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General Meeting 1

January 22, 2013

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Meeting Agenda

Points System

Semester at A Glance & Meeting Structure

Market Overview

Question of the Day

Pitch Sign-Ups

Pitch

Announcements

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Market News

DavosWorld Economic Forum

Very Confident CEOs36%

Crisis is new normal

Microsoft may invest in Dell

Equities hover at 5-year highs

72% of earnings exceed estimates

Google Profit Rises on year-end ad gains

Apple braces for first profit drop since 2003

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S&P 500

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NASDAQ

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Commodities

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Can We Get Much Higher?

The Standard & Poors 500 Index is 5.1 percent belowthe all-time high in October 2007. Profits in thebenchmark gauge are forecast to exceed $1 trillion thisyear, or 31 percent more than when the gauge peaked,according to more than 11,000 analyst estimatescompiled by Bloomberg. Even if the price- earnings ratio,now 9.8 percent below the six-decade mean, doesntexpand, the S&P 500 is poised to recover fully from thefinancial crisis that began almost six years ago.

-Bloomberg

Jan. 21, 2013

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Investment Thesis Looking for a stable company with an established

reputation.

Microsofts usage of Office as a competitivedifferentiator for its hardware products has beenwell received and has opened up a marketopportunity.

With Windows 8, SkyDrive, and Office 2013,Microsoft is creating an ecosystem that links allyour devices together, and streamlines the entireexperience.

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Company Overview5 Primary Business Segments: Windows and Windows Live

Servers and Tools

Software

Online Services

Entertainment and Devices

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Windows and Windows

Live Comprised of the Windows operating system and Microsoft brandedhardware

75% of segment revenue comes from operating system license sales

Software competition comes from Apple, Google, and open-sourceofferings

Hardware competition comes from Dell, HP, Lenovo, Apple, Samsung

Strengths include ease of use, security, compatibility, and supportnetworks

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Servers and Tools Makes IT professionals systems more productive and efficient 80% of revenue from servers, SQL, Azure, 20% of revenue from

enterprise services

Competition from HP, IBM, and Oracle as well as Amazon and Googlein cloud services

Strengths include performance and total cost of ownership

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Microsoft Business Division Software and online services to increase productivity 90% of revenue from Microsoft Office, 10% from Microsoft Dynamics

business solutions

Competition from Adobe, Apple, Cisco, SAP

Strengths include security, ease of use, historical usage, compatibility

with existing technology

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Online Services Provides online content and connects advertisers to audiences Covers Bing search engine and Microsoft Network (MSN)

Competition from Google in search engine

Strengths include prepackaging services into the Windows operatingsystem through Original Equipment Manufacturer deals

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Entertainment and Devices Covers Xbox 360, Skype, Windows Phones, video game publishing,Xbox Live, Accessories

Covers Bing search engine and Microsoft Network (MSN)

Competition from Sony, Nintendo

Strengths include exclusive game content, Xbox Live player networks

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Microsoft Features One platform across PC, tablet, phone, servers, and cloud Unlike other companies, Microsoft unites everything under one operating

system

Possible to select a movie from a PC, start playing it on the TV and finish

watching on a tablet.

Office redesigned for Windows 8

Touch and pen capabilities

Offerings on new tablets

Cloud Services

SkyDrive

Take notes, annotate documents, and share information using a Windows 8tablet, OneNote, and SkyDrive

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Financial Summary

6042058437

62484

69943

73723

40000

45000

50000

55000

60000

65000

70000

75000

80000

2008 2009 2010 2011 2012

Revenue

24071

20693

24098

2716127956

15000

17000

19000

21000

23000

25000

27000

29000

2008 2009 2010 2011 2012

Operating Income

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Liquidity Summary

21612

19037

24073

26994

31626

0

5000

10000

15000

20000

25000

30000

35000

2008 2009 2010 2011 2012

Cash from Operations

1.446898

1.822889

2.129345

2.603669 2.602912

0

0.5

1

1.5

2

2.5

3

2008 2009 2010 2011 2012

Current Ratio

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Revenue BreakdownsBusiness Segments

Windows & Windows

Live

Server and Tools

Online Services

Microsoft Business

Entertainment and

Devices

Corporate and Other

Geographic Segments

United States

Other Countries

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CompsEnterprise Multiples Pricing Multiples

LTM EV/Revenue LTM EV/EBITDA LTM EV/EBIT NTM EV/EBITDA LTM P/E NTM P/E LTM P/BV

High 8.3x 59.9x 287.1x 27.9x 54.9x 216.6x 24.6x

Low 0.3x 4.5x 6.0x 4.2x 8.7x 8.1x 3.0x

Mean 3.0x 15.5x 40.8x 9.8x 19.2x 33.8x 12.2x

Median 2.3x 9.0x 10.9x 7.0x 14.0x 11.7x 10.1x

LTM EV/Revenue LTM EV/EBITDA LTM EV/EBIT NTM EV/EBITDA LTM P/E NTM P/E LTM P/BV

High $77.50 $211.40 $895.50 $75.20 $102.63 $658.10 $148.75

Low $9.30 $21.90 $24.90 $9.96 $16.35 $24.49 $18.11

Mean $32.10 $59.30 $132.70 $32.75 $36.00 $102.82 $73.98

Median $25.80 $37.10 $40.10 $28.78 $26.14 $35.56 $61.40

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Discounted Cash Flow

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Announcements

Texas Investment Conference

Wall Street Journal

Improvement Surveys Texas Investment Conference

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