Wednesday July 11, 5:13 pm Eastern Time
Press Release
SOURCE: Microsoft Corp.
Microsoft Expects to Report Charge Related to
Investment Impairments
Company Anticipates Fourth Quarter Revenue Above Expectations
REDMOND, Wash., July 11 /PRNewswire/ -- Microsoft Corp. said today it expects to
report a net investment loss of $2.6 billion in the fourth fiscal quarter of 2001 primarily due
to a $3.9 billion pre-tax non-cash charge resulting from the impairment of certain publicly
traded and private equity securities, particularly in the cable and telecommunications
industries. As required under generally accepted accounting principles, Microsoft regularly
monitors and evaluates the realizable value of its investments. If events and circumstances
indicate that the decline in value of these assets is other- than-temporary, Microsoft records
a charge to investment income.
(Photo:
http://www.newscom.com/cgi-bin/prnh/20000822/MSFTLOGO )
``Generally accepted accounting principles require that we recognize this charge at this time,
but we remain steadfast in our commitment to the strategic business relationships that our
long-term investments continue to support,'' said John Connors, chief financial officer.
Microsoft also announced that it expects to report revenue in the fourth fiscal quarter in the
range of $6.50 to $6.60 billion, somewhat higher than management's previously expected
range of $6.30 to $6.50 billion. Additionally, management expects results from operations
to be in line with previous guidance. Including the non-cash charge, diluted earnings per
share is expected to be approximately $0.01.
``Core revenue growth for the quarter was strong and reflects consumer enthusiasm for our
products and services despite a slowing economy,'' Connors said. ``With the recent launch
of Office XP and the upcoming launches of Windows XP and Xbox, we are excited to see
another strong product cycle for the company underway. We will provide a more complete
analysis of the June quarter, and further details about our plans for fiscal year 2002, when
we announce earnings next week.''
The company will report full details of the financial results for the fourth fiscal quarter and full fiscal year in a press release after
the market closes on Thursday, July 19, 2001. The company will also hold its regularly scheduled conference call to discuss
the results.
