Microsoft Corp. today announced record revenue of $12.54 billion for the quarter ended December 31, 2006, a 6% increase over the same period of the prior year. Operating income, net income and diluted earnings per share for the quarter were $3.47 billion, $2.63 billion and $0.26, respectively.

These results reflect the deferral of $1.64 billion of revenue and operating income, $1.13 billion of net income and $0.11 of diluted earnings per share from the second to the third fiscal quarter, due primarily to the technology guarantee programs that were announced on October 24, 2006 for Windows Vista� and the 2007 Microsoft� Office release. Revenue growth over the same period of the prior year would have been 14 percentage points higher before the technology guarantee programs.

�Results this quarter exceeded our expectations across the board, with revenue growth at or above our high end guidance for all divisions,� said Chris Liddell, chief financial officer at Microsoft. �Healthy PC and server markets as well as broad-based business and consumer demand for Microsoft offerings fueled revenue growth this quarter.�