Final Term Sheet

Filed Pursuant to Rule 433

Registration Statement No. 333-155495

Final Term Sheet

February 3, 2011

MICROSOFT CORPORATION

2.500% Notes due 2016

4.000% Notes due 2021

5.300% Notes due 2041

 

Issuer:

    Microsoft Corporation   

Title of Securities:

    2.500% Notes due 2016 (the “2016 Notes”)   
   4.000% Notes due 2021 (the “2021 Notes”)   
   5.300% Notes due 2041 (the “2041 Notes” and, together   
   with the 2016 Notes and the 2021 Notes, the “Notes”)   

Aggregate Principal Amount

         

Offered:

    2016 Notes:    $750,000,000   
   2021 Notes:    $500,000,000   
   2041 Notes:    $1,000,000,000   

Price to Public (Issue Price):

    2016 Notes:    99.753% of principal amount   
   2021 Notes:    99.747% of principal amount   
   2041 Notes:    99.154% of principal amount   

Maturity Date:

    2016 Notes:    February 8, 2016   
   2021 Notes:    February 8, 2021   
   2041 Notes:    February 8, 2041   

Coupon (Interest Rate):

    2016 Notes:    2.500% per annum   
   2021 Notes:    4.000% per annum   
   2041 Notes:    5.300% per annum   

Benchmark Treasury:

    2016 Notes:    UST 2.000% due 01/31/2016   
   2021 Notes:    UST 2.625% due 11/15/2020   
   2041 Notes:    UST 3.875% due 08/15/2040   

Spread to Benchmark Treasury:

    2016 Notes:    0.38% (38 basis points)   
   2021 Notes:    0.48% (48 basis points)   
   2041 Notes:    0.68% (68 basis points)   

Benchmark Treasury

      

Price and Yield:

    2016 Notes:    99-06 / 2.173%
   2021 Notes:    92-13 / 3.551%
   2041 Notes:    87-07+ / 4.677%

Yield to Maturity:

    2016 Notes:    2.553%
   2021 Notes:    4.031%
   2041 Notes:    5.357%

Interest Payment Dates:

    Semi-annually on February 8 and August 8, beginning on August 8, 2011

Interest Payment Record Dates:

    February 1 and August 1 of each year

Type of Offering:

    SEC registered (No. 333-155495)

Net Proceeds to Issuer (before transaction expenses):

    2016 Notes:    $745,522,500
   2021 Notes:    $496,485,000
   2041 Notes:    $982,790,000

Trade Date:

    February 3, 2011

Settlement Date (T+3):

    February 8, 2011

Joint Book-Running Managers:

    Credit Suisse Securities (USA) LLC
   Merrill Lynch, Pierce, Fenner & Smith
                         Incorporated
   Goldman, Sachs & Co.
   HSBC Securities (USA) Inc.
   Morgan Stanley & Co. Incorporated
   RBS Securities Inc.

Co-Manager:

    The Williams Capital Group, L.P.

Listing:

    None   

CUSIP/ISIN:

    2016 Notes:    594918AK0 / US594918AK09
   2021 Notes:    594918AL8 / US594918AL81
   2041 Notes:    594918AM6 / US594918AM64

Long-Term Debt Ratings:

    Moody’s, Aaa (stable); S&P, AAA (stable)

 

Note: A securities rating is not a recommendation to buy, sell or hold securities and may be subject to revision or withdrawal at any time.

 

2

The issuer has filed a registration statement (including a prospectus) with the SEC for the offering to which this communication relates. Before you invest, you should read the prospectus in that registration statement and other documents the issuer has filed with the SEC for more complete information about the issuer and this offering. You may get these documents for free by visiting EDGAR on the SEC Web site at www.sec.gov. Alternatively, the issuer, any underwriter or any dealer participating in the offering will arrange to send you the prospectus if you request it by calling Credit Suisse Securities (USA) LLC toll free at 1-800-221-1037 or Merrill Lynch, Pierce, Fenner & Smith Incorporated toll-free at 1-800-294-1322.

 

3