Microsoft to Report Charge Related to Settlement of Class Action Lawsuits

REDMOND, Wash., Nov. 20, 2001 — Microsoft Corp. today announced that it will record a pre-tax charge of approximately $550 million in the quarter ending Dec. 31, 2001, resulting from the settlement of more than 100 class action lawsuits.

The proposed settlement provides for a five-year program whereby Microsoft will provide cash, matching funds, software, training, and technical support to help make computer technology more accessible to over 12,500 public schools serving nearly 7 million of America’s most economically disadvantaged students.

On an after-tax basis, the settlement will result in a charge of approximately $375 million, which represents a $0.06 to $0.07 reduction in forecasted diluted earnings per share for the quarter ending Dec. 31, 2001.

Other than the settlement related charge, the Company is not providing any update to the financial guidance released on Oct. 18, 2001.

Founded in 1975, Microsoft (Nasdaq “MSFT”) is the worldwide leader in software, services and Internet technologies for personal and business computing. The company offers a wide range of products and services designed to empower people through great software — any time, any place and on any device.

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