets periodically with management, internal auditors, and our independent registered public accounting firm to ensure that each is meeting its responsibilities and to discuss matters concerning internal controls and financial reporting. Deloitte & Touche LLP and the internal auditors each have full and free access to the Audit Committee.
| Satya Nadella |
| Chief Executive Officer |
| Amy E. Hood |
| Executive Vice President and Chief Financial Officer |
| Frank H. Brod |
| Corporate Vice President, Finance and Administration; Chief Accounting Officer |
49
PART II
Item 7A


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Disney+ already gets its first update, adds new playback controls and a watchlist
by Jared PetersDisney+ had a pretty rocky launch, but Disney seems to have gotten things under control and now they’re working on getting the app up to snuff. They’re adding in some things that probably should’ve been available right away, but hey, better late than never, right?
One of the biggest changes includes the ability for Disney+ to remember you left off when you were last watching. If you’re going through a series, now you’ll be able to jump into the next unwatched episode instead of having to manually go figure out where you were. Again, seems like it should be a basic addition already, but we’re glad it’s here.
There’s also a new watchlist feature so you can queue up things you want to watch later instead of just trying to remember. That’s also almost a necessity considering the sheer amount of back content is in the Disney catalog.
Disney will undoubtedly keep adding things to their platform to really make it a true Netflix competitor. This is a small start, but a good one.
via: Android Community


Page maintained by Ke-Sen Huang.
If you have additions or changes, send an e-mail.
Information here is provided with the permission of the ACM.
Note that when possible I link to the page containing the link to the actual PDF or PS of the preprint.
I prefer this as it gives some context to the paper and avoids possible copyright problems with direct linking.
Thus you may need to search on the page to find the actual document.
ACM Digital Library: Proceedings of the 2008 symposium on Interactive 3D graphics and games
the ACM Digital Library (DOI) Link for the paper
the link of author version paper
the link of project page
Changelog
Navigation
- Safe 3D Navigation
-
George Fitzmaurice,
Justin Matejka,
Igor Mordatch,
Azam Khan,
Gordon Kurtenbach
- ViewCube: A 3D Orientation Indicator and Controller
-
Azam Khan,
Igor Mordatch,
George Fitzmaurice,
Justin Matejka,
Gordon Kurtenbach
- Large Document, Small Screen: A Camera Driven Scroll and Zoom Control for Mobile Devices
-
Jonathan Mooser,
Suya You,
Ulrich Neumann
Isosurface Rendering
- Real-Time Particle Isosurface Extraction
-
Ilya Rosenberg,
Ken Birdwell
- Interactive Volume Isosurface Rendering using BT Volumes
-
John Kloetzli,
Marc Olano,
Penny Rheingans
- Digital Inspection: An Interactive Stage for Viewing Surface Details
-
Daniel Aliaga
Physics
- Fast Collision Detection for Deformable Models using Representative-Triangles
-
Sean Curtis,
Rasmus Tamstorf,
Dinesh Manocha
- Instant Mesh Deformation
-
Fausto Blanco,
Manuel M. Oliveira
GPGPU
- Parallel White Noise Generation on a GPU via Cryptographic Hash
-
Stanley Tzeng,
Li-Yi Wei
- Computing Two-dimensional Delaunay Triangulation using Graphics Hardware
-
Guodong Rong,
Tiow-Seng Tan,
Thanh-Tung Cao, Stephanus
- Hardware-Aware Analysis and Optimization of Stable Fluids
-
Theodore Kim
Projection
- Fast Non-Linear Projections using Graphics Hardware
-
Jean-Dominique Gascuel,
Nicolas Holzschuch,
Gabriel Fournier,
Bernard Peroche
- The Epipolar Occlusion Camera
-
Paul Rosen,
Voicu Popescu
- Automatic Construction of 3D Models from Architectural Line Drawings
-
Sangwon Lee,
David Feng,
Bruce Gooch
AI + Crowds
- Simulating Interactions of Avatars in High Dimensional State Space
-
Hubert Shum,
Taku Komura,
Shuntaro Yamazaki
- Interactive navigation of multiple agents in crowded environments
-
Jur van den Berg,
Sachin Patil,
Jason Sewall,
Dinesh Manocha,
Ming Lin
- Polypostors: 2D Polygonal Impostors for 3D Crowds
-
Ladislav Kavan,
Simon Dobbyn,
Steven Collins,
Jiri Zara,
Carol O'Sullivan
Illumination
- Real-Time Sorting for Self Shadowing and Transparency in Hair Rendering
-
Erik Sintorn,
Ulf Assarsson
- Hierarchical Caustic Maps
-
Chris Wyman
- Interactive multiple anisotropic scattering in clouds
-
Antoine Bouthors,
Fabrice Neyret,
Nelson Max,
Eric Bruneton,
Cyril Crassin
Textures
- Maximum Mipmaps for Fast, Accurate, and Scalable Dynamic Height Field Rendering
-
Art Tevs,
I. Ihrke,
Hans-Peter Seidel
- Indirection Mapping for Quasi-Conformal Relief Mapping
-
Morgan McGuire,
Kyle Whitson
- Precise Vector Textures for Real-Time 3D Rendering
-
Zheng Qin,
Michael D. McCool,
Craig S. Kaplan
- Efficient high dynamic range texture compression
-
Kimmo Roimela,
Tomi Aarnio,
Joonas Itäranta
kesen.huang@gmail.com


SunGard provides software and processing solutions for financial services, education and the public sector. Come early! Beer and pizza being served starting at 6PM, and meetup starts at 7PM.


What features, functions, classes, methods, etc are tested by a unit test.
Assert whether a certain condition is true. The condition can be a simple boolean value, a promise that resolves a boolean value or another UnitTest
class or instance. When a unit test is provided, the unit test's run()
method will be called and awaited. The unit test's state after running will be evaluated.
A boolean value, promise with boolean result, child class of UnitTest
or instance of UnitTest
to be evaluated. Boolean values and promise results are treated as successful when they evaluate true
, unit tests are treated as successful when their state after running is UnitTestState.Successful
.
An optional description of the assertion being made.
Generated using TypeDoc
Abstract base class for unit tests.


A Data Science Project for INFO 370
Reddit is a platform for creating communities where users can post links, comments, images, news stories and more. The site is broken down in to subreddits, which are essentially interest groups that anyone can make. Once content has been submitted to a subreddit, others users can upvote posts they like or that are relevant, or they can downvote posts that do not add to discussion or that they do not like. What makes Reddit unique is that anyone can submit anything. As a result of this, the site has grown hugely over the past couple years, making it the 32nd most visited site globally and the 9th most visited site in the United States.
With Reddit being so high in popularity rankings, it naturally attracts traffic from all over the world. A Reddit profile is just a username with a post history. There is no email address required, no biography of the user, and no location. The aim of this project is to see if a user’s time zone can be predicted based on the time of their posting. If there are trends in the time of day that people tend to post to Reddit, it stands to reason that if one looks at the trends in a user’s posting history, one can determine what time zone the user is in.
Using Reddit's API, we scraped posts from different city subreddits such as r/Seattle and r/tokyo. We then graphed the posts by frequency per hour of a day. These graphs revealed different peak times due to the different times of the cities, which we then decided to analyze further. The analysis and results can be read about here.


@* * Copyright 2021 HM Revenue & Customs * * Licensed under the Apache License, Version 2.0 (the "License"); * you may not use this file except in compliance with the License. * You may obtain a copy of the License at * * http://www.apache.org/licenses/LICENSE-2.0 * * Unless required by applicable law or agreed to in writing, software * distributed under the License is distributed on an "AS IS" BASIS, * WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied. * See the License for the specific language governing permissions and * limitations under the License. *@ @import models._ @import uk.gov.hmrc.play.views.helpers._ @import views.html.helpers._ @import play.api.Application @import common.TaxDates @import config.ApplicationConfig @(calculationResult: TotalTaxOwedModel, taxYearModel: TaxYearModel, calculationType: String, disposalValue: BigDecimal, acquisitionValue: BigDecimal, totalCosts: BigDecimal, backUrl: String, flatGain: Option[BigDecimal] = None, reliefsUsed: BigDecimal = 0, showUserResearchPanel: Boolean)(implicit request: Request[_], messages: Messages, application: Application, applicationConfig: ApplicationConfig) @main_template(Messages("calc.summary.title"), isUserResearchBannerVisible = showUserResearchPanel){ @Messages("calc.base.back") @summaryPartial(calculationResult, taxYearModel, calculationType, disposalValue, acquisitionValue, totalCosts, flatGain, reliefsUsed)
@Messages("calc.summary.next.actions.text")


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So... How're You Doing?
It has been ten days since I started this blog. I’ve put together some words in a specific order in hopes to reach my potential audience. Some might call it preaching. But, is that all that I am doing? Am I just preaching? I jokingly put the tag “Let me grab my soapbox real fast” on the page listing my posts.
Line item number one: Applying for jobs.
Have I been? Have I applied? Have I put myself out there?
That’s a Texas size 10-4, good buddy - Wayne from Letterkenny
In fact, I had my first interview last Monday. I have a second interview scheduled. I may get the job, I may not. Time will tell, but that isn’t what’s important. What’s important is that I’ve been applying. Applying so much, that I got a bite! While I would love to get this job, I am beyond excited about the interview process. I am also terrified of the interview process. Why? Because I have no idea what all is going to happen. But, however this turns out, it’s a win. Even if I completely bomb this next interview. This is INVALUABLE experience. At least… that’s what I keep telling myself (I really want this job).
Line item number two: Staying Motivated
Have I been? Have I been getting stuff done? Have I found a way to motivate myself?
Yes and no. Let me explain.
Yes, I have been getting things done. Yes, I have been working on things and trying to learn new stuff. Yes, I’ve been keeping up with this blog and applying for jobs (see Line item number one).
Have I been efficient and maximized my time? No.
You’re probably asking yourself what I mean by being efficient. How do you efficiently keep yourself on track to learn a new skill?  You don’t, but you also don’t randomly browse the web for the best Old Fashioned Recipe, or youtube non-coding videos, or suddenly realizing you’ve been searching Amazon for “just the right gaming mouse” for the past hour when you were supposed to be reading about recursion or hash tables or how to handle a 504 error or any of the other stuff I need to keep sharp in my mind. So, what’s the next step? What can I do to fix this?
Schedule everything.
Sounds terrible right? It probably will be.  But, you know what it will do? It is going to start as an Action. That Action will eventually turn into a Habit. That Habit will eventually become part of my Character. And, finally, my Character will become my Destiny.
This new career path is my destiny. It is what is going to get me and my family where we want to be. I’ll be working on that schedule this week, and I will have a link to it in my next post.
So, until my next post, here is to taking Action.


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Varnish version 3.0.3 documentation
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The Varnish Reference Manual
¶
VCL
Varnish Configuration Language
DESCRIPTION
SYNTAX
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The family of random directors
The random director
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The round-robin director
The DNS director
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ACLs
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EXAMPLES
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varnish
Varnish Command Line Interface
DESCRIPTION
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varnishadm
Control a running varnish instance
SYNOPSIS
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varnishd
HTTP accelerator daemon
SYNOPSIS
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Hash Algorithms
Storage Types
Transient Storage
Management Interface
Run-Time Parameters
SEE ALSO
HISTORY
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varnishhist
Varnish request histogram
SYNOPSIS
DESCRIPTION
SEE ALSO
HISTORY
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varnishlog
Display Varnish logs
SYNOPSIS
DESCRIPTION
TAGS
EXAMPLES
SEE ALSO
HISTORY
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varnishncsa
Display Varnish logs in Apache / NCSA combined log format
SYNOPSIS
DESCRIPTION
SEE ALSO
HISTORY
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varnishreplay
HTTP traffic replay tool
SYNOPSIS
DESCRIPTION
SEE ALSO
HISTORY
COPYRIGHT
varnishsizes
Varnish object size request histogram
SYNOPSIS
DESCRIPTION
SEE ALSO
HISTORY
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varnishstat
Varnish Cache statistics
SYNOPSIS
DESCRIPTION
SEE ALSO
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varnishtest
Test program for Varnish
SYNOPSIS
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SCRIPTS
SEE ALSO
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varnishtop
Varnish log entry ranking
SYNOPSIS
DESCRIPTION
EXAMPLES
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Shared Memory Logging and Statistics
Allocations
Deallocations
VMOD - Varnish Modules
The vmod.vcc file
VCL and C data types
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vmod_std
Varnish Standard Module
SYNOPSIS
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FUNCTIONS
toupper
tolower
set_ip_tos
random
log
syslog
fileread
duration
integer
collect
SEE ALSO
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Shared Memory Logging
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OverrideFunc
— Just past default
Blog
Portfolio
About
Developer Story
Portfolio
Portfolio
Grow
Weave Mobile
Weave Schedule
Refer.io
WeVyte
Jive


Hey , you should learn Swift!
Hey , you should learn C++!
Hey , you should learn Python!
Hey , you should learn Ruby!
(I'm sorry you don't like pistachio...maybe you should just stick to Vanilla)
(Good news! People who like pistachio ice cream make excellent programmers)
(What? You don't like ice cream?)


Determines if the current runtime environment is a browser so that front-end modules can run on the server (Node) without throwing errors.
Array.prototype.includes()
on the typeof
values of both window
and document
(globals usually only available in a browser environment unless they were explicitly defined), which will return true
if one of them is undefined
.typeof
allows globals to be checked for existence without throwing a ReferenceError
.undefined
, then the current environment is assumed to be a browser.


{% extends "home.html" %} {% load staticfiles %} {% load crispy_forms_tags %} {% block content %}
A VSLI data set is a Very-large-scale integration. This is the study of how to position nodes in a integrated circuit board.102 TSP VLSI data sets studied at the Forschungsinstitut für Diskrete Mathematik, Universität Bonn. The instances in the VLSI collection range in size from 131 nodes to 744,710 nodes. In these puzzels, the cost of travel between cities is specified by the Eulidean distance rounded to the nearest whole number. We took some VSLI problems and ran the Backbone algorithm and nearest_neighbor on them with the goal of getting better results than the heuristic used in the Backbone algorithm.


» Welcome
Welcome to the "Plant Breeding and Biotechnology in Horticultural Species" Research Group (AGR-226) website at the Department of Plant Biology in the University of Málaga (Málaga, Spain). Here we will present who we are and the work we do.
Welcome to the "Plant Breeding and Biotechnology in Horticultural Species" Research Group (AGR-226) website at the Department of Plant Biology in the University of Málaga (Málaga, Spain). Here we will present who we are and the work we do.


|
Steam Audio API
2.0-beta.18
|
Functionality for calculating 3D panning and Ambisonics coefficients for a point source. More...
Functions | |
| IPLAPI IPLerror | iplCreatePanningEffect (IPLhandle renderer, IPLAudioFormat inputFormat, IPLAudioFormat outputFormat, IPLhandle *effect) |
| Creates a Panning Effect object. More... | |
| IPLAPI IPLvoid | iplDestroyPanningEffect (IPLhandle *effect) |
| Destroys a Panning Effect object. More... | |
| IPLAPI IPLvoid | iplApplyPanningEffect (IPLhandle effect, IPLhandle binauralRenderer, IPLAudioBuffer inputAudio, IPLVector3 direction, IPLAudioBuffer outputAudio) |
| Applies 3D panning to a buffer of audio data, using the configuration of a Panning Effect object. More... | |
| IPLAPI IPLvoid | iplFlushPanningEffect (IPLhandle effect) |
| Resets any internal state maintained by a Panning Effect object. More... | |
Functionality for calculating 3D panning and Ambisonics coefficients for a point source.
While this is useful for rendering point sources on surround speakers, the main advantage of Phonon's Panning Effect is that it can pan a point source and generate Ambisonics data.
| IPLAPI IPLerror iplCreatePanningEffect | ( | IPLhandle | renderer, |
| IPLAudioFormat | inputFormat, | ||
| IPLAudioFormat | outputFormat, | ||
| IPLhandle * | effect | ||
| ) |
Creates a Panning Effect object.
This can be used to render a point source on surround speakers, or using Ambisonics.
| renderer | Handle to a Binaural Renderer object. |
| inputFormat | The format of the audio buffers that will be passed as input to this effect. All subsequent calls to iplApplyPanningEffect for this effect object must use IPLAudioBuffer objects with the same format as specified here. The input format must not be Ambisonics. |
| outputFormat | The format of the audio buffers which will be used to retrieve the output from this effect. All subsequent calls to iplApplyPanningEffect for this effect object must use IPLAudioBuffer objects with the same format as specified here. Any valid audio format may be specified as the output format. |
| effect | [out] Handle to the created Panning Effect object. |
Destroys a Panning Effect object.
| effect | [in, out] Address of a handle to the Panning Effect object to destroy. |
| IPLAPI IPLvoid iplApplyPanningEffect | ( | IPLhandle | effect, |
| IPLhandle | binauralRenderer, | ||
| IPLAudioBuffer | inputAudio, | ||
| IPLVector3 | direction, | ||
| IPLAudioBuffer | outputAudio | ||
| ) |
Applies 3D panning to a buffer of audio data, using the configuration of a Panning Effect object.
The input audio is treated as emanating from a single point. If the input audio buffer contains more than one channel, it will automatically be downmixed to mono.
| effect | Handle to a Panning Effect object. |
| binauralRenderer | Handle to a Binaural Renderer object that should be used to apply the panning effect. |
| inputAudio | Audio buffer containing the data to render using 3D panning. The format of this buffer must match the inputFormat parameter passed to iplCreatePanningEffect . |
| direction | Unit vector from the listener to the point source, relative to the listener's coordinate system. |
| outputAudio | Audio buffer that should contain the rendered audio data. The format of this buffer must match the outputFormat parameter passed to iplCreatePanningEffect . |
Resets any internal state maintained by a Panning Effect object.
This is useful if the Panning Effect object is going to be disabled/unused for a few frames; resetting the internal state will prevent an audible glitch when the Panning Effect object is re-enabled at a later time.
| effect | Handle to a Panning Effect object. |


Module Name: SwitchModule
The Switch component allow's user to execute an action immediately.
All Angular Supported Events can be used on this component.


Alfa Romeo Giulia and Stelvio get updated interior and infotainment
by Matt de PrezAlfa Romeo has updated the Giulia and Stelvio with a new infotainment system and interior quality improvements, plus new driver assistance systems giving level two autonomy.
Externally the revised models look identical to the existing ones as Alfa Romeo decided not to mess with the positive attributes of both cars.
A new 8.8-inch centrally mounted display can now be controlled via touchscreen or using the re-designed rotary controller.
New software provides a neater layout and enables users to customise the displays to suit their requirements. Connected services are also planned to for roll-out next year.
A new seven-inch TFT screen in the centre of the instrument cluster is standard across both the Giulia and Stelvio ranges, providing more concise information to the driver.
Interior quality has been enhanced with a new central console, completely restyled to accommodate larger, more accessible storage compartments, as well as a new wireless charging pad.
The new gear stick is now leather clad with luminous highlights and a signature Italian flag at its base, while the leather steering wheel has also been restyled to accommodate the functions and sensors for the autonomous driving systems.
A suite of driver assistance systems includes lane keeping assist, active blind spot assist and traffic jam and highways assistant, in addition to active cruise control.
Revisions to the range structure see a simplified line-up of Super, Sprint, Lusso Ti and Veloce. Standard equipment has been enhanced across the range too, with all models now getting bi-xenon headlights.
Alfa Romeo has retained the existing powertrain options, which include a 2.0-litre petrol engine with 200PS or 280PS and a 2.2-litre turbodiesel engine with 190PS or 210PS.
The new Alfa Romeo Stelvio will be available to order from January 2020, with first cars arriving in the UK during January, with Giulia following later in Q1. Full UK pricing and specification will be announced in due course.