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Technology Stocks : How high will Microsoft fly? -- Ignore unavailable to you. Want to Upgrade?

To: JC Jaros who wrote (47968)	7/18/2000 5:15:53 PM
From: SC	Respond to of 74651

JC, I think t2 is referring to the income that products generate (i.e. operating income) that is set aside for possible support issues. It is simply income that is deferred for tax purposes. This is not the same as income from investments which is part of earned income. Steve

To: JC Jaros who wrote (47968)	7/18/2000 5:26:51 PM
From: abbigail	Read Replies (2) \| Respond to of 74651

Dear Mr Jaros: Too bad you're not a MSFT INVESTOR. MSFT has invested add'l $200M this qtr, $800M this year in R&D. And add'l spending for sales & marketing $ 269M this qtr, $ 910M this year will generate HUGE returns. Kind of interesting to have you and your buddy CT sniffing around, in spite your feeble attempts at financial analysis. abbigail PS PMS Witch: These boys do offer SOME entertainment, no? abbigail

To: JC Jaros who wrote (47968)	7/18/2000 6:22:06 PM
From: rudedog	Read Replies (3) \| Respond to of 74651

JC - well, I guess I have to weigh in on the "unearned income" line, since we have had several completely uninformed opinions. Unearned income is not investment income or any nonsense like that - it is sale of product which will ship in the future. This is primarily from the future value of select agreements, which are corporate agreements to purchase software over a period of time, usually 3 years. Customers pre-pay a portion of those agreements ahead of time. This generates product revenue which MSFT has traditionally recognized as "unearned income" - it becomes earned income when the agreements are satisfied by product "shipments". These are not actual shipments - the select customer just tells MSFT what they have installed. Select agreements are administered by a Large Account Reseller or LAR who administers the contracts and manages payments from the select customers. So "unearned income" is real product revenue, with deferred recognition.