EXHIBIT 99.2
RECLASSIFIED HISTORICAL INCOME STATEMENTS BY QUARTER
MICROSOFT CORPORATION
RECLASSIFIED INCOME STATEMENTS
(In millions) (Unaudited)
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Reported quarterly income statements
Q97-1 Q97-2 Q97-3 Q97-4 Q98-1 Q98-2 Q98-3 Q98-4 Q99-1 Q99-2 Q99-3
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Revenue $2,295 $2,680 $3,208 $3,175 $3,130 $3,585 $3,774 $3,995 $3,853 $4,938 $4,331
Operating expenses:
Cost of revenue 250 296 297 242 253 313 317 314 307 433 350
Research and development 432 485 492 516 567 627 597 711 611 667 611
Acquired in-process technology 0 0 0 0 296 0 0 0 0 0 0
Sales and marketing 625 737 750 744 788 876 829 919 830 940 996
General and administrative 86 81 101 94 95 106 104 128 99 149 144
Other expenses 49 46 84 80 71 50 60 49 24 35 1
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Total operating expenses 1,442 1,645 1,724 1,676 2,070 1,972 1,907 2,121 1,871 2,224 2,102
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Operating income 853 1,035 1,484 1,499 1,060 1,613 1,867 1,874 2,082 2,714 2,229
Investment income 92 105 119 127 142 157 190 214 261 337 720
Gain on sale 0 0 0 0 0 0 0 0 160 0 0
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Income before income taxes 945 1,140 1,603 1,626 1,202 1,770 2,057 2,088 2,503 3,051 2,949
Provision for income taxes 331 399 561 569 539 637 720 731 820 1,068 1,032
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Net income $ 614 $ 741 $1,042 $1,057 $ 663 $1,133 $1,337 $1,357 $1,683 $1,983 $1,917
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Earnings per share:
Basic $ 0.13 $ 0.15 $ 0.22 $ 0.22 $ 0.14 $ 0.23 $ 0.27 $ 0.27 $ 0.34 $ 0.40 $ 0.38
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Diluted $ 0.12 $ 0.14 $ 0.20 $ 0.20 $ 0.12 $ 0.21 $ 0.25 $ 0.25 $ 0.31 $ 0.36 $ 0.35
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Reclassified quarterly income statements
Q97-1 Q97-2 Q97-3 Q97-4 Q98-1 Q98-2 Q98-3 Q98-4 Q99-1 Q99-2 Q99-3
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Revenue $2,405 $2,808 $3,365 $3,358 $3,334 $3,792 $3,984 $4,152 $4,193 $5,195 $4,595
Operating expenses:
Cost of revenue 482 558 583 547 534 613 640 673 649 788 708
Research and development 417 449 474 523 603 648 611 739 651 715 664
Acquired in-process technology 0 0 0 0 296 0 0 0 0 0 0
Sales and marketing 518 639 639 615 675 762 702 689 688 794 849
General and administrative 86 81 101 94 95 106 104 128 99 149 144
Other expenses 49 46 84 80 71 50 60 49 24 35 1
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Total operating expenses 1,552 1,773 1,881 1,859 2,274 2,179 2,117 2,278 2,111 2,481 2,366
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Operating income 853 1,035 1,484 1,499 1,060 1,613 1,867 1,874 2,082 2,714 2,229
Investment income 92 105 119 127 142 157 190 214 261 337 720
Gain on sale 0 0 0 0 0 0 0 0 160 0 0
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Income before income taxes 945 1,140 1,603 1,626 1,202 1,770 2,057 2,088 2,503 3,051 2,949
Provision for income taxes 331 399 561 569 539 637 720 731 820 1,068 1,032
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Net income $ 614 $ 741 $1,042 $1,057 $ 663 $1,133 $1,337 $1,357 $1,683 $1,983 $1,917
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Earnings per share:
Basic $ 0.13 $ 0.15 $ 0.22 $ 0.22 $ 0.14 $ 0.23 $ 0.27 $ 0.27 $ 0.34 $ 0.40 $ 0.38
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Diluted $ 0.12 $ 0.14 $ 0.20 $ 0.20 $ 0.12 $ 0.21 $ 0.25 $ 0.25 $ 0.31 $ 0.36 $ 0.35
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2