Microsoft Corporation

General Company Information

Address One Microsoft Way Redmond, WA 98052-6399 United States Phone: 425 882-8080 Fax: 425 936-7329

Country United States

Ticker MSFT

Date of Incorporation June 1981 , WA, United States

Number of Employees 89,000 (Approximate Full-Time as of 06/30/2010)

Number of Shareholders 138,568 (record) (as of 07/20/2010)

Company Website www.microsoft.com

Annual Meeting Date In November

Mergent Dividend Achiever No

Closing Price As of 02/18/2011 : 27.06

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Business Description

Industry Internet & Software

NAICS Primary NAICS: 511210 - Software Publishers

Secondary NAICS: 334119 - Other Computer Peripheral Equipment Manufacturing 423430 - Computer and Computer Peripheral Equipment and Software Merchant Wholesalers 541519 - Other Computer Related Services

SIC Primary SIC: 7372 - Prepackaged software

Secondary SIC: 3577 - Computer peripheral equipment, nec 7379 - Computer related services, nec

Business Description Microsoft is engaged in developing, manufacturing, licensing, and supporting a range of software products and services for several computing devices. Co.'s software products and services include operating systems for personal computers, servers, and intelligent devices; server applications for distributed computing environments; information worker productivity applications; business and computing applications; software development tools; and video games. Co. also provides consulting and product and application support services, as well as trains and certifies computer system integrators and developers. In addition, Co. designs and sells hardware including the Xbox 360 gaming and entertainment console and accessories, the Zune digital music and entertainment device and accessories, and Microsoft personal computer (PC) hardware products. Co. operates through five segments.

The Windows & Windows Live segment offerings consist of Windows operating systems, including Windows 7, and online software and services through Windows Live. Windows Live primarily generates revenue from online advertising. The Server and Tools segment provides product and service such as Windows Server, Microsoft SQL Server, Windows Azure and other cloud and server offerings. The Server and Tools segment also provides Enterprise Services, which comprise Premier product support services and Microsoft Consulting Services. The Online Services segment consists of an online advertising platform with offerings for both publishers and advertisers, online information offerings, such as Bing, and the MSN portals and channels around the world. The Microsoft Business segment provides offerings such as Microsoft Office, SharePoint, and Microsoft Dynamics business applications. The Entertainment and Devices Division segment provides applications such as the Xbox 360 platform, the Zune digital music and entertainment platform, PC software games, online games and services, Mediaroom (Co.'s Internet protocol television software), Windows Phone, Windows Embedded device platforms, application software for Apple's Macintosh computers, and Microsoft PC hardware products.

Geographic Analysis

Revenues Report Date 06/30/2010

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Report Date 06/30/2010 Currency USD Scale Thousands United States 36,173,000 Other Countries 26,311,000 Total 62,484,000

Report Date 06/30/2009 Currency USD Scale Thousands United States 33,052,000 Other Countries 25,385,000 Total 58,437,000

Report Date 06/30/2008 Currency USD Scale Thousands United States 35,928,000 Other Countries 24,492,000 Total 60,420,000

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Business Summary

Microsoft develops, manufactures, licenses, and supports software products and services for computing devices. Co.'s software products and services include operating systems for personal computers, servers, and intelligent devices; server applications; information worker productivity applications; business applications; computing applications; and video games. In addition, Co. provides consulting and support services, and trains and certifies computer system integrators and developers, as well as designs and sells hardware. Co.'s five segments are: Windows & Windows Live Division; Server and Tools; Online Services Division; Microsoft Business Division; and Entertainment and Devices Division.

Executives

Top 5 Executives Officers William H. Gates Title : Chairman

Compensation History

Year Values in USD 2006 2005 2004 Salary 616,667 600,000 591,667 Bonus 350,000 400,000 310,000 Other Annual Compensation/Fees N/A N/A N/A Stock Awards N/A N/A N/A All Other Compensation 2,112 2,469 2,787 Total Compensation 968,779 1,002,469 904,454

Summary Biography William H. Gates, III, a Co-founder of Microsoft Corporation, has served as Chairman since its incorporation in 1981. Mr. Gates retired as an employee effective July 1, 2008, but continues to serve as Microsoft's Chairman, and serve as an Advisor on key development projects. Mr. Gates served as Chief Software Architect from January 2000 until June 2006, when he announced a two-year plan for his transition out of a day-to-day role. Mr. Gates served as Chief Executive Officer of Microsoft Corporation from 1981 until January 2000, when he resigned as Chief Executive Officer and assumed the position of Chief Software Architect. Mr. Gates is also a Director of Berkshire Hathaway Inc. He is a former Director of ICOS Corporation. His work overseeing the Bill and Melinda Gates Foundation provides ongoing global insights relevant to Microsoft¿s current and future business opportunities.

Steven A. Ballmer Title : Chief Executive Officer

Compensation History

Year Values in USD 2010 2009 2008 Salary 670,000 665,833 640,833 Bonus 670,000 600,000 700,000 All Other Compensation 11,121 10,794 10,001 Total Compensation 1,351,121 1,276,627 1,350,834

Summary Biography Steven A. Ballmer, was appointed Chief Executive Officer of Microsoft Corporation in January 2000, assuming full management responsibility for Microsoft Corporation, and has been a Director since 2000. Mr. Ballmer joined Microsoft in 1980 and was the first Business Manager hired by Mr. Gates. During the past 20 years, Mr. Ballmer has headed several

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Microsoft divisions, including operations, operating systems development, and sales and support. He served as President from July 1998 to February 2001. Previously, he had served as Executive Vice President, Sales and Support since February 1992. Mr. Ballmer graduated from Harvard University with a Bachelor's degree in Mathematics and Economics. After college, he worked for two years at Procter & Gamble Co. as an Assistant Product Manager and, before joining Microsoft, attended Stanford University Graduate School of Business.

Lisa E. Brummel Title : Senior Vice President

Summary Biography Lisa E. Brummel, was named Senior Vice President, Human Resources of Microsoft Corporation in December 2005. She had been Corporate Vice President, Human Resources of Microsoft since May 2005. From May 2000 to May 2005, she had been Corporate Vice President of the Home & Retail Division of Microsoft. Since joining Microsoft in 1989, Ms. Brummel has held a number of management positions at Microsoft, including General Manager of Consumer Productivity business, Product Unit Manager of the Kids Business, and Product Unit Manager of Desktop and Decision reference products. Before joining Microsoft in 1989, Ms. Brummel held various sales management and marketing positions with Prentice Hall Inc. publishing company. Ms. Brummel holds a Master's degree in Business Administration from the University of California, Los Angeles, and a Bachelor of Arts degree in Sociology from Yale University. She is active in charitable ventures associated with Hopelink community services, the University of Washington Medical Center, Yale University, the Human Rights Campaign and the Women's Funding Alliance.

Richard F. Rashid Title : Senior Vice President

Summary Biography Dr. Richard (Rick) Rashid, Ph.D., has served as Senior Vice President, Research of Microsoft Corporation since 2000. Dr. Rashid oversees worldwide operations for Microsoft Research. After joining Microsoft in September 1991, Dr. Rashid served as Director and Vice President of the Microsoft Research division and was promoted to his current role in 2000. Before joining Microsoft, Dr. Rashid was a Professor of Computer Science at Carnegie Mellon University (CMU). Dr. Rashid's research interests have focused on artificial intelligence, operating systems, networking and multiprocessors. He has participated in the design and implementation of the University of Rochester's Rochester Intelligent Gateway operating system, the Rochester Virtual Terminal Management System, the CMU Distributed Sensor Network Testbed, and CMU's SPICE distributed personal computing environment. He also co-developed of one of the earliest networked computer games, "Alto Trek," during the mid-1970s. Dr. Rashid is a Member of the National Science Foundation Computer Directorate Advisory Committee and a past Member of the Defense Advanced Research Projects Agency UNIX Steering Committee and the Computer Science Network Executive Committee. He is also a former Chairman of the Association for Computing Machinery Software System Awards Committee. Dr. Rashid received a Master of Science (1977) and Doctoral (1980) degrees in Computer Science from the University of Rochester. He graduated with honors in Mathematics and Comparative Literature from Stanford University in 1974.

Eric D. Rudder Title : Senior Vice President

Summary Biography Eric D. Rudder, has served as Senior Vice President, Technical Strategy of Microsoft Corporation, since September 2005. Mr. Rudder focuses on some of Microsoft 's key advanced development efforts as well as overall technical strategy. Mr. Rudder most recently served since June 2003, as Senior Vice President of Servers and Tools, and was also responsible for leading the company's outreach to the developer community. Prior to leading the Developer and Platform Evangelism Division, he was Vice President of Technical Strategy working directly with Chairman and Chief Software Architect Bill Gates on Microsoft's

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technical planning processes. He also has worked in several other areas at Microsoft, including networking, operating systems and developer tools, where he previously served as General Manager for Visual Studio. Mr. Rudder joined Microsoft Corporation in 1988. Mr. Rudder graduated with honors from Brown University in 1988.

Directors William H. Gates Title : Chairman

Compensation History

Year Values in USD 2006 2005 2004 Salary 616,667 600,000 591,667 Bonus 350,000 400,000 310,000 Other Annual Compensation/Fees N/A N/A N/A Stock Awards N/A N/A N/A All Other Compensation 2,112 2,469 2,787 Total Compensation 968,779 1,002,469 904,454

Summary Biography William H. Gates, III, a Co-founder of Microsoft Corporation, has served as Chairman since its incorporation in 1981. Mr. Gates retired as an employee effective July 1, 2008, but continues to serve as Microsoft's Chairman, and serve as an Advisor on key development projects. Mr. Gates served as Chief Software Architect from January 2000 until June 2006, when he announced a two-year plan for his transition out of a day-to-day role. Mr. Gates served as Chief Executive Officer of Microsoft Corporation from 1981 until January 2000, when he resigned as Chief Executive Officer and assumed the position of Chief Software Architect. Mr. Gates is also a Director of Berkshire Hathaway Inc. He is a former Director of ICOS Corporation. His work overseeing the Bill and Melinda Gates Foundation provides ongoing global insights relevant to Microsoft¿s current and future business opportunities.

Raymond V. Gilmartin Title : Lead Director

Compensation History

Year Values in USD 2010 2009 2008 Other Annual Compensation/Fees 90,000 90,015 45,000 Stock Awards 120,000 120,005 60,000 Total Compensation 210,000 210,020 105,000

Summary Biography Raymond V. Gilmartin, has been a Professor of Management Practice at the Harvard Business School since July 2006, teaching in the MBA program. Mr. Gilmartin has been a Director of Microsoft Corporation since April 2001, and serves as its Lead Independent Director. He has been a Director of General Mills, Inc. since 1997. He is the former Chairman, President and Chief Executive Officer of Merck & Company, Inc., a pharmaceutical company, and served in that capacity from 1994 to May 2005. He served as Special Advisor to the Executive Committee of the Board of Merck from 2005 to April 2006. He previously served as Chairman, President and Chief Executive Officer of Becton Dickinson and Company, a medical technology company. Mr. Gilmartin received a B.S. in Electrical Engineering from Union College in 1963 and an M.B.A. from Harvard Business School in 1968.

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Steven A. Ballmer

Compensation History

Year Values in USD 2010 2009 2008 Salary 670,000 665,833 640,833 Bonus 670,000 600,000 700,000 All Other Compensation 11,121 10,794 10,001 Total Compensation 1,351,121 1,276,627 1,350,834

Summary Biography Steven A. Ballmer, was appointed Chief Executive Officer of Microsoft Corporation in January 2000, assuming full management responsibility for Microsoft Corporation, and has been a Director since 2000. Mr. Ballmer joined Microsoft in 1980 and was the first Business Manager hired by Mr. Gates. During the past 20 years, Mr. Ballmer has headed several Microsoft divisions, including operations, operating systems development, and sales and support. He served as President from July 1998 to February 2001. Previously, he had served as Executive Vice President, Sales and Support since February 1992. Mr. Ballmer graduated from Harvard University with a Bachelor's degree in Mathematics and Economics. After college, he worked for two years at Procter & Gamble Co. as an Assistant Product Manager and, before joining Microsoft, attended Stanford University Graduate School of Business.

Dina Dublon

Compensation History

Year Values in USD 2010 2009 2008 Other Annual Compensation/Fees 100,000 100,000 50,000 Stock Awards 120,000 120,000 60,000 Total Compensation 220,000 220,000 110,000

Summary Biography Dina Dublon, has been a Director of Microsoft Corporation since March 22, 2005. Ms. Dublon served as Executive Vice President and Chief Financial Officer of JPMorgan Chase from December 1998 until her retirement in September 2004. Ms. Dublon was responsible for the global financial management and reporting, related technology and operations, strategy and acquisitions, corporate treasury, investor relations and tax. She was involved in the negotiation and implementation of the mergers of Chemical Bank with Manufacturers Hanover, Chase, JPMorgan, and Bank One. Ms. Dublon joined Chemical Bank's capital markets group as a trainee on the trading floor in 1981. From 1981 to 1996, Ms. Dublon held positions in capital markets, asset liability management and investment banking. She became Corporate Treasurer in 1994 and Head of Corporate Planning in 1996. Prior to joining Chemical Bank, Ms. Dublon worked as a Research Associate for the Harvard Business School and as Regional Director, Securities Division at Bank Hapoalim in Israel. Ms. Dublon also serves on the board of directors of Accenture, Ltd., and PepsiCo, Inc. She is a Founding Board Member of Greenstone Media, and serves on the boards of Carnegie Mellon University, the Global Fund for Women and The Women's Commission for Refugee Women & Children. Ms. Dublon, born in Brazil, holds a Bachelor of Arts degree in Economics and Mathematics from the Hebrew University in Jerusalem and a Master of Science degree from the Business School at Carnegie Mellon University.

Reed Hastings

Compensation History

Year Values in USD 2010 2007 2009

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Year Values in USD 2010 2007 2009 Other Annual Compensation/Fees 80,000 60,000 N/A Stock Awards 120,000 90,000 200,000 Total Compensation 200,000 150,000 200,000

Summary Biography Reed Hastings, has been a Director of Microsoft Corporation since March 26, 2007. Mr. Hastings founded Netflix, Inc. in 1997, and has served as Chairman of Netflix from its inception. Mr. Hastings became Chief Executive Officer of Netflix in September 1998. Prior to joining Netflix, Mr. Hastings served as Founder, Chief Executive Officer, and Chairman of Pure Atria Software, a maker of software development tools, from October 1991, until it was acquired by Rational Software Corporation in August 1997. He holds several patents in the areas of data processing and software development. Mr. Hastings is an active educational philanthropist and board member of various charitable organizations. Mr. Hastings received a B.A. from Bowdoin College in 1983, and an MSCS degree from Stanford University in 1988. Between Bowdoin and Stanford, Mr. Hastings served in the U.S. Peace Corps as a High School Math Teacher in Swaziland.

History

Incorporated in Washington in June 1981 as a successor to a partnership formed in 1975.

In Aug. 1987, Co. acquired Forethought Inc.

In May 1989, Co. acquired a minority interest in The Santa Cruz Operation, Inc. for $19,900,000.

In Sept. 1990, Co. formed Information Technology Integration Services.

In Mar. 1991, Co. acquired a 26% strategic share of Dorling Kindersley Ltd. As part of the agreement, the Microsoft Multimedia Publishing Group gains rights to license content from Dorling Kindersley book titles for use in future Microsoft multimedia software titles.

In June 1992, Co. merged with Fox Software Inc. of Perryburg, Ohio. Co. exchanged 2,000,000 shares for all outstanding stock of Fox.

In Dec. 1992, Co. opened Microsoft Czecho-Slovakia, a wholly-owned subsidiary in Eastern Europe.

In Jan. 1993, Co. opened a new wholly owned subsidiary, Microsoft A.O., in Moscow.

In May 1994, Co. acquired SOFTIMAGE Inc. for approx. $130,000,000.

In Nov. 1994, Co. acquired One Tree Software (Raleigh, NC).

In Jan. 1995, TCI Technology Ventures (TCI) a wholly-owned subsidiary of Tele-Communications, Inc. made a minority investment in the newly formed Microsoft Online Services Partnership (now The Microsoft Network LLC) which operates Co.'s online service, The Microsoft Network. TCI Technology Ventures invested $125,000,000 and acquired a 20% interest in MOSP. Co., the managing partner, holds 80% of MOSP.

In Feb. 1995, Co. acquired RenderMorphics Ltd. (London).

On July 10, 1995, Co. acquired intellectual-property rights of Network Managers (U.K.) Ltd.

On Nov. 6, 1995, Co. acquired the assets and expertise of Netwise Inc.

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In Dec. 1995, Co. acquired the Bruce Artwick Organization Ltd.

During 1996, Co. and National Broadcasting Company (NBC) established two MSNBC joint ventures: a 24-hour cable news and information channel and an interactive online news service. Co. agreed to pay $220 million over a five-year period for its interest in the cable venture, to pay one-half of operational funding of both joint ventures for a multiyear period, and to guarantee a portion of MSNBC debt. In Dec. 1999, Co. and and Global Crossing Ltd formed a joint venture to build a high capacity telecommunications network in Asia. The venture is called Asia Global Crossing. Global Crossing owns 93% of Asia Global Crossing. The company contributed its 58% stake in Pacific Crossing along with development rights to another network called East Asia Crossing. Global Crossing also plans to integrate its 50% share of Hutchison Global Crossing, a joint venture with Hong Kong's Hutchison Whampoa Ltd. Co. and Softbank contributed $175 million each for 3.5% stakes in Asia Global Crossing.In May 2000, Xerox Corporation and Microsoft Co. created a new company, ContentGuard Inc. Xerox will retain majority stake in ContentGuard Inc, formerly the Xerox Rights Management group.

In Jan. 1996, Co. acquired Vermeer Technologies Inc.

On Mar. 3, 1997, Co. acquired Interse Corp. Financial terms were not disclosed.

On June 10, 1997, Co. purchased 11.5% of Comcast Corp. for $1,000,000,000.

On June 16, 1997, Co. acquired Cooper & Peters Inc. Financial terms weren't disclosed.

On Aug.1, 1997, Co. acquired WebTV Networks, Inc. (WebTV) for $425,000,000 in stock and cash.

In Apr. 1998, Co. acquired The Mesa Group Inc. Details were not disclosed.

In Aug. 1998, Co. acquired Valence Research Incorporated.

In Aug. 1998, Co. sold a wholly-owned subsidiary, Softimage Inc. to Avid Technology, Inc. for $79,000,000 in cash and securities valued at $85,000,000.

In Nov. 1998, Co. acquired LinkExchange, Inc. for $265,000,000 in stock.

In Mar. 1999, Co. acquired CompareNet Inc. Financial terms of the transaction were not disclosed.

In Mar. 1999, Co. acquired Numinous Technologies Inc. for an undisclosed sum.

In May 1999, Co. purchased a 4.25% stake in Nextel Communications Inc. for $600,000,000.

In June 1999, Co. acquired ShadowFactor Software Inc.

In June 1999, Co. and Dell Computer Corp bought minority stakes in NaviSite Inc. Co. acquired a 4.4% stake in NaviSite. Terms were not available.

In July 1999, Co. acquired Zoomit Corp.

In July 1999, Co. acquired STNC Ltd.

In Sept. 1999, Co. acquired portions of Photo Access Corp.'s digital imaging intellectual property, as part of Co.'s development efforts in digital imaging. Terms of the agreement were not disclosed.

In Sept. 1999, Co.'s entertainment guide portion of MSN Sidewalk was acquired by Ticketmaster Online CitySearch. Under the terms, Co. will take an initial 9% stake in TMCS that could go as high as 13% with warrant exercise.

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In Nov. 1999, Co. acquired Entropic Inc.

In Dec. 1999, Co. and Global Crossing Ltd. formed a joint venture to build a high capacity telecommunications network in Asia. The venture is called Asia Global Crossing. Global Crossing owns 93% of Asia Global Crossing. The company contributed its 58% stake in Pacific Crossing along with development rights to another network called East Asia Crossing. Global Crossing also plans to integrate its 50% share of Hutchison Global Crossing, a joint venture with Hong Kong's Hutchison Whampoa Ltd. Co. and Softbank contributed $175 million each for 3.5% stakes in Asia Global Crossing.

On Jan. 10, 2000, Co. acquired Visio Corp. for approx. $1,500,000,000 in stock. Under terms of the acquisition Visio became Visio Division operating within Co.'s Business Productivity Group.

On Feb. 24, 2000, Co. sold its joint venture with DreamWorks SKG, DreamWorks Interactive, LLC, to Electronic Arts, Inc. Financial terms were not disclosed.

In Apr. 2000, Co. acquired MediaOne International's stake in TITUS Communications. Terms of the acquisition were not disclosed.

In May 2000, Xerox Corporation and Microsoft Co. created a new company, ContentGuard Inc. Xerox will retain majority stake in ContentGuard Inc, formerly the Xerox Rights Management group.

In June 2000, Co. acquired Bungie Software Corp. Take Two Interactive Software Inc. acquired all right, title and interest to select Bungie game properties, and sold its 19.9% equity interest in Bungie to Co.

On June 2, 2000, Co. acquired all of the assets of NetGames USA, Inc. for an aggregate of 37,530 of Co.'s common shares.

In July 2000, Co. acquired a 22.98% shareholding in Telewest Communications plc for approx. $2,600,000,000 in stock.

On Sept. 12, 2000, Co. issued an aggregate of 753,660 of its common shares pursuant to the acquisition by Co. of MongoMusic, Inc.

On Oct. 26, 2000, Co. issued an aggregate of 137,062 of its common shares pursuant to the acquisition by Co. of WebAppoint.com, Inc.

On Apr. 5, 2001, Co. acquired Great Plains Software, Inc. (Great Plains) for approx. $1,100,000,000 in stock. Under the terms of the acquisition, Great Plains became a division of Co.'s Product and Business Services Group.

On Apr. 11, 2001, Co. closed the acquisition of substantially all of the assets of iCommunicate Holding, Inc., a Delaware corporation. Promptly thereafter, Co. issued an aggregate of 272,093 of its common shares to iCommunicate, which were subsequently distributed to iCommunicate's eleven shareholders in the liquidation of iCommunicate.

On Nov. 5, 2001, Co. sold its interest in Wireless Knowledge Inc. (Wireless) to Wireless.

On Feb. 4, 2002, Co. sold its interest in Expedia, Inc. to USA Networks, Inc.

On July 11, 2002, Co. acquired Navision Software A/S (Navision). Co. purchased Navision's shares for approx. $1,450,000,000 (U.S.)/1,480,000,000 euros/10,970,000,000 Danish krones in stock and cash.

On Sept. 24, 2002, Co. acquired U.K.-based Rare Ltd. under a $375 million cash transaction.

On Dec. 12, 2002, Co. acquired Vicinity Corp, a provider of location-based technology and solutions, in a cash merger valued at approx. $96,000,000. Under the terms of the acquisition, Vicinity's business will be merged with Microsoft¿ MapPoint¿ Business Unit. As a result of the merger, Vicinity shareholders received $3.33 in cash in exchange for each share of Vicinity

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common stock they hold.

On Feb. 19, 2003, Co. acquired the Virtual Machine Business of Connectix Corp.

On Apr. 30, 2003, Co. acquired PlaceWare, Inc., a provider of Web conferencing services.

On Dec. 16, 2004, Co. acquired GIANT Company Software Inc. Terms of the acquisition were not announced.

On Nov. 2, 2005, Co. acquired media-streams.com AG, a software company based in Zurich, Switzerland.

On Mar. 10, 2005, Co. acquired Groove Networks, Inc. Financial terms of the acquisition were not disclosed.

On Mar. 15, 2005, Co., Time Warner Inc. and Thomson completed their three-way acquisition of ContentGuard, Inc. Each will hold an equal 33% voting positions in ContentGuard.

On June 21, 2005, Co. acquired Sybari Software Inc.

On July 11, 2005, Co. acquired 28% of Lang Chao International Ltd. for $25,000,000.

On Aug. 30, 2005, Co. acquired Teleo Inc.

On Aug. 31, 2005, Co. completed the acquisition of FrontBridge Technologies Inc.

On Sept. 19, 2005, Co. acquired Alacris Inc.

On Sept. 27, 2005, Co. acquired Chinasoft International Ltd. for $20,000,000 in cash.

On Nov. 3, 2005, Co. acquired FolderShare. Financial details of the acquisition were not disclosed.

On Nov. 3, 2005, Co. acquired Iomega Corp.'s ownership stake in ByteTaxi. Terms were not disclosed.

On Feb. 13, 2006, Co. announced the acquisition of MotionBridge.

On Mar. 7, 2006, Co. acquired the assets of Onfolio Inc., and Apptimum Inc.

On Apr. 6, 2006, Co., through its subsidiary, Microsoft Game Studios (MGS), purchased U.K.-based Lionhead Studios.

On May 23, 2006, CDC Software, a wholly owned subsidiary of CDC Corp., announced a strategic alliance with Co. to develop, market and deliver CRM enterprise applications to customers in the People's Republic of China.

On May 23, 2006, Co. and Alcatel announced the establishment of a global relationship with HP focused on the delivery of server solutions for carrier-class triple play/Internet Protocol Television deployments.

On July 11, 2006, Co. announced the launch of Windows Small Business Server 2003 R2 and unveiled new pricing details for the product.

On July 17, 2006, Co. has completed the acquisition of Softricity Inc., a leading provider of application virtualization and dynamic streaming technologies.

On July 18, 2006, Co. nced the availability of Microsoft(R) Solution for Windows(R)-based Hosting Version 4.0, which helps Web hosting providers rapidly launch new services; target developers of Web applications; and increase operational efficiency in their business through best practices, tools, scripts and code samples.

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On July 18, 2006, Co. acquired Winternals Software LP

On Aug. 23, 2006, Co. and Citrix Systems, Inc. announced they plan to expand their existing partnership in access and end-to-end application delivery to make computing faster, more secure and more cost-effective for employees in branch office locations.

On Oct. 11, 2006, Co. acquired privately owned Colloquis Inc., a provider of conversational online business solutions that feature natural language-processing technology.

On Oct. 12, 2006, Co. acquired Colloquis Inc.

On Nov. 7, 2006, Co. announced the Microsoft® SaaS On-Ramp Program, which provides independent software vendors (ISVs) with discounted software infrastructure and technical resources to help develop and deploy software as a service (SaaS) applications.

On Dec. 12, 2006, Co. opened a private beta of its new enterprise voice communications server, Microsoft(R) Office Communications Server 2007, to 2,500 IT professionals.

On Feb. 13, 2007, Co. announced the availability of the software development kit (SDK) for the Microsoft(R) .NET Micro Framework.

On Mar. 6, 2007, Co. announced that Microsoft(R) Forecaster 7.0, the latest release of the company's budgeting and planning software, will be released to manufacturing on March 28, 2007.

On Apr. 11, 2007, Co. and Education Networking Information Sharing and Analysis Center (REN-ISAC) formed new alliance to enhance network security information sharing with higher education institutions.

On May 3, 2007, Co. completed its acquisition of Tellme Networks Inc.

On June 25 2007, Co. teamed up with MasterCard Worldwide, Fedex Corporate Services and Bank of America Corp. to deliver comprehensive online resource for startup business.

In Aug. 2007, Co. acquired aQuantive, Inc., a digital marketing company, for approximately $6,000,000,000 in cash.

On Aug. 13, 2007, Co. acquired aQuantive Inc. for $5,373,600 in cash.

On Sept. 12, 2007, Co. and Sun Microsystems had expand its strategic alliance for further enable deployment of Windows Server on Sun X64 systems.

On Apr. 15, 2008, Co. acquired Danger, Inc. Terms of the transaction were not disclosed.

On Apr. 25, 2008, Co. acquired Fast Search & Transfer ASA for $1,192,300 in cash.

On June 18, 2008, Co. acquired Navic Networks. Terms of the transaction were not disclosed.

On Oct. 14, 2008, Co. acquired Greenfield Online, Inc. for $460,900,000 in cash.

On May 7, 2009, Co. acquired BigPark Inc. Terms of the transaction were not disclosed.

Institutional Holdings

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Total Institutions: 2,149 (UP) 1 Total Shares Held: 5,724,361,272 % of Shares Held: 58.41%

Changes In: New/Increased vs Old/Decreased Positions: (DOWN) -157 Amount of Shares Held: -194,603,981 % of shares held change: 0.01%

58.41% Held By Institutions

0.01% Shares Held Change

New Positions Increased Positions Closed Positions Decreased Positions Institutions: 38 Institutions: 924 Institutions: 86 Institutions: 1,033 Shares: 53,965,034 Shares: 2,722,254,612 Shares: 81,575,750 Shares: 2,889,247,877 % Change: 0.04% % Change: 0.00% % Change: 0.00% % Change: 0.00%

Unchanged Positions Institutions: 154 Shares: 58,893,749 % Change: 0.00%

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Institutional Ownership Summary for each of the top 5-10 Institutional Holders RENAISSANCE INVESTMENT GROUP LLC Total Shares Owned by Institution 22,566 Percentage of Shares Outstanding N/A Number of Institutions 85 Shares Purchased by Institution in the Last 3 Months 0 Shares Sold by Institution in the Last 3 Months 0 3 Months Net Transactions (Purchases-Sales) N/A Quarterly Stock Price Range N/A

Buyers/Sellers Summary 3 Months 6 Months Number of Inside Buyers 0 0 Number of Inside Sellers 0 0

CAPITAL RESEARCH GLOBAL INVESTORS Total Shares Owned by Institution 318,145,198 Percentage of Shares Outstanding N/A Number of Institutions 419 Shares Purchased by Institution in the Last 3 Months 0 Shares Sold by Institution in the Last 3 Months 0 3 Months Net Transactions (Purchases-Sales) N/A Quarterly Stock Price Range N/A

Buyers/Sellers Summary 3 Months 6 Months Number of Inside Buyers 0 0 Number of Inside Sellers 0 0

VANGUARD GROUP INC Total Shares Owned by Institution 291,767,905 Percentage of Shares Outstanding N/A Number of Institutions 3420

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Shares Purchased by Institution in the Last 3 Months 0 Shares Sold by Institution in the Last 3 Months 0 3 Months Net Transactions (Purchases-Sales) N/A Quarterly Stock Price Range N/A

Buyers/Sellers Summary 3 Months 6 Months Number of Inside Buyers 0 0 Number of Inside Sellers 0 0

STATE STREET CORP Total Shares Owned by Institution 274,374,928 Percentage of Shares Outstanding 99.05% Number of Institutions 3226 Shares Purchased by Institution in the Last 3 Months 0 Shares Sold by Institution in the Last 3 Months 0 3 Months Net Transactions (Purchases-Sales) N/A Quarterly Stock Price Range Time Period Low High Q1 of 2011 45.70 50.06 Q4 of 2010 37.54 47.77 Q3 of 2010 32.81 40.11 Q2 of 2010 33.82 48.07 Q1 of 2010 42.67 46.78

Buyers/Sellers Summary 3 Months 6 Months Number of Inside Buyers 0 0 Number of Inside Sellers 0 0

BARCLAYS GLOBAL INVESTORS NA /CA/ Total Shares Owned by Institution 205,908,848 Percentage of Shares Outstanding N/A Number of Institutions 3556 Shares Purchased by Institution in the Last 3 Months 0

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Shares Sold by Institution in the Last 3 Months 0 3 Months Net Transactions (Purchases-Sales) N/A Quarterly Stock Price Range N/A

Buyers/Sellers Summary 3 Months 6 Months Number of Inside Buyers 0 0 Number of Inside Sellers 0 0

CAPITAL WORLD INVESTORS Total Shares Owned by Institution 175,317,600 Percentage of Shares Outstanding N/A Number of Institutions 429 Shares Purchased by Institution in the Last 3 Months 0 Shares Sold by Institution in the Last 3 Months 0 3 Months Net Transactions (Purchases-Sales) N/A Quarterly Stock Price Range N/A

Buyers/Sellers Summary 3 Months 6 Months Number of Inside Buyers 0 0 Number of Inside Sellers 0 0

J P MORGAN CHASE & CO Total Shares Owned by Institution 119,898,606 Percentage of Shares Outstanding 99.47% Number of Institutions 2791 Shares Purchased by Institution in the Last 3 Months 0 Shares Sold by Institution in the Last 3 Months 0 3 Months Net Transactions (Purchases-Sales) N/A Quarterly Stock Price Range Time Period Low High Q1 of 2011 43.40 48.00 Q4 of 2010 36.96 42.67 Q3 of 2010 35.63 41.64

02/20/2011 16 Mergent, Inc. Microsoft Corporation

Time Period Low High Q2 of 2010 36.61 47.81 Q1 of 2010 37.70 45.02

Buyers/Sellers Summary 3 Months 6 Months Number of Inside Buyers 0 0 Number of Inside Sellers 0 0

BANK OF NEW YORK MELLON CORP Total Shares Owned by Institution 117,551,484 Percentage of Shares Outstanding 99.5% Number of Institutions 3656 Shares Purchased by Institution in the Last 3 Months 0 Shares Sold by Institution in the Last 3 Months 0 3 Months Net Transactions (Purchases-Sales) N/A Quarterly Stock Price Range Time Period Low High Q1 of 2011 30.63 32.37 Q4 of 2010 24.93 30.52 Q3 of 2010 24.16 26.85 Q2 of 2010 24.69 32.54 Q1 of 2010 26.86 31.35

Buyers/Sellers Summary 3 Months 6 Months Number of Inside Buyers 0 0 Number of Inside Sellers 0 0

NORTHERN TRUST CORP Total Shares Owned by Institution 107,341,135 Percentage of Shares Outstanding 99.05% Number of Institutions 3765 Shares Purchased by Institution in the Last 3 Months 0 Shares Sold by Institution in the Last 3 Months 0 3 Months Net Transactions (Purchases-Sales) N/A

02/20/2011 17 Mergent, Inc. Microsoft Corporation

Quarterly Stock Price Range Time Period Low High Q1 of 2011 51.69 56.55 Q4 of 2010 47.41 55.73 Q3 of 2010 45.81 50.50 Q2 of 2010 46.70 59.02 Q1 of 2010 49.89 55.98

Buyers/Sellers Summary 3 Months 6 Months Number of Inside Buyers 0 0 Number of Inside Sellers 0 0

INVESCO LTD Total Shares Owned by Institution 98,771,214 Percentage of Shares Outstanding 99.36% Number of Institutions 3560 Shares Purchased by Institution in the Last 3 Months 0 Shares Sold by Institution in the Last 3 Months 0 3 Months Net Transactions (Purchases-Sales) N/A Quarterly Stock Price Range Time Period Low High Q1 of 2011 23.77 27.42 Q4 of 2010 21.06 24.24 Q3 of 2010 16.63 21.90 Q2 of 2010 16.83 23.66 Q1 of 2010 18.32 23.63

Buyers/Sellers Summary 3 Months 6 Months Number of Inside Buyers 0 0 Number of Inside Sellers 0 0

Insider Holdings/Trades

Ownership Summary for each of the top 5-10 Insiders There is no Insider Holdings / Trades information for this company at present.

Dividends

Abbreviation Description Structure Type Exchange Ticker Market Cap Com Com Common NMS MSFT 227,368,456,920

02/20/2011 18 Mergent, Inc. Microsoft Corporation

Com (NMS: MSFT) Ticker Listed Outstanding Date Outstanding Par Amount MSFT NASDAQ National Market System 01/21/2011 8,402,382,031 0.00 USD

Stock Splits Split Date 1% 09/21/1987 1% 04/16/1990 3-for-2 06/27/1991 3-for-2 06/15/1992 2-for-1 05/23/1994 2-for-1 12/09/1996 2-for-1 02/23/1998 2-for-1 03/29/1999 2-for-1 02/18/2003

Issue Shares Outstanding Shares Outstanding Date Shares Outstanding File Date Report Date 01/21/2011 8,402,382,031 01/27/2011 12/31/2010 10/22/2010 8,555,523,242 10/28/2010 09/30/2010 07/20/2010 8,653,567,331 07/30/2010 06/30/2010 04/19/2010 8,763,839,329 04/22/2010 03/31/2010 01/25/2010 8,770,460,922 01/28/2010 12/31/2009 10/19/2009 8,879,121,378 10/23/2009 09/30/2009 07/27/2009 8,910,673,817 07/30/2009 06/30/2009 04/20/2009 8,899,720,022 04/23/2009 03/31/2009 01/20/2009 8,890,562,873 01/22/2009 12/31/2008 10/20/2008 8,895,572,720 10/23/2008 09/30/2008 07/28/2008 9,130,293,074 07/31/2008 06/30/2008 04/21/2008 9,313,292,833 04/24/2008 03/31/2008 01/21/2008 9,306,979,746 01/24/2008 12/31/2007 10/22/2007 9,355,438,912 10/25/2007 09/30/2007 08/01/2007 9,375,492,496 08/03/2007 06/30/2007 04/23/2007 9,566,808,383 04/26/2007 03/31/2007 01/22/2007 9,792,314,405 01/25/2007 12/31/2006 10/23/2006 9,830,460,093 10/26/2006 09/30/2006 08/18/2006 9,969,991,800 08/25/2006 06/30/2006 04/14/2006 10,201,202,877 04/27/2006 03/31/2006 01/23/2006 10,333,368,967 03/03/2006 12/31/2005 01/23/2006 10,333,368,967 01/26/2006 12/31/2005 09/30/2005 10,644,674,213 10/27/2005 09/30/2005 08/15/2005 10,712,706,028 08/26/2005 06/30/2005 03/31/2005 10,804,353,235 04/28/2005 03/31/2005 12/31/2004 10,880,222,153 01/27/2005 12/31/2004 10/31/2004 10,871,589,882 11/09/2004 09/30/2004 08/15/2004 10,872,704,667 09/01/2004 06/30/2004 04/23/2004 10,794,692,690 05/03/2004 03/31/2004 01/31/2004 10,794,392,603 02/06/2004 12/31/2003 10/31/2003 10,812,468,881 11/13/2003 09/30/2003 08/15/2003 10,813,984,831 09/05/2003 06/30/2003 04/30/2003 10,736,261,053 05/12/2003 03/31/2003 02/18/2003 10,701,385,302 02/18/2003 02/18/2003

02/20/2011 19 Mergent, Inc. Microsoft Corporation

Shares Outstanding Date Shares Outstanding File Date Report Date 12/31/2002 5,350,692,651 01/31/2003 12/31/2002 09/30/2002 5,346,449,872 11/14/2002 09/30/2002 07/31/2002 5,378,746,853 09/06/2002 06/30/2002 03/31/2002 5,415,462,752 04/30/2002 03/31/2002 02/28/2002 5,416,006,543 03/25/2002 09/30/2001 01/31/2002 5,415,221,834 09/30/2001 5,385,753,545 04/30/2001 5,382,101,906 01/31/2001 5,335,390,864 01/26/2001 5,330,000,000 10/31/2000 5,332,337,924 09/08/2000 5,355,376,816 10/31/1999 5,160,024,593 03/29/1999 4,816,000,000 03/29/1999 03/29/1999 06/30/1998 2,408,000,000

Recent Dividends Amount Record Date ExDiv Date Pay Date 0.16 12/15/2010 02/15/2011 03/10/2011 0.16 09/21/2010 11/16/2010 12/09/2010 0.13 06/16/2010 08/17/2010 09/09/2010 0.13 03/08/2010 05/18/2010 06/10/2010 0.13 12/09/2009 02/16/2010 03/11/2010 0.13 09/18/2009 11/17/2009 12/10/2009 0.13 06/10/2009 08/18/2009 09/10/2009 0.13 03/09/2009 05/19/2009 06/18/2009 0.13 12/10/2008 02/17/2009 03/12/2009 0.13 09/22/2008 11/18/2008 12/11/2008 0.11 06/11/2008 08/19/2008 09/11/2008 0.11 03/17/2008 05/13/2008 06/12/2008 0.11 12/19/2007 02/19/2008 03/13/2008 0.11 09/12/2007 11/13/2007 12/13/2007 0.10 06/27/2007 08/14/2007 09/13/2007 0.10 03/26/2007 05/15/2007 06/14/2007 0.10 12/20/2006 02/13/2007 03/08/2007 0.10 09/13/2006 11/14/2006 12/14/2006 0.09 06/22/2006 08/15/2006 09/14/2006 0.09 03/27/2006 05/15/2006 06/08/2006 0.09 12/14/2005 02/15/2006 03/09/2006

02/20/2011 20 Mergent, Inc. Microsoft Corporation

Long Term Debt

June 30, 2010, $5,000,000,000 (excluding current portion and including unamortized debt discount of $61,000,000) comprised of:

-- 01 -- $1,250,000,000 zero coupon convertible notes, due June 15, 2013.

-- 02 -- $3,750,000,000 notes, bearing interest at rates ranging from 2.95% to 5.20%, due from June 1, 2014 to June 1, 2039.

Line of Credit: In Nov. 2009, Co. replaced its $2,000,000,000 and $1,000,000,000 credit facilities with a $2,250,000,000 364-day credit facility, which expires on Nov. 5, 2010. This facility serves as a back-up for Co.'s commercial paper program. In June 2010, Co. reduced the size of its credit facility from $2,250,000,000 to $1,000,000,000 due to the reduction in commercial paper outstanding. As of June 30, 2010, Co. was in compliance with the financial covenant in the credit facility agreement, which requires a coverage ratio be maintained of at least three times earnings before interest, taxes, depreciation, and amortization to interest expense. No amounts were drawn against the credit facility during the year ended June 30, 2010.

Expanded Long Term Debt CUSIP Issuer Name Issue Description Ticker Coupon Maturity 594918203 MICROSOFT CORPORATION PFD SER A CONV EXCH PRIN MSFT 2.75 12/15/1999

CUSIP Active 594918203 No

Subsidiaries

SUBSIDIARY NAME PERCENT OWNED COUNTRY Subsidiaries

02/20/2011 21 Mergent, Inc. Microsoft Corporation

SUBSIDIARY NAME PERCENT OWNED COUNTRY Subsidiaries Microsoft Ireland Research 100% Ireland Microsoft Capital Group, LLC 100% United States Microsoft Global Finance 100% Ireland Microsoft Ireland Operations 100% Ireland Limited Microsoft Licensing, GP 100% United States Microsoft Online, Inc. 100% United States Microsoft Operations Pte Ltd 100% Singapore Microsoft Operations Puerto Rico, 100% Puerto Rico LLC Microsoft Regional Sales 100% United States Corporation MOL Corporation 100% United States

Property

Co. maintains its corporate offices consisting of approx. 15,000,000 sq. ft. of office space in King County, WA: 10,000,000 sq. ft. of owned space situated on approx. 500 acres of land Co. owns at its corporate campus in Redmond, WA and approx. 5,000,000 sq. ft. of space Co. leases. Co. owns approx. 2,000,000 sq. ft. of office and datacenter space domestically (outside of the Puget Sound corporate campus) and lease many sites domestically totaling approx. 4,000,000 sq. ft. of office and datacenter space. Co. occupies many sites internationally, totaling approx. 2,000,000 sq. ft. that is owned and approx. 9,000,000 sq. ft. that is leased. International facilities that Co. owns include its India Development Center in Hyderabad, India; the European Operations Center in Dublin, Ireland; a research and development campus in Shaghai, China; and facilities in Reading and Atherstone, U.K. Co.'s primary leased office spaces include the following locations: Beijing and Shanghai, China; Tokyo, Japan; Unterschleissheim, Germany; Paris, France; Dublin, Ireland; Bangalore, India; Reading, U.K.; Vedbaek, Denmark; and Mississauga, Canada. In addition to the above locations, Co. has a disk duplication and digital distribution facility in Humacao, Puerto Rico, a facility in Singapore for its Asia Pacific Operations Center and Regional headquarters, and various product development facilities, both domestically and internationally.

In addition, Co. owns 63 acres of undeveloped land in Issaquah, WA, that can accommodate approx. 1,000,000 sq. ft. of office space.

Principal Executive Offices One Microsoft Way Redmond, WA 98052-6399 United States

Competitors (USA)

Company Name Revenues Gross Margin Net Income EBITDA Hewlett-Packard Co 126,033,000,000 23.76 8,761,000,000 15,758,000,000 McKesson Corp. 108,702,000,000 5.22 1,263,000,000 2,177,000,000 International Business 95,758,000,000 45.72 13,425,000,000 23,440,000,000 Machines Corp. Apple Inc 65,225,000,000 39.38 14,013,000,000 19,256,000,000

02/20/2011 22 Mergent, Inc. Microsoft Corporation

Company Name Revenues Gross Margin Net Income EBITDA Microsoft Corporation 62,484,000,000 80.16 18,760,000,000 26,121,000,000 General Dynamics Corp. 32,466,000,000 18.20 2,624,000,000 4,516,000,000 Oracle Corp. 26,820,000,000 78.51 6,135,000,000 11,241,000,000 EMC Corp. (MA) 14,025,910,000 55.22 1,088,077,000 2,122,575,000 Pitney Bowes Inc 5,569,171,000 52.59 444,913,000 1,166,882,000 Unisys Corp. 4,597,700,000 24.72 189,300,000 786,900,000 CA Inc 4,353,000,000 87.16 771,000,000 1,492,000,000 Activision Blizzard, Inc. 4,279,000,000 46.09 113,000,000 57,000,000 Insight Enterprises Inc. 4,136,905,000 13.74 33,574,000 78,772,000 Adobe Systems, Inc. 3,800,000,000 89.38 774,680,000 1,156,599,000 Electronic Arts, Inc. 3,654,000,000 48.93 (677,000,000) (540,000,000) Intuit Inc 3,455,000,000 82.52 574,000,000 1,119,000,000 CACI International Inc. 3,149,131,000 29.90 106,515,000 208,682,000 Valassis Communications, Inc. 2,244,248,000 24.53 66,768,000 265,286,000 LSI Corp 2,219,159,000 38.01 (47,719,000) (70,571,000) Brocade Communications 2,094,363,000 58.94 118,852,000 260,898,000 Systems, Inc. VMWARE, Inc. 2,023,937,000 82.23 197,098,000 332,707,000 Plexus Corp. 2,013,393,000 10.28 89,533,000 138,742,000 McAfee Inc 1,927,332,000 74.76 173,420,000 394,300,000 BMC Software, Inc. 1,911,200,000 78.48 406,100,000 580,500,000 Xilinx, Inc. 1,833,554,000 63.36 357,484,000 481,665,000

Company Name Total Assets Total Liabilities PE Ratio Market Cap Employees Hewlett-Packard Co 124,503,000,000 84,054,000,000 13.5194 106,608 M 324,600 McKesson Corp. 28,189,000,000 20,657,000,000 17.8407 20,504 M 32,500 International Business 109,022,000,000 86,385,000,000 14.9991 204,791 M 437,776 Machines Corp. Apple Inc 75,183,000,000 27,392,000,000 23.1393 322,963 M 46,600 Microsoft Corporation 86,113,000,000 39,938,000,000 11.6638 227,368 M 89,000 General Dynamics Corp. 32,545,000,000 19,229,000,000 12.0169 29,112 M 90,000 Oracle Corp. 61,578,000,000 30,780,000,000 25.1343 170,166 M 105,000 EMC Corp. (MA) 26,812,003,000 11,262,121,000 34.8462 56,002 M 43,200 Pitney Bowes Inc 8,533,911,000 8,520,248,000 - 5,236 M 33,004 Unisys Corp. 2,956,900,000 4,225,200,000 9.5571 1,748 M 25,600 CA Inc 11,838,000,000 6,855,000,000 16.2645 12,858 M 13,800 Activision Blizzard, Inc. 13,742,000,000 2,986,000,000 36.9 13,351 M 7,000 Insight Enterprises Inc. 1,603,321,000 1,135,747,000 12.4626 848 M 4,898 Adobe Systems, Inc. 8,141,148,000 2,948,761,000 39.3222 17,862 M 9,117 Electronic Arts, Inc. 4,646,000,000 1,917,000,000 - 6,446 M 7,800 Intuit Inc 5,198,000,000 2,377,000,000 32.4012 16,807 M 7,700 CACI International Inc. 2,244,766,000 1,074,053,000 16.3278 1,787 M 13,100 Valassis Communications, Inc. 1,744,022,000 1,646,161,000 4.2257 1,519 M 7,440 LSI Corp 2,967,930,000 1,506,826,000 37.5 4,162 M 5,397 Brocade Communications 3,654,175,000 1,607,874,000 21.2667 2,977 M 4,651 Systems, Inc. VMWARE, Inc. 5,066,984,000 2,324,033,000 124.9859 10,152 M 7,100 Plexus Corp. 1,290,379,000 638,524,000 14.9817 1,330 M 8,700 McAfee Inc 3,963,186,000 1,845,648,000 42.7768 7,385 M 6,100 BMC Software, Inc. 4,137,600,000 2,749,900,000 20.6397 9,106 M 6,100

02/20/2011 23 Mergent, Inc. Microsoft Corporation

Company Name Total Assets Total Liabilities PE Ratio Market Cap Employees Xilinx, Inc. 3,184,318,000 1,063,848,000 15.7767 8,855 M 2,948

Company Name Share Price Hewlett-Packard Co 48.67 McKesson Corp. 80.64 International Business 164.84 Machines Corp. Apple Inc 350.56 Microsoft Corporation 27.06 General Dynamics Corp. 78.11 Oracle Corp. 33.68 EMC Corp. (MA) 27.18 Pitney Bowes Inc 25.75 Unisys Corp. 41.00 CA Inc 25.21 Activision Blizzard, Inc. 11.07 Insight Enterprises Inc. 18.32 Adobe Systems, Inc. 35.39 Electronic Arts, Inc. 19.28 Intuit Inc 54.11 CACI International Inc. 58.78 Valassis Communications, Inc. 30.59 LSI Corp 6.75 Brocade Communications 6.38 Systems, Inc. VMWARE, Inc. 88.74 Plexus Corp. 32.81 McAfee Inc 47.91 BMC Software, Inc. 50.98 Xilinx, Inc. 33.92

Earnings Estimates

Broker Summary Number of Analysts 35 Number of Buy Recommendations 9 Number of Hold Recommendations 0 Number of Sell Recommendations 0

Ratios and Statistics EPS Long-Term Growth 11.00 Forward P/E PEG

02/20/2011 24 Mergent, Inc. Microsoft Corporation

Average Target Price $32.33 Price Target Raised in the Past 4 Wks - 1 (DOWN) 2 (UP) 1 Price Target Lowered in the Past 4 Wks - 2

Consensus Estimates Summary 2008A 2009A 2010A Q12011E Q22011E Q32011E Q42011E 2011E Earnings Per Share 1.87 1.70 2.10 0.54 0.59 0.62 0.74 2.37 Revenue 60,420.00 58,437.00 62,484.00 16,050.00 17,204.50 17,162.53 20,156.09 68,086.50 EBITDA 25,965.00 23,161.00 26,771.00 6,900.59 7,430.00 7,409.95 9,196.43 29,357.50

2012E 2013E Earnings Per Share 2.63 2.90 Revenue 73,228.00 79,243.00 EBITDA 32,075.45 34,919.85

Earnings Estimates

Consensus Estimates Detailed Earnings Per Share 2008A 2009A 2010A Q12011E Q22011E Q32011E Q42011E 2011E 2012E 2013E High - - - 0.59 0.64 0.68 0.86 2.46 2.82 3.34 Median 1.87 1.70 2.10 0.54 0.59 0.62 0.74 2.37 2.63 2.90 Low - - - 0.50 0.54 0.50 0.69 2.05 2.42 2.71 Standard Deviation 0.01 0.02 0.03 0.02 0.03 0.04 0.04 0.08 0.10 0.20 # of Estimates 23 18 34 31 30 21 21 35 32 8

Dividend Per Share 2008A 2009A 2010A Q12011E Q22011E Q32011E Q42011E 2011E 2012E 2013E High - - - 0.16 0.16 0.19 0.19 0.64 0.76 0.64 Median 0.44 0.52 0.52 0.16 0.16 0.16 0.16 0.52 0.52 0.52 Low - - - 0.13 0.13 0.13 0.13 0.50 0.52 0.52 Standard Deviation 0.01 0.01 0.01 0.02 0.02 0.04 0.04 0.05 0.08 0.05 # of Estimates 7 4 10 3 3 2 2 11 10 5

Cash Flow Per Share 2008A 2009A 2010A Q12011E Q22011E Q32011E Q42011E 2011E 2012E 2013E High - - - 0.98 0.85 0.88 0.97 3.13 3.55 3.87 Median 2.28 2.12 2.70 0.89 0.71 0.77 0.80 2.89 3.32 3.43 Low - - - 0.65 0.57 0.58 0.71 2.34 2.98 3.15 Standard Deviation 0.12 0.10 0.17 0.12 0.11 0.13 0.13 0.24 0.20 0.36 # of Estimates 5 5 7 7 7 4 4 9 8 3

02/20/2011 25 Mergent, Inc. Microsoft Corporation

Sales 2008A 2009A 2010A Q12011E Q22011E Q32011E Q42011E 2011E High - - - 16,699.09 17,815.00 17,887.00 21,244.00 69,654.22 Median 60,420.00 58,437.00 62,484.00 16,050.00 17,204.50 17,162.53 20,156.09 68,086.50 Low - - - 15,097.00 15,943.80 16,307.00 18,779.00 65,126.00 Standard Deviation 134.03 332.95 233.92 348.11 411.76 413.86 698.69 948.22 # of Estimates 31 24 32 29 28 17 17 34

Sales 2012E 2013E High 76,193.52 81,401.20 Median 73,228.00 79,243.00 Low 68,810.00 76,016.71 Standard Deviation 1,766.47 1,932.89 # of Estimates 30 7

Operating Profit 2008A 2009A 2010A Q12011E Q22011E Q32011E Q42011E 2011E High - - - 6,838.00 7,172.00 7,379.00 9,300.00 28,139.00 Median 23,909.00 20,889.00 24,098.00 6,144.50 6,559.10 6,836.00 8,378.00 26,652.00 Low - - - 5,669.50 6,229.00 6,522.00 7,997.00 24,422.00 Standard Deviation 102.78 222.27 208.61 275.73 263.77 254.95 435.89 778.25 # of Estimates 13 16 28 26 25 15 15 31

Operating Profit 2012E 2013E High 31,075.00 24,519.00 Median 29,339.50 24,519.00 Low 26,238.25 24,519.00 Standard Deviation 1,221.29 0.00 # of Estimates 24 1

EBITDA 2008A 2009A 2010A Q12011E Q22011E Q32011E Q42011E 2011E High - - - 7,101.00 7,591.00 7,460.00 9,223.87 30,249.20 Median 25,965.00 23,161.00 26,771.00 6,900.59 7,430.00 7,409.95 9,196.43 29,357.50 Low - - - 6,549.00 6,985.00 7,359.90 9,169.00 27,288.00 Standard Deviation 331.46 236.19 416.61 207.33 264.56 70.78 38.80 890.18 # of Estimates 7 6 9 5 5 2 2 10

EBITDA 2012E 2013E High 32,864.00 36,720.40 Median 32,075.45 34,919.85 Low 28,691.31 32,262.66 Standard Deviation 1,466.01 1,784.30 # of Estimates 8 6

Net Debt 2008A 2009A 2010A Q12011E Q22011E Q32011E Q42011E High - - - -33,280.16 -33,845.46 -32,848.38 -33,955.60 Median 0.00 -330.00 -30,849.00 -44,066.00 -47,513.50 -47,382.00 -49,757.00 Low - - - -54,277.00 -58,310.00 -60,930.00 -64,069.00 Standard Deviation 3,448.21 4,389.60 5,857.34 8,655.45 10,419.52 14,043.69 15,062.84 # of Estimates 5 5 8 4 4 3 3

Net Debt 2011E 2012E 2013E High -33,845.46 -37,739.92 -43,823.28

02/20/2011 26 Mergent, Inc. Microsoft Corporation

Net Debt 2011E 2012E 2013E Median -44,022.00 -52,423.18 -63,111.00 Low -58,310.00 -73,926.00 -64,598.00 Standard Deviation 8,800.60 11,378.28 9,111.86 # of Estimates 9 8 5

Pre Tax Profit 2008A 2009A 2010A Q12011E Q22011E Q32011E Q42011E 2011E High - - - 7,238.00 7,322.00 7,600.00 9,800.00 29,200.00 Median 25,231.00 20,769.00 25,013.00 6,291.00 6,834.50 7,073.00 8,795.00 27,412.00 Low - - - 5,869.50 6,343.00 6,616.00 8,167.00 24,282.00 Standard Deviation 427.54 407.51 367.18 296.92 271.83 302.35 424.58 909.97 # of Estimates 15 13 30 27 26 17 17 34

Pre Tax Profit 2012E 2013E High 32,900.00 33,452.00 Median 30,237.50 32,533.78 Low 27,151.80 30,692.60 Standard Deviation 1,377.26 1,099.91 # of Estimates 28 6

Financial Highlights

Financial Highlights as of 06/30/2010 in USD Income Statement (In Thousands) Total Revenue 62,484,000 EBITDA 26,121,000 Operating Income 24,098,000 Net Income 18,760,000 Revenue per Share 7.09 EPS from Continuing Operations 2.10 EPS - Net Income - Diluted 2.10 Share Outstanding 8,668,000 Weighted Average Shares Outstanding - Diluted 8,813,000 Weighted Average Shares Outstanding - Basic 8,927,000 Earnings per Share - Basic 2.13 Balance Sheet (In Thousands) Total Assets 86,113,000 Current Assets 55,676,000 Total Liabilities 39,938,000 Long Term Debt 4,939,000 Stockholders' Equity 46,175,000 Total Assets per Share 9.93 Current Liabilities 26,147,000 Net Assets per Share 5.33 Cash Flow Statement (In Thousands) Cash from Operations 24,073,000 Cash from Investing (11,314,000) Cash from Financing (13,291,000) Capital Expenditures 1,977,000 Cash Flow per Share 2.70

02/20/2011 27 Mergent, Inc. Microsoft Corporation

Cash & Cash Equivalents, Beginning of Year 6,076,000 Cash & Cash Equivalents, End of Year 5,505,000 Stock Price and Valuation (Data as of 02/18/2011) Market Cap(mil) 227,368 Share Outstanding(000's) 8,402,382 PE Ratio 11.6638 Dividend Per Share(TTM) 0.58 Earning Per Share(TTM) 2.39 Last Closing Price 27.06 Previous Trading Day Range 26.99 - 27.21 52 Week Range 23.01 - 31.39 7 Day Average Closing Price 27.12 30 Day Average Closing Price 27.86 200 Day Average Closing Price 26.22 Beta 0.92 High Price Last 3 Mos. 28.87 Low Price Last 3 Mos. 25.12 Avg Daily Volume Last 3 Mos. 57,296,696.84

Management Effectiveness Revenue per Employee 702,067 Net Income per Employee 210,787 ROA % (Net) 22.88 ROE % (Net) 43.76 ROI % (Operating) 49.47 Profitability Ratios Gross Margin 80.16 Operating Margin 38.57 EBITDA Margin % 41.80 Calculated Tax Rate % 25.00 Profit Margin (TTM) 30.02 Valuation Ratios Price/Earnings (TTM) 10.80 Price/Book (TTM) 4.32 Price/Cash Flow(TTM) 8.42 Asset Management Total Asset Turnover 0.76 Receivables Turnover 5.16 Inventory Turnover 17.01 Property Plant & Equip Turnover 8.24 Cash & Equivalents Turnover 10.79 Debt Management Long Term Debt/Equity 0.11 Long Term Debt as % of Invested Capital 9.48 Total Debt/Equity 0.13 Accounts Payable Turnover 17.00 Accrued Expenses Turnover 19.41 Liquidity Indicators Quick Ratio 0.71 Current Ratio 2.13 Net Current Assets as % of Total Assets 34.29

02/20/2011 28 Mergent, Inc. Microsoft Corporation

Free Cash Flow per Share 2.51 Revenue to Assets 0.73 Consensus Estimates 2011Ae 2010Q3e 2010Q4e Earnings Per Share 2.37 0.55 0.69 Revenue 68,086.50 15,818.35 19,054.00 EBITDA 29,357.50 6,895.00 8,484.00

3 yr As Reported Annuals Income Statement

Exchange rate used is that of the Year End reported date As Reported Annual Income Statement Report Date 06/30/2010 06/30/2009 06/30/2008 Currency USD USD USD Audit Status Not Qualified Not Qualified Not Qualified Consolidated Yes Yes Yes Scale Thousands Thousands Thousands Revenue 62,484,000 58,437,000 60,420,000 Cost of revenue 12,395,000 12,155,000 11,598,000 Research & development expense 8,714,000 9,010,000 8,164,000 Sales & marketing expense 13,214,000 12,879,000 13,039,000 General & administrative expense 4,004,000 3,700,000 5,127,000 Employee severance 59,000 330,000 - Total operating expenses 38,386,000 38,074,000 37,928,000 Operating income (loss) 24,098,000 20,363,000 22,492,000 Dividends & interest income 843,000 706,000 888,000 Interest expense 151,000 - - Net recognized gains (losses) on 348,000 (125,000) 346,000 investments Net gains (losses) on derivatives (140,000) (558,000) 226,000 Net gains (losses) on foreign currency 1,000 (509,000) - remeasurements Other investment income (losses) - - (138,000) Other income (expense) 14,000 (56,000) - Investment income & other - - 1,322,000 Total other income (expense) 915,000 (542,000) - Income (loss) before income taxes - 9,575,000 5,529,000 12,682,000 United States Income (loss) before income taxes - 15,438,000 14,292,000 11,132,000 International Income (loss) before income taxes 25,013,000 19,821,000 23,814,000 Current taxes provision (benefit)- U.S. 4,415,000 3,159,000 4,357,000 federal Current taxes provision (benefit) - 357,000 192,000 256,000 U.S. state & local Current taxes provision (benefit) - 1,701,000 1,139,000 1,007,000 international Current taxes provision (benefit) - 6,473,000 4,490,000 5,620,000 total Deferred taxes provision (benefit) - (220,000) 762,000 513,000 total Provision (benefit) for income taxes 6,253,000 5,252,000 6,133,000

02/20/2011 29 Mergent, Inc. Microsoft Corporation

Report Date 06/30/2010 06/30/2009 06/30/2008 Currency USD USD USD Audit Status Not Qualified Not Qualified Not Qualified Consolidated Yes Yes Yes Scale Thousands Thousands Thousands Net income (loss) 18,760,000 14,569,000 17,681,000 Weighted average shares outstanding - 8,813,000 8,945,000 9,328,000 basic Weighted average shares outstanding - 8,927,000 8,996,000 9,470,000 diluted Year end shares outstanding 8,668,000 8,908,000 9,151,000 Net earnings (loss) per share-basic 2.13 1.63 1.9 Net earnings (loss) per share-diluted 2.1 1.62 1.87 Cash dividends declared per common share 0.52 0.52 0.44 Number of full time employees 89,000 93,000 91,000 Number of common stockholders 138,568 142,468 145,903

3 yr As Reported Annuals Balance Sheet

Exchange rate used is that of the Year End reported date As Reported Annual Balance Sheet Report Date 06/30/2010 06/30/2009 06/30/2008 Currency USD USD USD Audit Status Not Qualified Not Qualified Not Qualified Consolidated Yes Yes Yes Scale Thousands Thousands Thousands Cash & cash equivalents 5,505,000 6,076,000 10,339,000 Short-term investments 31,283,000 25,371,000 13,323,000 Total cash, cash equivalents, & 36,788,000 31,447,000 23,662,000 short-term investments Accounts receivable, gross 13,389,000 11,643,000 13,742,000 Less: allowance for doubtful accounts 375,000 451,000 153,000 Accounts receivable, net 13,014,000 11,192,000 13,589,000 Raw materials 172,000 170,000 417,000 Work in process 16,000 45,000 31,000 Finished goods 552,000 502,000 537,000 Inventories 740,000 717,000 985,000 Deferred income taxes 2,184,000 2,213,000 2,017,000 Other current assets 2,950,000 3,711,000 2,989,000 Total current assets 55,676,000 49,280,000 43,242,000 Land 526,000 526,000 518,000 Buildings & improvements 6,087,000 5,886,000 4,302,000 Leasehold improvments 2,100,000 1,938,000 1,728,000 Computer equipment & software 5,673,000 4,989,000 4,475,000 Furniture & equipment 1,873,000 1,743,000 1,521,000 Property & equipment, at cost 16,259,000 15,082,000 12,544,000 Less: accumulated depreciation 8,629,000 7,547,000 6,302,000 Property & equipment, net 7,630,000 7,535,000 6,242,000 Equity & other investments 7,754,000 4,933,000 6,588,000 Goodwill 12,394,000 12,503,000 12,108,000 Intangible assets, net 1,158,000 1,759,000 1,973,000

02/20/2011 30 Mergent, Inc. Microsoft Corporation

Report Date 06/30/2010 06/30/2009 06/30/2008 Currency USD USD USD Audit Status Not Qualified Not Qualified Not Qualified Consolidated Yes Yes Yes Scale Thousands Thousands Thousands Deferred income taxes 0 279,000 949,000 Other long-term assets 1,501,000 1,599,000 1,691,000 Total assets 86,113,000 77,888,000 72,793,000 Accounts payable 4,025,000 3,324,000 4,034,000 Short-term debt 1,000,000 2,000,000 - Accrued compensation 3,283,000 3,156,000 2,934,000 Income taxes 1,074,000 725,000 3,248,000 Short-term unearned revenue 13,652,000 13,003,000 13,397,000 Securities lending payable 182,000 1,684,000 2,614,000 Other current liabilities 2,931,000 3,142,000 3,659,000 Total current liabilities 26,147,000 27,034,000 29,886,000 Zero coupon convertible notes 1,250,000 - - Notes 3,750,000 3,750,000 - Unamortized debt discount (61,000) (4,000) - Long-term debt 4,939,000 3,746,000 - Long-term unearned revenue 1,178,000 1,281,000 1,900,000 Deferred income taxes 229,000 - - Tax contingencies & other tax 6,887,000 5,515,000 3,812,000 liabilities Legal contingencies 236,000 407,000 530,000 Product warranty 69,000 132,000 278,000 Other long-term liabilities 253,000 215,000 101,000 Other long-term liabilities 7,445,000 6,269,000 4,721,000 Common stock & paid-in capital 62,856,000 62,382,000 62,849,000 Retained earnings (accumulated deficit) (16,681,000) (22,824,000) (26,563,000) Total stockholders' equity 46,175,000 39,558,000 36,286,000

3 yr As Reported Annuals Cash Flows

Exchange rate used is that of the Year End reported date As Reported Annual Cash Flow Report Date 06/30/2010 06/30/2009 06/30/2008 Currency USD USD USD Audit Status Not Qualified Not Qualified Not Qualified Consolidated Yes Yes Yes Scale Thousands Thousands Thousands Net income (loss) 18,760,000 14,569,000 17,681,000 Depreciation, amortization, & other 2,673,000 2,562,000 2,056,000 noncash items Stock-based compensation 1,891,000 1,708,000 1,479,000 Net recognized (gains) losses on - 683,000 (572,000) investments Net recognized (gains) losses on (208,000) - - investments & derivatives Excess tax benefits from stock-based - (52,000) (120,000) payment arrangements

02/20/2011 31 Mergent, Inc. Microsoft Corporation

Report Date 06/30/2010 06/30/2009 06/30/2008 Currency USD USD USD Audit Status Not Qualified Not Qualified Not Qualified Consolidated Yes Yes Yes Scale Thousands Thousands Thousands Excess tax benefits from stock based (45,000) - - compensation Deferred income taxes (220,000) 762,000 935,000 Deferral of unearned revenue 29,374,000 24,409,000 24,532,000 Recognition of unearned revenue (28,813,000) (25,426,000) (21,944,000) Accounts receivable (2,238,000) 2,215,000 (1,569,000) Other current assets 420,000 (422,000) 153,000 Other long-term assets (223,000) (273,000) (98,000) Other current liabilities 1,295,000 (3,371,000) (748,000) Other long-term liabilities 1,407,000 1,673,000 (173,000) Net cash flows from operating activities 24,073,000 19,037,000 21,612,000 Short-term borrowings (repayments), (991,000) 1,178,000 - maturities of 90 days or less, net Proceeds from issuance of debt, 4,167,000 4,796,000 - maturities longer than 90 days Repayments of debt, maturities longer (2,986,000) (228,000) - than 90 days Common stock issued 2,311,000 579,000 3,494,000 Common stock repurchased (11,269,000) (9,353,000) (12,533,000) Common stock cash dividends (4,578,000) (4,468,000) (4,015,000) Excess tax benefits from stock-based - 52,000 120,000 payment arrangements Excess tax benefits from stock based 45,000 - - compensation Other financing activities, net 10,000 (19,000) - Net cash flows from financing activities (13,291,000) (7,463,000) (12,934,000) Additions to property & equipment (1,977,000) (3,119,000) (3,182,000) Acquisitions of companies, net of cash (245,000) (868,000) (8,053,000) acquired Purchase of investments (30,168,000) (36,850,000) (20,954,000) Maturities of investments 7,453,000 6,191,000 2,597,000 Sales of investments 15,125,000 19,806,000 25,132,000 Securities lending payable (1,502,000) (930,000) (127,000) Net cash flows from investing activities (11,314,000) (15,770,000) (4,587,000) Effect of exch rates on cash & cash (39,000) (67,000) 137,000 equivalents Net change in cash & cash (571,000) (4,263,000) 4,228,000 equivalents Cash & cash equivalents, beginning 6,076,000 10,339,000 6,111,000 of period Cash & cash equivalents, end of 5,505,000 6,076,000 10,339,000 yperiod

3 yr As Reported Quarters Income Statement

Exchange rate used is that of the Year End reported date As Reported Quarterly Income Statement

02/20/2011 32 Mergent, Inc. Microsoft Corporation

Report Date 12/31/2010 09/30/2010 03/31/2010 12/31/2009 2nd Quarter 1st Quarter 3rd Quarter 2nd Quarter Currency USD USD USD USD Audit Status Unaudited Unaudited Unaudited Unaudited Consolidated Yes Yes Yes Yes Scale Thousands Thousands Thousands Thousands Revenue 19,953,000 16,195,000 14,503,000 19,022,000 Cost of revenue 4,833,000 3,139,000 2,755,000 3,628,000 Research & development expenses 2,185,000 2,196,000 2,220,000 2,079,000 Sales & marketing expenses 3,825,000 2,806,000 3,203,000 3,619,000 General & administrative expenses 945,000 938,000 1,152,000 1,124,000 Employee severance - - 0 59,000 Total operating expenses 11,788,000 9,079,000 9,330,000 10,509,000 Operating income (loss) 8,165,000 7,116,000 5,173,000 8,513,000 Dividends & interest income 205,000 210,000 166,000 159,000 Interest expense 72,000 45,000 - - Net recognized gains (losses) on 118,000 34,000 137,000 92,000 investments Net gains (losses) on derivatives 108,000 (5,000) (69,000) 96,000 Net gains (losses) on foreign currency (27,000) (42,000) (56,000) (23,000) remeasurements Other income (expense) - (38,000) (10,000) 46,000 Other income (expense) 332,000 114,000 168,000 370,000 Income (loss) before income taxes 8,497,000 7,230,000 5,341,000 8,883,000 Provision for income taxes 1,863,000 1,820,000 1,335,000 2,221,000 Net income (loss) 6,634,000 5,410,000 4,006,000 6,662,000 Weighted average shares outstanding - 8,497,000 8,614,000 8,767,000 8,856,000 basic Weighted average shares outstanding - 8,570,000 8,695,000 8,876,000 8,951,000 diluted Year end shares outstanding 8,403,000 8,562,000 8,762,000 8,811,000 Net earnings (loss) per share - basic 0.78 0.63 0.46 0.75 Net earnings (loss) per share - diluted 0.77 0.62 0.45 0.74 Cash dividends declared per common share 0.16 0.16 0.13 0.13

Report Date 09/30/2009 03/31/2009 12/31/2008 09/30/2008 1st Quarter 3rd Quarter 2nd Quarter 1st Quarter Currency USD USD USD USD Audit Status Unaudited Unaudited Unaudited Unaudited Consolidated Yes Yes Yes Yes Scale Thousands Thousands Thousands Thousands Revenue 12,920,000 13,648,000 16,629,000 15,061,000 Cost of revenue 2,842,000 2,814,000 3,907,000 2,848,000 Research & development expenses 2,065,000 2,212,000 2,290,000 2,283,000 Sales & marketing expenses 2,790,000 2,981,000 3,662,000 3,044,000 General & administrative expenses 741,000 913,000 831,000 887,000 Employee severance - 290,000 - - Total operating expenses 8,438,000 9,210,000 10,690,000 9,062,000 Operating income (loss) 4,482,000 4,438,000 5,939,000 5,999,000 Dividends & interest income 165,000 164,000 175,000 207,000 Interest expense - - - -

02/20/2011 33 Mergent, Inc. Microsoft Corporation

Report Date 09/30/2009 03/31/2009 12/31/2008 09/30/2008 1st Quarter 3rd Quarter 2nd Quarter 1st Quarter Currency USD USD USD USD Audit Status Unaudited Unaudited Unaudited Unaudited Consolidated Yes Yes Yes Yes Scale Thousands Thousands Thousands Thousands Net recognized gains (losses) on 70,000 (452,000) 270,000 129,000 investments Net gains (losses) on derivatives (4,000) (55,000) (409,000) (165,000) Net gains (losses) on foreign currency 55,000 (26,000) (350,000) (179,000) remeasurements Other income (expense) (3,000) (19,000) 13,000 - Other income (expense) 283,000 (388,000) (301,000) (8,000) Income (loss) before income taxes 4,765,000 4,050,000 5,638,000 5,991,000 Provision for income taxes 1,191,000 1,073,000 1,464,000 1,618,000 Net income (loss) 3,574,000 2,977,000 4,174,000 4,373,000 Weighted average shares outstanding - 8,914,000 8,891,000 8,903,000 9,084,000 basic Weighted average shares outstanding - 8,983,000 8,904,000 8,914,000 9,183,000 diluted Year end shares outstanding 8,900,000 8,898,000 8,889,000 8,977,000 Net earnings (loss) per share - basic 0.4 0.33 0.47 0.48 Net earnings (loss) per share - diluted 0.4 0.33 0.47 0.48 Cash dividends declared per common share 0.13 0.13 0.13 0.13

3 yr As Reported Quarters Balance Sheet

Exchange rate used is that of the Year End reported date As Reported Quarterly Balance Sheet Report Date 12/31/2010 09/30/2010 03/31/2010 12/31/2009 2nd Quarter 1st Quarter 3rd Quarter 2nd Quarter Currency USD USD USD USD Audit Status Unaudited Unaudited Unaudited Unaudited Consolidated Yes Yes Yes Yes Scale Thousands Thousands Thousands Thousands Cash & cash equivalents 4,023,000 8,161,000 8,155,000 9,422,000 Short-term investments 37,229,000 36,012,000 31,511,000 26,677,000 Total cash, cash equivalents & 41,252,000 44,173,000 39,666,000 36,099,000 short-term investments Accounts receivable, gross 13,191,000 9,958,000 9,518,000 11,702,000 Less: allowance for doubtful accounts 317,000 312,000 381,000 506,000 Accounts receivable, net 12,874,000 9,646,000 9,137,000 11,196,000 Raw materials 151,000 189,000 120,000 100,000 Work in process 54,000 10,000 4,000 11,000 Finished goods 656,000 1,043,000 377,000 478,000 Inventories 861,000 1,242,000 501,000 589,000 Deferred income taxes 2,548,000 2,344,000 2,222,000 2,056,000 Other current assets 2,149,000 2,176,000 2,992,000 2,547,000 Total current assets 59,684,000 59,581,000 54,518,000 52,487,000 Property & equipment, gross 17,078,000 16,713,000 15,765,000 15,572,000 Less: accumulated depreciation 9,279,000 8,942,000 8,393,000 8,170,000

02/20/2011 34 Mergent, Inc. Microsoft Corporation

Report Date 12/31/2010 09/30/2010 03/31/2010 12/31/2009 2nd Quarter 1st Quarter 3rd Quarter 2nd Quarter Currency USD USD USD USD Audit Status Unaudited Unaudited Unaudited Unaudited Consolidated Yes Yes Yes Yes Scale Thousands Thousands Thousands Thousands Property & equipment, net 7,799,000 7,771,000 7,372,000 7,402,000 Equity & other investments 10,022,000 9,211,000 7,797,000 6,976,000 Goodwill 12,502,000 12,471,000 12,463,000 12,368,000 Intangible assets, gross - - 3,940,000 - Less: total accumulated amortization - - 2,658,000 - Intangible assets, net 992,000 1,077,000 1,282,000 1,346,000 Deferred income taxes - - 0 - Other long-term assets 1,307,000 1,429,000 1,478,000 1,517,000 Total assets 92,306,000 91,540,000 84,910,000 82,096,000 Accounts payable 3,863,000 3,654,000 3,279,000 3,171,000 Short-term debt - 1,000,000 2,249,000 2,249,000 Accrued compensation 2,402,000 2,252,000 2,885,000 2,417,000 Income taxes 1,439,000 2,136,000 901,000 721,000 Short-term unearned revenue 12,063,000 12,767,000 11,171,000 11,361,000 Securities lending payable 1,355,000 909,000 2,794,000 2,911,000 Other current liabilities 3,190,000 3,139,000 3,145,000 2,885,000 Total current liabilities 24,312,000 25,857,000 26,424,000 25,715,000 Notes 8,500,000 - - - Convertible debt 1,250,000 - - - Total unamortized discount (79,000) - - - Long-term debt 9,671,000 9,665,000 3,746,000 3,746,000 Long-term unearned revenue 1,354,000 1,152,000 1,089,000 1,167,000 Deferred income taxes 826,000 540,000 828,000 377,000 Other long-term liabilities 7,662,000 7,384,000 7,113,000 6,808,000 Total liabilities 43,825,000 44,598,000 - - Common stock & paid-in capital 61,646,000 61,935,000 62,517,000 62,566,000 Retained earnings (accumulated deficit) (13,165,000) (14,993,000) (16,807,000) (18,283,000) Total stockholders' equity 48,481,000 46,942,000 45,710,000 44,283,000

Report Date 09/30/2009 03/31/2009 12/31/2008 09/30/2008 1st Quarter 3rd Quarter 2nd Quarter 1st Quarter Currency USD USD USD USD Audit Status Unaudited Unaudited Unaudited Unaudited Consolidated Yes Yes Yes Yes Scale Thousands Thousands Thousands Thousands Cash & cash equivalents 8,823,000 7,285,000 8,346,000 9,004,000 Short-term investments 27,905,000 18,055,000 12,369,000 11,718,000 Total cash, cash equivalents & 36,728,000 25,340,000 20,715,000 20,722,000 short-term investments Accounts receivable, gross 9,023,000 9,424,000 11,207,000 9,703,000 Less: allowance for doubtful accounts 436,000 242,000 254,000 168,000 Accounts receivable, net 8,587,000 9,182,000 10,953,000 9,535,000 Raw materials 165,000 173,000 263,000 402,000 Work in process 30,000 58,000 57,000 58,000 Finished goods 955,000 426,000 648,000 1,180,000

02/20/2011 35 Mergent, Inc. Microsoft Corporation

Report Date 09/30/2009 03/31/2009 12/31/2008 09/30/2008 1st Quarter 3rd Quarter 2nd Quarter 1st Quarter Currency USD USD USD USD Audit Status Unaudited Unaudited Unaudited Unaudited Consolidated Yes Yes Yes Yes Scale Thousands Thousands Thousands Thousands Inventories 1,150,000 657,000 968,000 1,640,000 Deferred income taxes 2,441,000 1,926,000 1,504,000 1,974,000 Other current assets 3,325,000 3,619,000 3,590,000 3,331,000 Total current assets 52,231,000 40,724,000 37,730,000 37,202,000 Property & equipment, gross 15,365,000 14,348,000 13,955,000 13,174,000 Less: accumulated depreciation 7,853,000 7,236,000 6,959,000 6,622,000 Property & equipment, net 7,512,000 7,112,000 6,996,000 6,552,000 Equity & other investments 6,006,000 4,112,000 3,922,000 4,381,000 Goodwill 12,582,000 12,554,000 12,490,000 12,291,000 Intangible assets, gross - - - - Less: total accumulated amortization - - - - Intangible assets, net 1,653,000 1,756,000 1,815,000 1,899,000 Deferred income taxes - 956,000 1,109,000 1,041,000 Other long-term assets 1,628,000 1,639,000 1,724,000 1,751,000 Total assets 81,612,000 68,853,000 65,786,000 65,117,000 Accounts payable 3,287,000 3,017,000 3,533,000 3,351,000 Short-term debt 2,250,000 1,999,000 2,000,000 1,975,000 Accrued compensation 2,224,000 2,644,000 2,239,000 2,138,000 Income taxes 847,000 773,000 848,000 514,000 Short-term unearned revenue 13,567,000 10,924,000 11,532,000 11,815,000 Securities lending payable 3,534,000 1,533,000 469,000 1,070,000 Other current liabilities 3,052,000 2,933,000 3,089,000 3,520,000 Total current liabilities 28,761,000 23,823,000 23,710,000 24,383,000 Notes - - - - Convertible debt - - - - Total unamortized discount - - - - Long-term debt 3,746,000 - - - Long-term unearned revenue 1,201,000 1,388,000 1,534,000 1,662,000 Deferred income taxes 155,000 - - - Other long-term liabilities 6,537,000 6,699,000 6,064,000 5,478,000 Total liabilities - - - - Common stock & paid-in capital 62,293,000 61,896,000 61,392,000 61,655,000 Retained earnings (accumulated deficit) (21,081,000) (24,953,000) (26,914,000) (28,061,000) Total stockholders' equity 41,212,000 36,943,000 34,478,000 33,594,000

3 yr As Reported Quarters Cash Flows

Exchange rate used is that of the Year End reported date As Reported Quarterly Cash Flow Report Date 12/31/2010 09/30/2010 03/31/2010 12/31/2009 09/30/2009 2nd Quarter 1st Quarter 3rd Quarter 2nd Quarter 1st Quarter Currency USD USD USD USD USD Audit Status Unaudited Unaudited Unaudited Unaudited Unaudited Consolidated Yes Yes Yes Yes Yes Scale Thousands Thousands Thousands Thousands Thousands

02/20/2011 36 Mergent, Inc. Microsoft Corporation

Report Date 12/31/2010 09/30/2010 03/31/2010 12/31/2009 09/30/2009 2nd Quarter 1st Quarter 3rd Quarter 2nd Quarter 1st Quarter Currency USD USD USD USD USD Audit Status Unaudited Unaudited Unaudited Unaudited Unaudited Consolidated Yes Yes Yes Yes Yes Scale Thousands Thousands Thousands Thousands Thousands Net income (loss) 6,634,000 5,410,000 4,006,000 6,662,000 3,574,000 Depreciation, amortization, & other 663,000 694,000 694,000 615,000 646,000 noncash items Stock-based compensation expense 553,000 528,000 481,000 485,000 443,000 Net recognized losses (gains) on (226,000) (29,000) (68,000) (188,000) (66,000) investments & derivatives Excess tax benefits from stock-based (4,000) (5,000) (14,000) (15,000) (9,000) compensation Deferred income taxes (117,000) (148,000) (241,000) 550,000 (46,000) Deferral of unearned revenue 6,834,000 5,881,000 6,087,000 6,926,000 6,679,000 Recognition of unearned revenue (7,301,000) (6,862,000) (6,395,000) (9,126,000) (6,237,000) Accounts receivable (3,270,000) 3,674,000 1,947,000 (2,789,000) 2,748,000 Inventories 380,000 (468,000) - - - Other current assets (77,000) 208,000 (284,000) 1,244,000 (654,000) Other long-term assets 118,000 62,000 (81,000) 16,000 (78,000) Accounts payable 216,000 (400,000) - - - Other current liabilities (500,000) (911,000) 897,000 285,000 (1,239,000) Other long-term liabilities 283,000 560,000 364,000 304,000 346,000 Net cash flows from operating activities 4,186,000 8,194,000 7,393,000 4,969,000 6,107,000 Net proceeds from short-term debt - - - - 378,000 Short-term borrowing (repayments), (1,000,000) 814,000 (349,000) (475,000) (823,000) maturities of 90 days or less, net Proceeds from issuance of debt, - 4,721,000 851,000 1,046,000 695,000 maturities longer than 90 days Repayments of debt, maturities longer - (814,000) (502,000) (573,000) - than 90 days Common stock issued 660,000 177,000 422,000 729,000 248,000 Common stock repurchased (5,052,000) (4,399,000) (2,023,000) (3,867,000) (1,540,000) Common stock cash dividends paid (1,363,000) (1,118,000) (1,139,000) (1,152,000) (1,157,000) Excess tax benefits from stock-based 4,000 5,000 14,000 15,000 9,000 compensation Other financing activities - (25,000) - - - Net cash flows from financing activities (6,751,000) (639,000) (2,726,000) (4,277,000) (2,190,000) Additions to property & equipment (491,000) (564,000) (408,000) (376,000) (435,000) Acquisitions of companies, net of cash (69,000) 0 (143,000) (63,000) (39,000) acquired Purchases of investments (5,896,000) (7,417,000) (11,217,000) (4,287,000) (10,490,000) Maturities of investments 1,836,000 870,000 1,054,000 1,896,000 3,498,000 Sales of investments 2,603,000 1,427,000 4,927,000 3,361,000 4,417,000 Securities lending payable 447,000 727,000 (117,000) (623,000) 1,850,000 Net cash flows from investing activities (1,570,000) (4,957,000) (5,904,000) (92,000) (1,199,000) Effect of exchange rates on cash & (3,000) 58,000 (30,000) (1,000) 29,000 cash equivalents Net change in cash & cash (4,138,000) 2,656,000 (1,267,000) 599,000 2,747,000 equivalents

02/20/2011 37 Mergent, Inc. Microsoft Corporation

Report Date 12/31/2010 09/30/2010 03/31/2010 12/31/2009 09/30/2009 2nd Quarter 1st Quarter 3rd Quarter 2nd Quarter 1st Quarter Currency USD USD USD USD USD Audit Status Unaudited Unaudited Unaudited Unaudited Unaudited Consolidated Yes Yes Yes Yes Yes Scale Thousands Thousands Thousands Thousands Thousands Cash & cash equivalents, beginning 8,161,000 5,505,000 9,422,000 8,823,000 6,076,000 of period Cash & cash equivalents, end of 4,023,000 8,161,000 8,155,000 9,422,000 8,823,000 period

Report Date 03/31/2009 12/31/2008 09/30/2008 3rd Quarter 2nd Quarter 1st Quarter Currency USD USD USD Audit Status Unaudited Unaudited Unaudited Consolidated Yes Yes Yes Scale Thousands Thousands Thousands Net income (loss) 2,977,000 4,174,000 4,373,000 Depreciation, amortization, & other 664,000 632,000 585,000 noncash items Stock-based compensation expense 432,000 417,000 443,000 Net recognized losses (gains) on 507,000 139,000 36,000 investments & derivatives Excess tax benefits from stock-based (2,000) (2,000) (44,000) compensation Deferred income taxes (368,000) 454,000 376,000 Deferral of unearned revenue 5,899,000 5,969,000 4,186,000 Recognition of unearned revenue (6,670,000) (6,364,000) (6,044,000) Accounts receivable 1,697,000 (1,647,000) 3,985,000 Inventories - - - Other current assets 106,000 797,000 (558,000) Other long-term assets 26,000 (69,000) (116,000) Accounts payable - - - Other current liabilities 114,000 614,000 (4,552,000) Other long-term liabilities 662,000 668,000 700,000 Net cash flows from operating activities 6,044,000 5,782,000 3,370,000 Net proceeds from short-term debt - 21,000 1,975,000 Short-term borrowing (repayments), (329,000) - - maturities of 90 days or less, net Proceeds from issuance of debt, 328,000 - - maturities longer than 90 days Repayments of debt, maturities longer - - - than 90 days Common stock issued 112,000 96,000 228,000 Common stock repurchased (18,000) (2,820,000) (6,493,000) Common stock cash dividends paid (1,155,000) (1,157,000) (998,000) Excess tax benefits from stock-based 2,000 2,000 44,000 compensation Other financing activities - - - Net cash flows from financing activities (1,060,000) (3,858,000) (5,244,000) Additions to property & equipment (632,000) (842,000) (778,000)

02/20/2011 38 Mergent, Inc. Microsoft Corporation

Report Date 03/31/2009 12/31/2008 09/30/2008 3rd Quarter 2nd Quarter 1st Quarter Currency USD USD USD Audit Status Unaudited Unaudited Unaudited Consolidated Yes Yes Yes Scale Thousands Thousands Thousands Acquisitions of companies, net of cash - (450,000) (377,000) acquired Purchases of investments (10,683,000) (6,596,000) (4,246,000) Maturities of investments 915,000 290,000 464,000 Sales of investments 3,327,000 5,700,000 7,075,000 Securities lending payable 1,064,000 (601,000) (1,543,000) Net cash flows from investing activities (6,009,000) (2,499,000) 595,000 Effect of exchange rates on cash & (36,000) (83,000) (56,000) cash equivalents Net change in cash & cash (1,061,000) (658,000) (1,335,000) equivalents Cash & cash equivalents, beginning 8,346,000 9,004,000 10,339,000 of period Cash & cash equivalents, end of 7,285,000 8,346,000 9,004,000 period

2,3,5 yr Analysis - Income Statement

06/30/2010 06/30/2009 Variance 12/31/2010 Item USD USD USD % USD Revenues 62,484,000,000 58,437,000,000 4,047,000,000 6.93 19,953,000,000 Direct Costs 12,395,000,000 12,155,000,000 240,000,000 1.97 4,833,000,000 Gross Profit 50,089,000,000 46,282,000,000 3,807,000,000 8.23 15,120,000,000 Taxation 6,253,000,000 5,252,000,000 1,001,000,000 19.06 1,863,000,000 Net Income 18,760,000,000 14,569,000,000 4,191,000,000 28.77 6,634,000,000 EPS Continuing Basic 2.13 1.63 0.50 30.67 0.78 EPS Net Basic 2.13 1.63 0.50 30.67 0.78 EPS Continuing Diluted 2.1 1.62 0.48 29.63 0.77 EPS Net Diluted 2.1 1.62 0.48 29.63 0.77

06/30/2010 Variance Compound Annual Growth Rate Item USD USD % 3 Year 5 Year Revenues 16,039,000,000 3,914,000,000 24.40 0.01 0.07 Direct Costs 3,170,000,000 1,663,000,000 52.46 0.02 0.10 Gross Profit 12,869,000,000 2,251,000,000 17.49 0.01 0.06 Taxation 1,506,000,000 357,000,000 23.71 0.01 0.02 Net Income 4,518,000,000 2,116,000,000 46.83 0.02 0.08 EPS Continuing Basic 0.52 0.26 50.00 0.04 0.12 EPS Net Basic 0.52 0.26 50.00 0.04 0.12 EPS Continuing Diluted 0.51 0.26 50.98 0.04 0.12 EPS Net Diluted 0.51 0.26 50.98 0.04 0.12

2,3,5 yr Analysis - Balance Sheet

06/30/2010 06/30/2009 Variance 12/31/2010

02/20/2011 39 Mergent, Inc. Microsoft Corporation

06/30/2010 06/30/2009 Variance 12/31/2010 Item USD USD USD % USD Cash & Equivalents 5,505,000,000 6,076,000,000 (571,000,000) (9.40) 4,023,000,000 Receivables (ST) 13,014,000,000 11,192,000,000 1,822,000,000 16.28 12,874,000,000 Inventories 740,000,000 717,000,000 23,000,000 3.21 861,000,000 Current Assets 55,676,000,000 49,280,000,000 6,396,000,000 12.98 59,684,000,000 Long Term Investments 7,754,000,000 4,933,000,000 2,821,000,000 57.19 10,022,000,000 Net Property Plant & Equip 7,630,000,000 7,535,000,000 95,000,000 1.26 7,799,000,000 Total Assets 86,113,000,000 77,888,000,000 8,225,000,000 10.56 92,306,000,000 Accounts Payable 4,025,000,000 3,324,000,000 701,000,000 21.09 3,863,000,000 Current Liabilities 26,147,000,000 27,034,000,000 (887,000,000) (3.28) 24,312,000,000 LT Debt & Leases 4,939,000,000 3,746,000,000 1,193,000,000 31.85 9,671,000,000 Total Liabilities 39,938,000,000 38,330,000,000 1,608,000,000 4.20 43,825,000,000 Total Equity 46,175,000,000 39,558,000,000 6,617,000,000 16.73 48,481,000,000

06/30/2010 Variance Compound Annual Growth Rate Item USD USD % 3 Year Cash & Equivalents 5,505,000,000 (1,482,000,000) (26.92) (0.19) Receivables (ST) 13,014,000,000 (140,000,000) (1.08) (0.01) Inventories 740,000,000 121,000,000 16.35 (0.09) Current Assets 55,676,000,000 4,008,000,000 7.20 0.09 Long Term Investments 7,754,000,000 2,268,000,000 29.25 0.06 Net Property Plant & Equip 7,630,000,000 169,000,000 2.21 0.07 Total Assets 86,113,000,000 6,193,000,000 7.19 0.06 Accounts Payable 4,025,000,000 (162,000,000) (4.02) 0.00 Current Liabilities 26,147,000,000 (1,835,000,000) (7.02) (0.04) LT Debt & Leases 4,939,000,000 4,732,000,000 95.81 - Total Liabilities 39,938,000,000 3,887,000,000 9.73 0.03 Total Equity 46,175,000,000 2,306,000,000 4.99 0.08

Item 5 Year Cash & Equivalents (0.04) Receivables (ST) 0.07 Inventories (0.13) Current Assets 0.03 Long Term Investments (0.03) Net Property Plant & Equip 0.20 Total Assets 0.04 Accounts Payable 0.07 Current Liabilities 0.03 LT Debt & Leases - Total Liabilities 0.06 Total Equity 0.03

2,3,5 yr Analysis - Ratio Analysis

06/30/2010 06/30/2009 Variance 12/31/2010 06/30/2010 Variance Item USD USD USD % USD USD USD ROA % (Net) 22.88 19.34 3.54 18.30 28.63 21.19 7.44 ROE % (Net) 43.76 38.42 5.34 13.90 55.16 39.44 15.72

02/20/2011 40 Mergent, Inc. Microsoft Corporation

06/30/2010 06/30/2009 Variance 12/31/2010 06/30/2010 Variance Item USD USD USD % USD USD USD ROI % (Operating) 49.47 49.92 (0.45) (0.90) 55.97 45.82 10.15 EBITDA Margin % 41.8 35.62 6.18 17.35 45.24 40.78 4.46 Gross Margin % 80.16 79.2 0.96 1.21 75.78 80.24 (4.46) Quick Ratio 0.71 0.64 0.07 10.94 0.7 - - Current Ratio 2.13 1.82 0.31 17.03 2.45 2.13 0.32 Net Current Assets % TA 34.29 28.56 5.73 20.06 38.32 34.29 4.03 LT Debt to Equity 0.11 0.09 0.02 22.22 0.2 0.11 0.09 Total Debt to Equity 0.13 0.15 (0.02) (13.33) 0.2 0.13 0.07 Total Asset Turnover 0.76 0.78 (0.02) (2.56) 0.86 0.75 0.11

Compound Annual Growth Rate Item % 3 Year 5 Year ROA % (Net) 35.11 (0.04) 0.05 ROE % (Net) 39.86 (0.06) 0.09 ROI % (Operating) 22.15 (0.09) 0.06 EBITDA Margin % 10.94 0.01 (0.01) Gross Margin % (5.56) 0.00 (0.01) Quick Ratio - (0.04) 0.00 Current Ratio 15.02 0.14 0.00 Net Current Assets % TA 11.75 0.23 (0.02) LT Debt to Equity 81.82 - - Total Debt to Equity 53.85 - - Total Asset Turnover 14.67 (0.05) 0.04

3 yr Business Analysis

Revenues Operating Income Report Date 06/30/2010 06/30/2009 06/30/2008 06/30/2010 06/30/2009 Currency USD USD USD USD USD Scale Thousands Thousands Thousands Thousands Thousands Client - 14,414,000 16,472,000 - 10,435,000 Windows & Windows Live Division 17,788,000 - - 12,089,000 - Server & Tools 14,878,000 14,135,000 13,189,000 4,990,000 5,047,000 Online Services Business 2,198,000 3,088,000 3,214,000 (2,436,000) (2,391,000) Microsoft Business Division 18,909,000 18,902,000 18,937,000 11,664,000 11,940,000 Entertainment & Devices Division 8,114,000 7,753,000 8,139,000 589,000 5,000 Total 61,887,000 58,292,000 59,951,000 26,896,000 25,036,000

Report Date 06/30/2008 Currency USD Scale Thousands Client 12,537,000 Windows & Windows Live Division - Server & Tools 4,261,000 Online Services Business (1,309,000) Microsoft Business Division 12,182,000 Entertainment & Devices Division 267,000 Total 27,938,000

02/20/2011 41 Mergent, Inc.