BALANCE SHEETS

(In millions)
June 30 2003(1)
Assets
Current assets:
Cash and equivalents $6,438
Short-term investments 42,610
Total cash and short-term investments 49,048
Accounts receivable, net 5,196
Inventories 640
Deferred income taxes 2,506
Other 1,583
Total current assets 58,973
Property and equipment, net 2,223
Equity and other investments 13,692
Goodwill 3,128
Intangible assets, net 384
Deferred income taxes 2,161
Other long-term assets 1,171
Total assets $81,732
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable $1,573
Accrued compensation 1,416
Income taxes 2,044
Short-term unearned revenue 7,225
Other 1,716
Total current liabilities 13,974
Long-term unearned revenue 1,790
Other long-term liabilities 1,056
Commitments and contingencies
Stockholders’ equity:
Common stock and paid-in capital – shares authorized
24,000;outstanding 10,771 and 10,862 49,234
Retained earnings, including accumulated other
comprehensiveincome of $1,840 and $1,119 15,678
Total stockholders’ equity 64,912
Total liabilities and stockholders’ equity $81,732
 2004

$15,982
44,610
60,592
5,890
421
2,097
1,566
70,566
2,326
12,210
3,115
569
1,829
1,774
$92,389

$1,717
1,339
3,478
6,514
1,921
14,969
1,663
932

56,396

18,429
74,825
$92,389
 INCOME STATEMENTS
(In millions, except earnings per share)
Year Ended June 30 2002(1)
Revenue 28,365
Operating expenses:
Cost of revenue 5,699
Research and development 6,299
Sales and marketing 6,252
General and administrative 1,843
Total operating expenses 20,093
Operating income 8,272
Losses on equity investees and other (92)
Investment income/(loss) (305)
Income before income taxes 7,875
Provision for income taxes 2,520
Net income 5,355
Earnings per share:
Basic 0.50
Diluted 0.48
Weighted average shares outstanding:
Basic 10,811
Diluted 11,106
TS

2003(1) 2004
32,187 36,835

6,059 6,716
6,595 7,779
7,562 8,309
2,426 4,997
22,642 27,801
9,545 9,034
(68) (25)
1,577 3,187
11,054 12,196
3,523 4,028
7,531 8,168

0.70 0.76
0.69 0.75

10,723 10,803
10,882 10,894
 CASH FLOWS STATEMENTS
(In millions)
Year Ended June 30 2002(1)
Operations
Net income 5,355
Depreciation, amortization, and other noncash items 938
Stock-based compensation 3,784
Net recognized (gains)/losses on investments 2,424
Stock option income tax benefits 1,596
Deferred income taxes (1,580)
Unearned revenue 11,152
Recognition of unearned revenue (8,929)
Accounts receivable (1,623)
Other current assets (264)
Other long-term assets (9)
Other current liabilities 1,449
Other long-term liabilities 216
Net cash from operations 14,509
Financing
Common stock issued 1,497
Common stock repurchased (6,069)
Common stock dividend –
Net cash used for financing (4,572)
Investing
Additions to property and equipment (770)
Acquisition of companies, net of cash acquired –
Purchases of investments (89,386)
Maturities of investments 8,654
Sales of investments 70,657
Net cash used for investing (10,845)
Net change in cash and equivalents (908)
Effect of exchange rates on cash and equivalents 2
Cash and equivalents, beginning of period 3,922
Cash and equivalents, end of period 3,016
ENTS

2003(1) 2004

7,531 8,168
1,393 1,186
3,749 5,734
380 (1,296)
1,365 1,100
(894) (1,479)
12,519 11,777
(11,292) (12,527)
187 (687)
412 478
(28) 34
35 2,063
440 75
15,797 14,626

2,120 2,748
(6,486) (3,383)
(857) (1,729)
(5,223) (2,364)

(891) (1,109)
(1,063) (4)
(89,621) (92,495)
9,205 5,561
75,157 85,302
(7,213) (2,745)
3,361 9,517
61 27
3,016 6,438
6,438 15,982