Microsoft Announces Strong Quarterly Revenue and Income

(All prior share and per share amounts have been restated to reflect the two-for-one stock split in March 1999.)

REDMOND, Wash. —
, April 20, 1999 — Microsoft Corp. today announced net income of $1.92 billion and diluted earnings per share of $0.35 for the quarter ended March 31, 1999, a 40 percent increase over the $0.25 diluted earnings per share reported for the corresponding quarter last year. Revenue totaled $4.33 billion, a 15 percent increase over the $3.77 billion for the comparable quarter last year.

Reported revenue does not include unearned revenue of $400 million related to the Microsoft â Office 2000 Technology Guarantee, which will be recognized in coming quarters, as required by generally accepted accounting principles. The Company also realized investment gains of more than $350 million during the quarter.


Microsoft had solid performance across all product lines, but the brightest spots were the continued migration to Windows NT âWorkstation, strong demand for Office despite the impending upgrade, and the strength of our server applications. Results in Asia were also much improved,”
said Greg Maffei, chief financial officer.
“However, we remain guarded about growth in 1999, given the likelihood that organizations will lock down their systems infrastructures due to year 2000 concerns.”


Microsoft SQL Server
™7.0 is off to a fabulous start,”
said Paul Maritz, group vice president, Developer Group.
“Corporate customers and applications developers are choosing SQL Server 7.0 for their database server needs, and licenses of SQL Server increased more than 50 percent over the comparable quarter of the prior year.”

The English version of Microsoft Office 2000 was released to manufacturing in March, is shipping to volume license customers worldwide in April, and will be broadly available in the US retail channel on June 10. The latest version of the Company’s flagship productivity suite makes the Web work for users by streamlining the process of working with people and information, and introduces applications that intelligently repair themselves and adapt to personal usage patterns, making them easier to use and manage.

In March, Microsoft released the latest version of Internet Explorer, the award-winning browser technology. Microsoft Internet Explorer version 5 is the fastest full-featured browser available today and is the only browser to include IntelliSense â technology to make browsing the Web easier than ever. Internet Explorer 5 software provides an open platform for software vendors and Web content providers through its support for Web standards and rich extensibility options. Also integrated into Internet Explorer 5 is the Microsoft Windows Media
™
player, providing customers with easy access to the most compelling audio and video content on the Web.

Also in March, the Company announced a comprehensive strategy for e-commerce, including Microsoft BizTalk, a new cross-platform e-commerce XML-based framework enabling business-to-business commerce over the Internet. More than one million Internet sites already use Windows NT Server, according to an April NetCraft survey of Internet web sites. Windows NT Server is the platform for BizTalk Server, a forthcoming Microsoft product supporting the BizTalk framework. Also, a December Intelliquest study indicated that Windows NT Server is the leading intranet platform, running on 47 percent of corporate intranets.

Microsoft released the latest version of the Windows CE operating system for the Palm-size PC – the first to enable color – in February. Although similar in functionality to Palm-size PC software that is shipping in devices today, the color-enabled release of Windows CE for the Palm-size PC brings an unmatched clarity to device screens, increasing the readability on these compact, portable devices.

This press release contains statements that are forward-looking. These statements are based on current expectations that are subject to risks and uncertainties. Actual results will vary because of factors such as PC shipment growth

Founded in 1975, Microsoft (Nasdaq


MSFT

) is the worldwide leader in software for personal computers. The Company offers a wide range of products and services for business and personal use, each designed with the mission of making it easier and more enjoyable for people to take advantage of the full power of personal computing every day.

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Microsoft, IntelliSense, Windows, Windows Media, and Windows NT are either registered trademarks or trademarks of Microsoft Corp. in the United States and/or other countries.

Carla Lewis, Senior Director, Investor Relations (425) 936-3703

Caroline Boren, Waggener Edstrom, (425) 637-9097

If you are interested in viewing additional information on Microsoft, please visit the Microsoft Web page at

on Microsoft’s corporate information pages. Shareholder and financial information as well as today’s 2:30 p.m. PDT conference call with financial analysts is available at

.

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