From the Desk of Irwin Michael – July 22, 2016 Equity markets continued their upward trend this week as a number of companies reported strong earnings results. One of our holdings, Microsoft, reported impressive revenue and earnings. These results beat analysts’ expectations because of its strong commercial cloud software business and growth in its Xbox and Microsoft Office 365 segments. CEO Satya Nadella’s transformational strategy is working successfully as the company continues to move its customers to its annuity based service. Microsoft’s new business model generates recurring and more predictable earnings and lowers its reliance on the declining PC business. Microsoft is free cash flowing, pays a 2.5% dividend yield, and has a significant share buyback plan. We were encouraged by Microsoft’s strong earnings results and expect the company’s business model to produce improved business results into the future. Irwin A. Michael, President I.A. Michael Investment Counsel Ltd.