Novell Releases Antitrust Claims for Netware and Agrees to Withdraw From
European Commission Case
REDMOND, Wash., Nov. 8 /PRNewswire-FirstCall/ -- Microsoft Corporation
(Nasdaq: MSFT) today announced that it has reached an agreement with Novell,
Inc. to resolve all antitrust claims as of today relating to Novell's NetWare
product and all of the other products and businesses which it currently owns.
The agreement results from a private mediation between the two companies.
As part of this agreement, Novell will release its antitrust claims under
U.S. and all other national and state laws concerning these products. Novell
will also withdraw from participation in the European Commission's case with
Microsoft and will no longer participate as an intervener on behalf of the
European Commission in Microsoft's appeal of the Commission's March 24 ruling.
Microsoft will pay Novell $536 million under the agreement, and Microsoft will
also release its compulsory counterclaims to those antitrust claims regarding
NetWare. The agreement does not obligate Microsoft to license or otherwise
share any of its technology or intellectual property rights with Novell, nor
does it include any admission of wrongdoing by Microsoft.
While the parties were able to resolve all antitrust claims related to
Novell's current businesses, including NetWare, they have not been able to
reach agreement concerning Novell's antitrust claims related to its ownership
of WordPerfect between June 1994 and March 1996. Novell retains the right to
pursue those claims. In addition, both parties retain the right to pursue past
or future patent claims.
"Over the past two years, we have made a sustained effort to build more
constructive relationships with our industry partners and competitors," said
Brad Smith, senior vice president and general counsel for Microsoft. "Today's
Netware settlement is a product of that effort and reflects an open dialogue
the companies established to address and ultimately resolve this matter. We
could not resolve claims related to WordPerfect in any manner we thought
appropriate, and we are prepared to turn to the courts to resolve it."
Due to the nature and timing of the settlement, the first quarter
financial results that were previously released on October 21, 2004 will be
updated to include the impact of the settlement. Net income and earnings per
share for the quarter were $2.53 billion and $0.23 respectively, including
$359 million ($536 million pre-tax) or $0.03 per share relating to the
settlement.
In light of recent progress in addressing antitrust litigation and claims
that have been made against Microsoft, including the recent developments with
Novell, the company believes that it can now estimate the additional antitrust
exposure that it is reasonably possible it will incur. The company estimates
that it is reasonably possible it will incur additional exposure of up to
$950 million for remaining antitrust claims, including $200 million above the
amount previously described in its most recent 10-K filing with the SEC
related to resolving remaining class action overcharge cases.
About Microsoft
Founded in 1975, Microsoft is the worldwide leader in software, services
and solutions that help people and businesses realize their full potential.
Forward-Looking Statements
Statements in this release that are "forward-looking statements" are based
on current expectations and assumptions that are subject to risks and
uncertainties. Actual results could differ materially because of factors such
as: entry into markets with vigorous competition, market acceptance of new
products and services, continued acceptance of existing products and services,
changes in licensing programs, product price discounts, delays in product
development and related product release schedules, sales channel disruption
such as the bankruptcy of a major distributor, and reliance on sole source
suppliers for key components of Xbox that could result in component shortages
and delays in product delivery, any of which may cause revenues and income to
fall short of anticipated levels; obsolete inventory or product returns by
distributors, resellers and retailers; warranty and other claims on hardware
products such as Xbox; changes in the rate of PC shipments; technological
shifts; the support of third party software developers for new or existing
platforms; the availability of competitive products or services such as the
Linux operating system at prices below our prices or for no charge; the
ability to have access to MSN service distribution channels that are
controlled by third parties; the risk of unanticipated increased costs for
network services; the continued ability to protect the company's intellectual
property rights; adverse effects on our business that might result if an
unauthorized disclosure of a significant portion of our source code were to
occur; the ability to obtain on acceptable terms the right to incorporate in
the company's products and services technology patented by others; changes in
product and service mix; maturing product life cycles; product sale terms and
conditions; the risk that actual or perceived security vulnerabilities in our
products could adversely affect our revenues; implementation of operating cost
structures that align with revenue growth; unavailability of insurance;
uninsured losses; adverse results in litigation; unanticipated tax
liabilities; the effects of terrorist activity and armed conflict such as
disruptions in general economic activity and changes in our operations and
security arrangements; the effects of a major earthquake, cyber-attack or
other catastrophic event that results in the destruction or disruption of any
of our critical business or information technology systems; the level of
corporate information technology spending and changes in general economic
conditions that affect demand for computer hardware or software; currency
fluctuations; and financial market volatility or other changes affecting the
value of our investments that may result in a reduction in carrying value and
recognition of losses including impairment charges.
For further information regarding risks and uncertainties associated with
Microsoft's business, please refer to the "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and "Issues and
Uncertainties" sections of Microsoft's SEC filings, including, but not limited
to, its annual report on Form 10-K and quarterly reports on Form 10-Q, copies
of which may be obtained by contacting Microsoft's investor relations
department at (800) 285-7772 or at Microsoft's investor relations website at
http://www.microsoft.com/msft.
All information in this release is as of November 8, 2004. The company
undertakes no duty to update any forward-looking statement to conform the
statement to actual results or changes in the company's expectations.
Microsoft is a registered trademark of Microsoft Corp. in the United
States and/or other countries.
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SOURCE Microsoft Corp.
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