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Autodesk Reports Record Revenue of $620 Million in its Second Quarter of Fiscal 2009

SAN RAFAEL, Calif., Aug. 14 /PRNewswire-FirstCall/ -- Autodesk, Inc. (NASDAQ: ADSK) today reported revenue of $620 million for the second quarter of fiscal 2009, an increase of 18 percent over the second quarter of fiscal 2008. GAAP diluted earnings per share in the second quarter increased 3 percent to $0.39, compared to $0.38 per diluted share in the second quarter last year. Non-GAAP diluted earnings per share in the second quarter increased 27 percent to $0.56, compared to $0.44 per diluted share in the second quarter last year. A reconciliation between GAAP and non-GAAP results is provided at the end of this press release.

"We're very pleased that Autodesk was able to achieve another quarter of record revenue results," said Carl Bass, Autodesk president and CEO. "Our ability to serve diverse business segments globally with leading software design and engineering solutions drove our strong performance. The combination of a strong market position, industry and geographic diversification, a strong balance sheet, and excellent cash flow, positions Autodesk for continued success."

Operational Highlights

In addition to favorable currency exchange rates, Autodesk's performance in the second quarter of fiscal 2009 was driven by continued revenue growth of model-based 3D design solutions, 2D vertical products, emerging economies, as well as total upgrade and maintenance revenue growth.

Combined revenue from the Company's model-based 3D solutions, which includes Inventor, Revit, Civil 3D, NavisWorks, Robobat, and Moldflow, increased 36 percent over the second quarter of fiscal 2008 to $166 million and comprised 27 percent of total revenue for the quarter. Excluding Moldflow, which was acquired during the quarter, model-based 3D solutions grew 31 percent to $159 million. Autodesk shipped approximately 36,000 commercial seats of its model-based 3D design products, including approximately 10,000 commercial seats of Inventor and 26,000 seats of its Architecture Engineering and Construction products -- Revit, Civil 3D, NavisWorks, and Robobat. In addition, revenue from 2D vertical products increased 16 percent compared to the second quarter of fiscal 2008.

Revenue from the emerging economies increased 40 percent over the second quarter of fiscal 2008 to $114 million and represented 18 percent of total revenue. EMEA revenue was $267 million, an increase of 31 percent as reported over the second quarter of fiscal 2008, and 15 percent at constant currency. Revenue in Asia Pacific was $150 million, an increase of 18 percent as reported year-over-year, and 11 percent at constant currency. Revenue in the Americas increased 4 percent over the second quarter of fiscal 2008 to $203 million, despite continued economic headwinds.

Upgrade revenue and maintenance revenue combined increased 34 percent over the second quarter of fiscal 2008 to $238 million. Maintenance revenue increased 36 percent compared to the second quarter of fiscal 2008 to $180 million, or 29 percent of total revenue. Deferred maintenance revenue increased $14 million sequentially and $132 million compared to the second quarter of fiscal 2008. Total upgrade revenue increased 27 percent compared to the second quarter of fiscal 2008.

Business Outlook

The following statements are forward-looking statements which are based on current expectations and which involve risks and uncertainties some of which are set forth below.

Third Quarter Fiscal 2009

Net revenue for the third quarter of fiscal 2009 is expected to be in the range of $625 million and $635 million. GAAP earnings per diluted share are expected to be in the range of $0.40 and $0.42. Non-GAAP earnings per diluted share are expected to be in the range of $0.54 and $0.56 and exclude $0.07 related to stock-based compensation expense and $0.07 for the amortization of acquisition related intangibles.

Fourth Quarter Fiscal 2009

Net revenue for the fourth quarter of fiscal 2009 is expected to be in the range of $660 million and $680 million. GAAP earnings per diluted share are expected to be in the range of $0.52 and $0.56. Non-GAAP earnings per diluted share are expected to be in the range of $0.64 and $0.68 and exclude $0.08 related to stock-based compensation expense and $0.04 for the amortization of acquisition related intangibles.

Full Year Fiscal 2009

For fiscal year 2009, net revenue is expected to be in the range of $2.50 billion and $2.53 billion. Full year GAAP earnings per diluted share are now expected to be in the range of $1.72 and $1.78. Non-GAAP earnings per diluted share are still expected to be in the range of $2.24 and $2.30 and exclude $0.29 related to stock-based compensation expense and $0.23 for the amortization of acquisition related intangibles and in-process research and development expense.

Safe Harbor Statement

This press release contains forward-looking statements that involve risks and uncertainties, including statements in the paragraphs under "Business Outlook" above, statements regarding anticipated market trends and other statements regarding our expected performance and results. Other factors that could cause actual results to differ materially include the following: general market and business conditions, our performance in particular geographies, including emerging economies, difficulties encountered in integrating new or acquired businesses and technologies, the inability to identify and realize the anticipated benefits of acquisitions, fluctuation in foreign currency exchange rates, unexpected fluctuations in our tax rate, the timing and degree of expected investments in growth opportunities, slowing momentum in maintenance revenues, failure to achieve sufficient sell-through in our channels for new or existing products, pricing pressure, failure to achieve continued cost reductions and productivity increases, failure to achieve continued migration from 2D products to 3D products, changes in the timing of product releases and retirements, failure of key new applications to achieve anticipated levels of customer acceptance, failure to achieve continued success in technology advancements, the financial and business condition of our reseller and distribution channels, interruptions or terminations in the business of the Company's consultants or third party developers, and unanticipated impact of accounting for technology acquisitions.

Further information on potential factors that could affect the financial results of Autodesk are included in the Company's reports on Form 10-K for the year ended January 31, 2008 and our Form 10-Q for the quarter ended April 30, 2008, which are on file with the Securities and Exchange Commission. Autodesk does not assume any obligation to update the forward-looking statements provided to reflect events that occur or circumstances that exist after the date on which they were made.

Earnings Conference Call and Webcast

Autodesk will host its second quarter conference call today at 5:00 p.m. EDT. The live announcement may be accessed at http://www.autodesk.com/investors or by dialing 866-700-7477 or 617-213-8840 (passcode: 68223258). An audio webcast or podcast of the call will be available at 7:00 pm EDT at http://www.autodesk.com/investors. This replay will be maintained on our website for at least twelve months. An audio replay will also be available for one month beginning at 7:00 pm EDT by dialing 888-286-8010 or 617-801-6888 (passcode: 93009896).

About Autodesk

Autodesk, Inc. is the world leader in 2D and 3D design software for the manufacturing, building and construction, and media and entertainment markets. Since its introduction of AutoCAD software in 1982, Autodesk has developed the broadest portfolio of state-of-the-art digital prototyping solutions to help customers experience their ideas before they are real. Fortune 1000 companies rely on Autodesk for the tools to visualize, simulate and analyze real-world performance early in the design process to save time and money, enhance quality and foster innovation. For additional information about Autodesk, visit http://www.autodesk.com.

Note: AutoCAD, Autodesk, Civil 3D, Inventor, Revit, NavisWorks, and Robobat are either registered trademarks or trademarks of Autodesk, Inc., in the US and/or other countries. All other brand names, product names or trademarks belong to their respective holders.

     Investors:  David Gennarelli, david.gennarelli@autodesk.com, 415-507-6033
                 Katie Blanchard, katherine.blanchard@autodesk.com,
                 415-507-6034

     Press:      Pam Pollace, pam.pollace@autodesk.com, 415-547-2441
                 Colleen Rubart, colleen.rubart@autodesk.com, 415-547-2368



    Autodesk, Inc.
    Consolidated Statements of Income
    (In millions, except per share data)


                                         Three Months Ended   Six Months Ended
                                              July 31,             July 31,
                                            2008    2007        2008     2007
                                             (Unaudited)        (Unaudited)
    Net revenue:
       License and other                  $440.2  $393.6      $872.4   $776.7

       Maintenance                         179.3   132.3       345.9    257.7

          Total net revenue                619.5   525.9     1,218.3  1,034.4

    Cost of license and other revenue       57.4    49.6       113.2    100.1

    Cost of maintenance revenue              2.1     2.3         4.1      4.4

       Total cost of revenue                59.5    51.9       117.3    104.5

       Gross margin                        560.0   474.0     1,101.0    929.9

    Operating Expenses:

       Marketing and sales                 228.8   198.8       452.7    391.3

       Research and development            153.2   114.9       296.9    229.6

       General and administrative           59.2    45.8       112.7     93.1

          Total operating expenses         441.2   359.5       862.3    714.0

    Income from operations                 118.8   114.5       238.7    215.9

    Interest and other income, net           6.3     3.4        13.2     13.2

    Income before income taxes             125.1   117.9       251.9    229.1

    Provision for income taxes             (35.3)  (26.3)      (67.5)   (54.2)

    Net income                             $89.8   $91.6      $184.4   $174.9

    Basic net income per share             $0.40   $0.40       $0.82    $0.76

    Diluted net income per share           $0.39   $0.38       $0.80    $0.72

    Shares used in computing basic
     net income per share                  224.2   230.3       225.2    230.8

    Shares used in computing diluted
     net income per share                  231.1   243.0       232.1    243.7



    Autodesk, Inc.
    Condensed Consolidated Balance Sheets
    (In millions)
                                                  July 31,         January 31,
                                                    2008               2008
                                                 (Unaudited)
    ASSETS:

    Current assets:
      Cash and cash equivalents                     $929.6            $917.9
      Marketable securities                           32.6              31.4
      Accounts receivable, net                       325.2             386.5
      Deferred income taxes                           58.2              98.1
      Prepaid expenses and other current
       assets                                         56.9              47.9
    Total current assets                           1,402.5           1,481.8

    Marketable securities                              8.3               8.4
    Computer equipment, software, furniture and
     leasehold improvements, net                     109.2              80.2
    Purchased technologies, net                      106.2              64.4
    Goodwill                                         626.9             443.4
    Deferred income taxes, net                        67.5              54.6
    Other assets                                     122.9              79.4
                                                  $2,443.5          $2,212.2


    LIABILITIES AND STOCKHOLDERS' EQUITY:

    Current liabilities:
      Accounts payable                               $78.1             $79.3
      Accrued compensation                           108.0             146.2
      Accrued income taxes                            21.2              14.4
      Deferred revenue                               440.7             400.7
      Borrowings under line of credit                120.0               -
      Other accrued liabilities                      101.0              89.7
    Total current liabilities                        869.0             730.3

    Deferred revenue                                 121.9             105.4
    Long term income taxes payable                   101.4              86.5
    Long term deferred income taxes                   29.2               3.3
    Other liabilities                                 62.1              56.2

    Commitments and contingencies

    Stockholders' equity:
      Preferred stock                                  -                 -
      Common stock and additional paid-in capital    997.6             998.3
      Accumulated other comprehensive income          19.9              13.8
      Retained earnings                              242.4             218.4
    Total stockholders' equity                     1,259.9           1,230.5
                                                  $2,443.5          $2,212.2



    Autodesk, Inc.
    Condensed Consolidated Statements of Cash Flows
    (In millions)
                                                       Six Months Ended
                                                           July 31,
                                                    2008              2007
                                                          (Unaudited)
    Operating Activities
      Net income                                   $184.4            $174.9
      Adjustments to reconcile net income
       to net cash provided by operating
       activities:
           Depreciation and amortization             39.1              28.6
           Stock-based compensation expense          48.4              35.9
           Charge for acquired in-process
            research and development                 16.8               1.0
           Changes in operating assets
            and liabilities, net of business
            combinations                            105.1              87.8
    Net cash provided by operating activities       393.8             328.2

    Investing Activities
      Purchases of available-for-sale marketable
       securities                                    (5.6)           (705.7)
      Sales of available-for-sale marketable
       securities                                     4.7             765.7
      Business combinations, net of cash acquired  (257.5)            (21.3)
      Capital and other expenditures                (39.9)            (18.2)
    Net cash provided by (used in) investing
     activities                                    (298.3)             20.5

    Financing activities
      Proceeds from issuance of common
       stock, net of issuance costs                  50.1              83.8
      Draws on line of credit                       690.0               -
      Repayments of line of credit                 (570.0)              -
      Repurchases of common stock                  (256.5)           (325.1)
    Net cash used in financing activities           (86.4)           (241.3)

    Effect of exchange rate changes on
     cash and cash equivalents                        2.6               1.6

    Net increase in cash and cash equivalents        11.7             109.0
    Cash and cash equivalents at beginning of
     fiscal year                                    917.9             665.9
    Cash and cash equivalents at end of period     $929.6            $774.9



    Autodesk, Inc.
    Reconciliation of GAAP financial measures to non-GAAP financial measures
    (In millions, except per share data)

    To supplement our consolidated financial statements presented on a GAAP
    basis, Autodesk provides investors with certain non-GAAP measures
    including non-GAAP net income, non-GAAP net income per share, non-GAAP
    cost of license and other revenue, non-GAAP gross margin, non-GAAP
    operating expenses, non-GAAP income from operations, non-GAAP interest
    and other income, net and non-GAAP provision for income taxes.  These
    non-GAAP financial measures are adjusted to exclude certain costs,
    expenses, gains and losses, including stock-based compensation expense,
    employee tax reimbursements related to our stock option review,
    litigation expenses, in-process research and development expenses,
    restructuring expenses, amortization of purchased intangibles, investment
    impairment and income tax expenses.  See our reconciliation of GAAP
    financial measures to non-GAAP financial measures herein.  We believe
    these exclusions are appropriate to enhance an overall understanding of
    our past financial performance and also our prospects for the future, as
    well as to facilitate comparisons with our historical operating results.
    These adjustments to our GAAP results are made with the intent of
    providing both management and investors a more complete understanding of
    Autodesk's underlying operational results and trends and our marketplace
    performance.  For example, the non-GAAP results are an indication of our
    baseline performance before gains, losses or other charges that are
    considered by management to be outside our core operating results.  In
    addition, these non-GAAP financial measures are among the primary
    indicators management uses as a basis for our planning and forecasting of
    future periods.

    There are limitations in using non-GAAP financial measures because the
    non-GAAP financial measures are not prepared in accordance with generally
    accepted accounting principles and may be different from non-GAAP
    financial measures used by other companies.  The non-GAAP financial
    measures are limited in value because they exclude certain items that may
    have a material impact upon our reported financial results.  The
    presentation of this additional information is not meant to be considered
    in isolation or as a substitute for the directly comparable financial
    measures prepared in accordance with generally accepted accounting
    principles in the United States.  Investors should review the
    reconciliation of the non-GAAP financial measures to their most directly
    comparable GAAP financial measures as provided in the tables accompanying
    this press release.

    The following table shows Autodesk's non-GAAP results reconciled to
    GAAP results included in this release.


                                        Three Months Ended  Six Months Ended
                                             July 31,           July 31,
                                            2008    2007      2008     2007
                                            (Unaudited)        (Unaudited)

    GAAP cost of license and other revenue $57.4   $49.6    $113.2  $100.1
    SFAS 123R stock-based compensation
     expense                                (1.1)   (1.1)     (2.1)   (1.7)
    Amortization of developed technology    (5.3)   (2.1)     (8.8)   (4.2)
    Employee tax reimbursements related
     to stock option review                  -       -         -      (1.1)
    Non-GAAP cost of license and other
     revenue                               $51.0   $46.4    $102.3   $93.1

    GAAP gross margin                     $560.0  $474.0  $1,101.0  $929.9
    SFAS 123R stock-based compensation
     expense                                 1.1     1.1       2.1     1.7
    Amortization of developed technology     5.3     2.1       8.8     4.2
    Employee tax reimbursements related
     to stock option review                  -       -         -       1.1
    Non-GAAP gross margin                 $566.4  $477.2  $1,111.9  $936.9

    GAAP marketing and sales              $228.8  $198.8    $452.7  $391.3
    SFAS 123R stock-based compensation
     expense                               (10.0)   (9.0)    (20.5)  (15.2)
    Employee tax reimbursements related
     to stock option review                  -       -         -      (4.8)
    Non-GAAP marketing and sales          $218.8  $189.8    $432.2  $371.3

    GAAP research and development         $153.2  $114.9    $296.9  $229.6
    SFAS 123R stock-based compensation
     expense                                (7.7)   (6.5)    (16.1)  (11.3)
    In-process research and development    (16.8)   (1.0)    (16.8)   (1.0)
    Employee tax reimbursements related
     to stock option review                  -       -         -      (4.4)
    Non-GAAP research and development     $128.7  $107.4    $264.0  $212.9

    GAAP general and administrative        $59.2   $45.8    $112.7   $93.1
    SFAS 123R stock-based compensation
     expense                                (4.4)   (4.5)     (9.7)   (7.7)
    Amortization of customer
     relationships and trademarks           (6.4)   (2.0)     (9.3)   (3.9)
    Employee tax reimbursements related
     to stock option review                  -       -         -      (1.7)
    Non-GAAP general and administrative    $48.4   $39.3     $93.7   $79.8

    GAAP operating expenses               $441.2  $359.5    $862.3  $714.0
    SFAS 123R stock-based compensation
     expense                               (22.1)  (20.0)    (46.3)  (34.2)
    Employee tax reimbursements related
     to stock option review                  -       -         -     (10.9)
    Amortization of customer
     relationships and trademarks           (6.4)   (2.0)     (9.3)   (3.9)

    In-process research and development    (16.8)   (1.0)    (16.8)   (1.0)
    Non-GAAP operating expenses           $395.9  $336.5    $789.9  $664.0

    GAAP income from operations           $118.8  $114.5    $238.7  $215.9
    SFAS 123R stock-based compensation
     expense                                23.2    21.1      48.4    35.9
    Employee tax reimbursements related
     to stock option review                  -       -         -      12.0
    Amortization of developed technology     5.3     2.1       8.8     4.2
    Amortization of customer
     relationships and trademarks            6.4     2.0       9.3     3.9
    In-process research and development     16.8     1.0      16.8     1.0
    Non-GAAP income from operations       $170.5  $140.7    $322.0  $272.9

    GAAP provision for income taxes       $(35.3) $(26.3)   $(67.5) $(54.2)
    Income tax effect on difference
     between GAAP and non-GAAP total
     costs and expenses at a normalized
     rate                                  (11.2)   (9.4)    (20.3)  (16.7)
    Non-GAAP provision for income taxes   $(46.5) $(35.7)   $(87.8) $(70.9)

    GAAP net income                        $89.8   $91.6    $184.4  $174.9
    SFAS 123R stock-based compensation
     expense                                23.2    21.1      48.4    35.9
    Employee tax reimbursements related
     to stock option review                  -       -         -      12.0
    Amortization of developed technology     5.3     2.1       8.8     4.2
    Amortization of customer
     relationships and trademarks            6.4     2.0       9.3     3.9
    In-process research and development     16.8     1.0      16.8     1.0
    Income tax effect on difference
     between GAAP and non-GAAP total
     costs and expenses at a normalized
     rate                                  (11.2)   (9.4)    (20.3)  (16.7)
    Non-GAAP net income                   $130.3  $108.4    $247.4  $215.2

    GAAP diluted net income per share      $0.39   $0.38     $0.80   $0.72
    SFAS 123R stock-based compensation
     expense                                0.10    0.09      0.21    0.15
    In-process research and development     0.07     -        0.07     -
    Employee tax reimbursements related
     to  stock option review                 -       -         -      0.05
    Amortization of developed technology    0.02    0.01      0.03    0.02
    Amortization of customer
     relationships and trademarks           0.03     -        0.04    0.01
    Income tax effect on difference
     between GAAP and non-GAAP total
     costs and expenses at a normalized
     rate                                  (0.05)  (0.04)    (0.09)  (0.07)
    Non-GAAP diluted net income per share  $0.56   $0.44     $1.06   $0.88

    GAAP diluted shares used in per share
     calculation                           231.1   243.0     232.1   243.7
    Impact of SFAS 123R on diluted shares    0.8     1.3       0.5     1.3
    Non-GAAP diluted shares used in per
     share calculation                     231.9   244.3     232.6   245.0



                   Other Supplemental Financial Information (1)
    Fiscal Year 2009              QTR 1        QTR 2   QTR 3 QTR 4   YTD 2009
    Financial Statistics
     (in millions, except
     per share data):
    Total net revenue              $599         $620                   $1,218
      License and other revenue    $432         $440                     $872
      Maintenance revenue          $167         $180                     $346

    Gross Margin - GAAP             90%          90%                      90%
    Gross Margin - Non-GAAP         91%          91%                      91%

    GAAP Operating Expenses        $421         $441                     $862
    GAAP Operating Margin           20%          19%                      20%
    GAAP Net Income                 $95          $90                     $184
    GAAP Diluted Net Income
     Per Share                    $0.41        $0.39                    $0.80

    Non-GAAP Operating
     Expenses  (2)(3)              $394         $396                     $790
    Non-GAAP Operating
     Margin  (2)(4)                 25%          28%                      26%
    Non-GAAP Net Income (2)(5)     $117         $130                     $247
    Non-GAAP Diluted Net
     Income Per Share (2)(6)      $0.50        $0.56                    $1.06

    Total Cash and
     Marketable Securities         $950         $970                     $970
    Days Sales Outstanding           51           48                       48
    Capital Expenditures            $14          $26                      $40
    Cash from Operations           $185         $209                     $394
    GAAP Depreciation and
     Amortization                   $17          $22                      $39

    Deferred Maintenance
     Revenue Balance               $474         $488                     $488

    Revenue by Geography
     (in millions):
    Americas                       $191         $203                     $394
    Europe                         $259         $267                     $526
    Asia/Pacific                   $149         $150                     $298

    Revenue by Segment (in
     millions):
    Platform Solutions and
     Emerging Business and Other   $278         $270                     $548
    Architecture, Engineering
     and Construction              $129         $144                     $273
    Manufacturing Solutions        $119         $131                     $250
    Media and Entertainment         $67          $69                     $136
    Other                            $6           $6                      $11

    Other Revenue Statistics:
    % of Total Rev from
     AutoCAD and AutoCAD LT         41%          35%                      38%
    % of Total Rev from 3D
     design products                24%          26%                      25%
    % of Total Rev from
     Emerging Economies             17%          18%                      18%
    Upgrade Revenue (in millions)   $61          $58                     $119

    Favorable (Unfavorable) Impact
     of U.S. Dollar Translation
     Relative to Foreign
     Currencies Compared to
     Comparable Prior Year Period
     (in millions):
    FX Impact on Total Net Revenue  $41          $42                      $83
    FX Impact on Total Operating
     Expenses                      $(14)        $(11)                    $(25)
    FX Impact on Total Net Income   $27          $31                      $58

    Gross Margin by Segment
     (in millions):
    Platform Solutions and
     Emerging Business and
     Other                         $263         $255                     $518
    Architecture,
     Engineering and
     Construction                  $119         $133                     $252
    Manufacturing Solutions        $110         $122                     $232
    Media and Entertainment         $50          $52                     $102
    Unallocated amounts             $(1)         $(2)                     $(3)

    Common Stock
     Statistics:
    GAAP Shares Outstanding 223,616,000  224,528,000              224,528,000
    GAAP Fully Diluted
     Weighted Average
     Shares Outstanding     232,607,000  231,078,000              232,097,000
    Shares Repurchased        8,001,000          -                  8,001,000

    Installed Base
     Statistics:
    Total AutoCAD-based
     Installed Base           4,377,000    4,436,000                4,436,000
    Total Inventor
     Installed Base             794,000      819,000                  819,000
    Total Maintenance
     Installed Base           1,587,000    1,644,000                1,644,000


    (1) Totals may not agree with the sum of the components due to rounding.

    (2) To supplement our consolidated financial statements presented on a
    GAAP basis, Autodesk provides investors with certain non-GAAP measures
    including non-GAAP net income, non-GAAP net income per share, non-GAAP
    cost of license and other revenue, non-GAAP gross margin, non-GAAP
    operating expenses, non-GAAP income from operations, non-GAAP interest and
    other income, net and non-GAAP provision for income taxes.  These non-GAAP
    financial measures are adjusted to exclude certain costs, expenses, gains
    and losses, including stock-based compensation expense, employee tax
    reimbursements related to our stock option review, litigation expenses,
    in-process research and development expenses, restructuring expenses,
    amortization of purchased intangibles, investment impairment and income
    tax expenses.  See our reconciliation of GAAP financial measures to
    non-GAAP financial measures herein.  We believe these exclusions are
    appropriate to enhance an overall understanding of our past financial
    performance and also our prospects for the future, as well as to
    facilitate comparisons with our historical operating results.  These
    adjustments to our GAAP results are made with the intent of providing both
    management and investors a more complete understanding of Autodesk's
    underlying operational results and trends and our marketplace performance.
    For example, the non-GAAP results are an indication of our baseline
    performance before gains, losses or other charges that are considered by
    management to be outside our core operating results.  In addition, these
    non-GAAP financial measures are among the primary indicators management
    uses as a basis for our planning and forecasting of future periods.

    There are limitations in using non-GAAP financial measures because the
    non-GAAP financial measures are not prepared in accordance with generally
    accepted accounting principles and may be different from non-GAAP
    financial measures used by other companies.  The non-GAAP financial
    measures are limited in value because they exclude certain items that may
    have a material impact upon our reported financial results.  The
    presentation of this additional information is not meant to be considered
    in isolation or as a substitute for the directly comparable financial
    measures prepared in accordance with generally accepted accounting
    principles in the United States.  Investors should review the
    reconciliation of the non-GAAP financial measures to their most directly
    comparable GAAP financial measures as provided in the tables accompanying
    this press release.

    Fiscal Year 2009              QTR 1        QTR 2   QTR 3 QTR 4   YTD 2009


    (3) GAAP Operating Expenses    $421         $441                     $862
         Stock-based compensation
          expense                   (24)         (22)                     (46)
         Amortization of customer
          relationships and
          trademarks                 (3)          (6)                      (9)
         In-process research and
          development               -            (17)                     (17)
         Non-GAAP Operating
          Expenses                 $394         $396                     $790

    (4) GAAP Operating Margin       20%          19%                      20%
         Stock-based compensation
          expense                    4%           4%                       4%
         Amortization of developed
          technology                 1%           1%                       0%
         Amortization of customer
          relationships and
          trademarks                 1%           1%                       1%
         In-process research and
          development                0%           3%                       1%
         Non-GAAP Operating Margin  25%          28%                      26%

    (5) GAAP Net Income             $95          $90                     $184
         Stock-based compensation
          expense                    25           23                       48
         Amortization of developed
          technology                  4            5                        9
         Amortization of customer
          relationships and
          trademarks                  3            6                        9
         In-process research and
          development               -             17                       17
         Income tax effect on
          difference between GAAP
          and non-GAAP total costs
          and expenses at a
          normalized rate            (9)         (11)                     (20)
         Non-GAAP Net Income       $117         $130                     $247

    (6) GAAP Diluted Net
         Income Per Share         $0.41        $0.39                    $0.80
         Stock-based compensation
          expense                  0.11         0.10                     0.21
         Amortization of developed
          technology               0.01         0.02                     0.03
         Amortization of customer
          relationships and
          trademarks               0.01         0.03                     0.04
         In-process  research and
          development               -           0.07                     0.07
         Income tax effect on
          difference between GAAP
          and non-GAAP total costs
          and expenses at a
          normalized rate         (0.04)       (0.05)                   (0.09)
         Non-GAAP Diluted
          Net Income Per Share    $0.50        $0.56                    $1.06

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