Microsoft_2000 Annual Report Canada Statement

Microsoft Corporation
Consolidated Statement of Earnings
Year Ended June 30, 2000
(In millions)
(unaudited)

Revenue			$ 33,829

Operating expenses:

	Cost of revenue		4,424

	Research and development		5,736

	Sales and marketing		6,102

	General and administrative		1,593

	Other expenses		136

		Total operating expenses	17,991

Operating income			15,838

Investment income			4,689

Gain on sale of MSN Sidewalk			230

Income before income taxes			20,757

Provision for income taxes			3,621

Net income			$ 17,136



Reconciliation to results presented in accompanying financial statements:


Net income - Canadian GAAP			$ 17,136

Acquired in-process technology			145

Visio Pooling			89

Tax benefit of stock options			(3,487	)

Net income - US GAAP			$ 13,883

This unaudited Consolidated Statement of Earnings has been converted from Microsoft's audited consolidated income statement into Canadian currency and adjusted for accounting principles and format that are generally accepted in Canada. This presentation differs in certain respects from generally accepted accounting principles in the United States that are used in Microsoft's primary financial statements and its filings with the United States Securities and Exchange Commission. The Microsoft 2000 Annual Report to Shareholders and the Form 10-K are available on this Web site or copies may be obtained by writing to the Company.