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The mission of Microsoft Company as a business and the mission as a corporate citizen are one and the same: helping enable individuals and their communities to achieve their full potential. As a company, the optimism and passion for innovation are balanced with focus on creating real solutions for the tough challenges facing communities around the world. To help meet these challenges, last year Microsoft contributed nearly $ 264 million in cash and software to nonprofit organizations striving to improve lives and strengthen communities. By providing innovative technology to help remove obstacles and create opportunities, company affirms their belief in the ability of people to make the world a better place.
During 2003 the Company took steps to streamline and improving their own business. The company Information Worker segment was responsible for developing and delivering technologies that focus on improving productivity for information workers in corporations. It consists of the new Microsoft Office System of programs, servers, services, and solutions. Microsoft Office FrontPage 2003, and Microsoft Office Share Point Portal Server 2003. Microsoft Office has evolved from a suite of personal productivity products to a more comprehensive and integrated system of products for information work designed to increase personal, team, and organization productivity.
The Company Annual report consists of several parts. The first one represent a new researches and development during the year 2003. Using technology to deliver strategic advantage, continuing to innovate the personal computing experience, delivering software solutions for businesses of any size are the main marketing strategy of the company. From entertainment to interacting with the world around us, the home is center stage for the digital lifestyle. The revising segments of Company for fiscal year 2003 show that the main seven segments are: Client, Server and Tools, Information Worker, Microsoft Business Solutions, MSN, Mobile and Embedded Devices and Home and Entertainment.
According to the result the biggest segment is client which growth by 11 %. Shareholder letter remarks, that the year 2003 was a year of important and exciting innovations, reflected in many new Microsoft products that advance our mission of enabling people and businesses throughout the world to realize their full potential. During the year, the companys senior leadership refined strategy for achieving continued growth and success in the years ahead. The letter reports about new opportunities, plans and innovation. A great example of the kind of value we see in integrated innovation is Windows XP Tablet PC Edition.
Released last fall, it combines all the power of Windows XP with true mobility and advanced ink and speech tools for a more dynamic and flexible computing experience. Today, there are 40 computer makers that offer versions of the Tablet PC, and independent software vendors have created exciting applications for it. In the second part of Annual Report represented the main business strategy, which consists of products segment, the range of client, international operation, product development, manufacturing, marketing and competition. The main part of business plan it is analysis of fiscal condition and results of operations. Analyzing of net income shows that in 2003 it was increase on 73 % and state 9. 993 million dollars. As for operating income it is grew 11 % in fiscal 2003.
This growth reflected an increase of $ 3. 82 billion in revenue, partially offset by an increase of $ 2. 52 billion in operating expenses, primarily related to employee and related costs associated with additional headcount and increased legal settlement expenses. The revenue growth rate was 13 % in fiscal 2003. This growth was driven primarily by multi-year licensing that occurred before the transition to our new licensing program (Licensing 6. 0) in the first quarter of fiscal 2003. Besides that it also reflected a $ 933 million or 13 % increase associated with OEM licensing of Microsoft Windows operating systems and a $ 309 million or 23 % increase in revenue from Microsoft Xbox video game consoles. So, in 2002 fiscal year was consist 9360 mln dollars and in 2003 was 10394.
Client includes revenue from Windows XP Professional and Home, Windows 2000 Professional, and other standard Windows operating systems. In 2003, Client revenue growth was driven by OEM licensing revenue growth of $ 933 million and a 9 percentage point increase of the mix of the higher priced Windows Professional operating systems, the majority of which was in the OEM channel. Server and Tools revenue was $ 5. 84 billion, $ 6. 16 billion, and $ 7. 14 billion in 2001, 2002, and 2003. Approximately 25 %, and 28 % of revenue was collected in foreign currencies during 2002, and 2003. Had the rates from fiscal 2002 been in effect in fiscal 2003, translated international revenue billed in local currencies would have been approximately $ 700 million loon of international revenue is hedged, thus offsetting a portion of the translation exposure. The financial statements and accompanying notes are prepared in accordance with U.
S. GAAP. Preparing 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, and impairment of goodwill, accounting for research and development costs, accounting for legal contingencies, and accounting for income taxes. The company policy exposed to foreign currency, interest rate, and fixed income and equity price risks.
A portion of these risks is hedged, but fluctuations could impact our results of operations and financial position. Company hedges a portion of anticipated revenue and accounts receivable exposure to foreign currency fluctuations, primarily with option contracts. The officers monitor foreign currency exposures daily to maximize the overall effectiveness of foreign currency hedge positions. Principal currencies hedged include the Euro, Japanese yen, British pound, and Canadian dollar. Fixed income securities are subject to interest rate risk. The portfolio is diversified and structured to minimize credit risk.
We can see a lot of financial tables and comments as a big part of these annual reports. It helps to see the real fiscal situation in the Company, the main strength and opportunities. At the end of this report represents independents auditors report: In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of Microsoft Corporation and subsidiaries as of June 30, 2002 and 2003, and the results of their operations and their cash flows for each of the three years in the period ended June 30, 2003 in conformity with accounting principles generally accepted in the United States of America And after that it is a list of all Microsoft representative office, all directors and officers and investor relation. So, for the year ahead the company has six things it will do: Provide breakthrough, high-quality integrated innovation; Deliver best-in-class responsiveness to customers; Make our platform the best for developers; Deliver simple, high-value experiences and services; Ignite customer enthusiasm and tell the Microsoft story; and Build our talent pool and increase productivity.
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