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ANNOUNCER: Please welcome Senior Director of Investor Relations Colleen Healy. (Applause.)

COLLEEN HEALY: Welcome. Great to see everybody. Thanks so much for making the trip out. On behalf of Microsoft Investor Relations and all the executives today, a very, very warm welcome.

Throughout the day, we will look back at our performance, and also forward to where we're going in fiscal year '06 and beyond. As such, we may make forward-looking statements. You should refer to our SEC filings for the risk factors relating to our business.

Fiscal year '05 was a good year for Microsoft. We had $3 billion of revenue growth and double-digit bookings, which we're very excited about. At this time last year we announced our tax distribution plan, and in fiscal year '05 alone we distributed $44 billion to shareholders through buybacks and dividends.

Looking forward to fiscal year '06, we expect double-digit growth, and fiscal year '06 for us really kicks off a multiyear product cycle that you're going to hear more about today directly from the business leaders.

Today from our business leaders, you're going to hear about such exciting innovations as Windows Vista, “Office 12,” SQL Server, Visual Studio, Xbox 360, the Windows Mobile platform, CRM, and our MSN properties.

Microsoft is poised for accelerating growth through innovation, and today's presentations will provide you with the insights, the innovations, and the drivers fueling our growth.

Today's lineup is really exciting. We're going to have the day start with Steve Ballmer, who will walk you through a map of where we're going and how we're going to get there with our innovations.

And then I'm really excited for our second presentation, where we're going to have two esteemed visionaries of technology and business, Bill Gates and Ray Ozzie, have a chat that you'll be able to sit in on.

And then our business leaders will walk you through the innovations coming from their teams and the drivers of growth in each of their businesses.

Chris Liddell will then share with you his views on driving shareholder value, and we'll end the day, as we normally do, with Bill, Steve, and Chris taking your questions.

The communications network Internet should be up and running for those here on site. If you're having trouble connecting to the CommNet, raise your yellow flag or your surrender flag, and someone from the TechNet group will help you out. The CommNet site will have a map of the locations, agenda, and PowerPoint slides if you want to take notes as you go along. And then when you're back in your office on the Microsoft Web site, you can view the PowerPoints and transcripts.

Today's event is being Webcast live on the Microsoft Investor Relations Web site at www.microsoft.com/MSFT.

A few more housekeeping matters: Across the way is the product fair in the Rainier Room. During breaks and at lunch, please have a visit, and you can see some of our technologies being demoed.

Through the facility you may have noticed that there are some large screens that have stock quotes so that you can keep in touch with the market today, and I know some companies are announcing earnings that you'll probably want to keep an eye on. And we also have Internet kiosks throughout the building that you can log onto and check your e-mail, check the news, and check stock quotes.

For those who drove today, you need to register your car; we don't want it to be towed, and we've got a diligent security staff. If you haven't registered your car, please do so at the registration desk, which can help you.

Those of you already thinking about lunch: Lunch will be served in the McKinley Room. It will be a buffet lunch and will be an opportunity for our executives to interact with you and chat with you over a bite to eat.

The tables will have business group placards on them, so if there is a particular business group that you're most interested in drilling a bit more into today, you may want to sit at that table.

For those of you already thinking about cocktails, I'm a little worried, but there is a cocktail reception at the end of the day, and our executives are looking forward to again having an opportunity to interact with you, and that will be back in the McKinley Room.

If you're catching a flight tonight, we will, as usual, have shuttle buses going to the airport, leaving at 7.

On the infamous CommNet Web site, and I see no yellow flags, so that's good, most of you, it looks like, have access. You will be able to fill out an evaluation form, and we encourage you to do that. It's really the best way that our speakers can get feedback on how effective they were and what you'd like to see going forward for this event.

As an incentive, we've got some great prizes. For every speaker for whom you fill out the eval form, you're entered into a contest to win some prizes, and here in the fine state of Washington we encourage you to vote early and often; the more speakers you give evals for, the higher your odds.

So what are the fantastic prizes? Two packages of the Xbox games that you'll hear a bit about today, a Smart Watch, an Audiovox Smartphone, Creative Zen Portal Media Center, and a Tablet PC. If you win the tablet, you'll have to share a portion of its value with Uncle Sam.

The Investor Relations team is, of course, here today, and we're happy to be of help if we can in any way help you to really leverage the day and get the most out of the day. I see folks sort of around the room: Joe Binz, Leona Locke, Dennie Muscarella, Alan Pickerill, Michelle Sutter, Charly Tracy, Tracy Zettner, and a guest appearance by Curt Anderson, who's here with us today as well.

So with all of that, it gives me great pleasure to introduce to you our first speaker, Microsoft's CEO, Steve Ballmer. (Applause.)

END

Due to the varying sound quality and subject matter of tapes, the information in this transcript may contain inaccuracies.