<PAGE>

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                             ---------------------

                                  FORM 10-K/A
                               (AMENDMENT NO. 1)

                 ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                  FOR THE FISCAL YEAR ENDED DECEMBER 31, 2004

                        COMMISSION FILE NUMBER: 33-64732

                             ---------------------

                                   SPSS INC.
             (Exact name of registrant as specified in its charter)

<Table>
<S>                                            <C>
                   DELAWARE                                      36-2815480
       (State or other jurisdiction of                         (IRS Employer
        incorporation or organization)                      Identification No.)
</Table>

                  233 S. WACKER DRIVE, CHICAGO, ILLINOIS 60606
             (Address of principal executive offices and zip code)

               REGISTRANT'S TELEPHONE NUMBER INCLUDING AREA CODE:
                                 (312) 651-3000

          SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
                                      NONE

          SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
                     COMMON STOCK, PAR VALUE $.01 PER SHARE

                                (Title of Class)

     Indicate by check mark whether the registrant (1) has filed all reports to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to filing requirements
for the past 90 days.  Yes [X]     No [ ]

     Indicate by check mark if disclosure of delinquent filers pursuant to item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.  [X]

     Indicate by check mark whether the registrant is an accelerated filer (as
defined in Exchange Act Rule 12b-2).  Yes [X]     No [ ]

     The aggregate market value of the registrant's voting stock held by
non-affiliates of the registrant (based upon the per share closing sale price of
$17.97 on June 30, 2004) was approximately $315.8 million.

     The number of shares outstanding of the registrant's Common Stock, par
value $0.01, as of March 1, 2005, was 17,783,279.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<PAGE>

EXPLANATORY NOTE

     SPSS Inc. ("SPSS" or the "Company") timely filed its Annual Report on Form
10-K for fiscal year 2004 (the "Annual Report") with the Securities and Exchange
Commission (the "SEC") on March 16, 2005. When filing its Annual Report, SPSS
relied upon the SEC's Exemptive Order providing for a 45-day extension for the
filing of Management's Annual Report on Internal Control Over Financial
Reporting (required by Item 308(a) of Regulation S-K) and the Attestation Report
of the Registered Public Accounting Firm (required by Item 308(b) of Regulation
S-K). The Annual Report indicated that Management's Annual Report on Internal
Control Over Financial Reporting and the Attestation Report of the Registered
Public Accounting Firm would be added to the Annual Report by means of an
amendment on Form 10-K/A in accordance with the Exemptive Order.

     This Amendment No. 1 to Annual Report on Form 10-K ("Amendment No. 1")
amends our Annual Report as follows:

          (i) Management's Annual Report on Internal Control Over Financial
     Reporting has been added to Part II, Item 8 of the Annual Report (Financial
     Statements and Supplementary Data).

          (ii) The Attestation Report of the Registered Public Accounting Firm
     has been added to Part II, Item 8 of the Annual Report (Financial
     Statements and Supplementary Data).

          (iii) Part III, Item 9A of the Annual Report (Controls and Procedures)
     has been amended to reflect the fact that SPSS management and the Company's
     independent registered public accounting firm, KPMG LLP, have completed
     their respective assessment and audit of the Company's internal control
     over financial reporting and the above listed reports have been added to
     the Annual Report.

     In connection with the filing of this Amendment No. 1 and pursuant to the
SEC rules promulgated pursuant to the Securities Exchange Act of 1934, as
amended, SPSS is including with this Amendment No. 1 certain currently dated
certifications. Except as described above, no other amendments are being made to
the Annual Report. This Amendment No. 1 does not reflect events occurring after
the March 16, 2005 filing of the Annual Report or modify or update the
disclosure contained in the Annual Report in any way other than as required to
reflect the amendments discussed above and reflected below.
<PAGE>

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

                           SPSS INC. AND SUBSIDIARIES

                                     INDEX

<Table>
<Caption>
                                                              PAGE
                                                              ----
<S>                                                           <C>
Reports of Independent Registered Public Accounting Firm....    2
Management's Report on Internal Control Over Financial
  Reporting.................................................    5
Consolidated Balance Sheets as of December 31, 2003 and
  2004......................................................    7
Consolidated Statements of Operations for the years ended
  December 31, 2002, 2003 and 2004..........................    8
Consolidated Statements of Comprehensive Income (Loss) for
  the years ended December 31, 2002, 2003 and 2004..........    9
Consolidated Statements of Stockholders' Equity for the
  years ended December 31, 2002, 2003 and 2004..............   10
Consolidated Statements of Cash Flows for the years ended
  December 31, 2002, 2003 and 2004..........................   11
Notes to Consolidated Financial Statements..................   12
Consolidated Financial Statement Schedule:
Schedule II Valuation and Qualifying Accounts...............   40
</Table>

     Schedules not filed:

All schedules other than Schedule II have been omitted as the required
information is inapplicable or the information is presented in the consolidated
financial statements or related notes.

                                        1
<PAGE>

            REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Stockholders of SPSS Inc.:

     We have audited the accompanying consolidated balance sheets of SPSS Inc.
and subsidiaries (SPSS or the Company) as of December 31, 2003 and 2004, and the
related consolidated statements of operations, comprehensive income (loss),
stockholders' equity, and cash flows for each of the years in the three-year
period ended December 31, 2004. In connection with our audits of the
consolidated financial statements, we also have audited the consolidated
financial statement schedule of valuation and qualifying accounts. These
consolidated financial statements and the consolidated financial statement
schedule are the responsibility of the Company's management. Our responsibility
is to express an opinion on these consolidated financial statements and the
consolidated financial statement schedule based on our audits.

     We conducted our audits in accordance with the standards of the Public
Company Accounting Oversight Board (United States). Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.

     In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of the Company
as of December 31, 2003 and 2004, and the results of their operations and their
cash flows for each of the years in the three-year period ended December 31,
2004, in conformity with U.S. generally accepted accounting principles. Also, in
our opinion, the related consolidated financial statement schedule, when
considered in relation to the basic consolidated financial statements taken as a
whole, presents fairly, in all material respects, the information set forth
therein.

     As discussed in Note 1 to the consolidated financial statements, effective
July 1, 2003, the Company adopted SFAS No. 150, "Accounting for Certain
Financial Instruments with Characteristics of both Liabilities and Equity."

/s/ KPMG LLP

Chicago, Illinois
March 16, 2005

                                        2
<PAGE>

            REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Stockholders
SPSS Inc.:

     We have audited management's assessment, included in the accompanying
MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING, that SPSS Inc.
(the Company) did not maintain effective internal control over financial
reporting as of December 31, 2004, because of the effect of the material
weaknesses identified in management's assessment associated with the Company's
accounting for revenue and income taxes, based on criteria established in
Internal Control -- Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO). The Company's management is
responsible for maintaining effective internal control over financial reporting
and for its assessment of the effectiveness of internal control over financial
reporting. Our responsibility is to express an opinion on management's
assessment and an opinion on the effectiveness of the Company's internal control
over financial reporting based on our audit.

     We conducted our audit in accordance with the standards of the Public
Company Accounting Oversight Board (United States). Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether
effective internal control over financial reporting was maintained in all
material respects. Our audit included obtaining an understanding of internal
control over financial reporting, evaluating management's assessment, testing
and evaluating the design and operating effectiveness of internal control, and
performing such other procedures as we considered necessary in the
circumstances. We believe that our audit provides a reasonable basis for our
opinion.

     A company's internal control over financial reporting is a process designed
to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance
with generally accepted accounting principles. A company's internal control over
financial reporting includes those policies and procedures that (1) pertain to
the maintenance of records that, in reasonable detail, accurately and fairly
reflect the transactions and dispositions of the assets of the company; (2)
provide reasonable assurance that transactions are recorded as necessary to
permit preparation of financial statements in accordance with generally accepted
accounting principles, and that receipts and expenditures of the company are
being made only in accordance with authorizations of management and directors of
the company; and (3) provide reasonable assurance regarding prevention or timely
detection of unauthorized acquisition, use, or disposition of the company's
assets that could have a material effect on the financial statements.

     Because of its inherent limitations, internal control over financial
reporting may not prevent or detect misstatements. Also, projections of any
evaluation of effectiveness to future periods are subject to the risk that
controls may become inadequate because of changes in conditions, or that the
degree of compliance with the policies or procedures may deteriorate.

     A material weakness is a control deficiency, or combination of control
deficiencies, that results in more than a remote likelihood that a material
misstatement of the annual or interim financial statements will not be prevented
or detected. The following material weaknesses have been identified as of
December 31, 2004, and included in management's assessment:

REVENUE

     The Company identified a material weakness in its internal control over
financial reporting related to revenue resulting from the aggregation of the
following deficiencies:

     - The Company's review of software contracts was not sufficiently
       documented and did not identify certain non-standard contract terms which
       required further analysis to ensure compliance with U.S. generally
       accepted accounting principles;

     - Certain deferred revenue account reconciliations lacked adequate
       documentation and analysis of reconciling items and, in international
       locations, lacked an appropriate review;
                                        3
<PAGE>

     - The Company's documentation of controls over the completeness and
       accuracy of product shipments from international third-party fulfillment
       centers was insufficient;

     - The Company's documentation of controls for information technology
       applications ensuring completeness, existence, and accuracy of revenue
       and deferred revenue was insufficient;

     - The Company's international revenue recognition policy was not
       comprehensive; and

     - The Company's analyses, primarily in international locations, to
       establish the fair value of undelivered elements in software arrangements
       were not sufficient.

     As a result of these control deficiencies, misstatements in the Company's
accounting for revenue were identified. Further, these deficiencies represent
more than a remote likelihood that material misstatements of revenue reported in
the Company's interim or annual financial statements would not be prevented or
detected.

INCOME TAXES

     The Company did not employ personnel with the appropriate level of
expertise to calculate, document, and review its accounting for income taxes. In
addition, the Company did not maintain adequate documentation and lacked an
adequate review process to ensure the reasonableness of assumptions underlying
determinations regarding the recoverability of recorded deferred tax assets.
These deficiencies in the Company's internal control over financial reporting
resulted in material misstatements in the Company's accounting for its income
tax provision and deferred income taxes.

     We also have audited, in accordance with the standards of the Public
Company Accounting Oversight Board (United States), the consolidated balance
sheets as of December 31, 2004 and 2003, and the related consolidated statements
of operations, comprehensive income (loss), stockholders' equity and cash flows
for each of the years in the three-year period ended December 31, 2004 of SPSS
Inc. and subsidiaries. The aforementioned material weaknesses were considered in
determining the nature, timing, and extent of audit tests applied in our audit
of the 2004 consolidated financial statements, and this report does not affect
our report dated March 16, 2005, which expressed an unqualified opinion on those
consolidated financial statements.

     In our opinion, management's assessment that SPSS Inc. did not maintain
effective internal control over financial reporting as of December 31, 2004, is
fairly stated, in all material respects, based on criteria established in
Internal Control-Integrated Framework issued by COSO. Also, in our opinion,
because of the effect of the material weaknesses described above on the
achievement of the objectives of the control criteria, SPSS Inc. has not
maintained effective internal control over financial reporting as of December
31, 2004, based on criteria established in Internal Control-Integrated Framework
issued by COSO.

/s/ KPMG LLP

Chicago, Illinois
April 21, 2005

                                        4
<PAGE>

        MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

     Management is responsible for establishing and maintaining adequate
internal control over financial reporting, as such term is defined in Exchange
Act Rule 13a-15(f) to provide reasonable assurance regarding the reliability of
our financial reporting and the preparation of the financial statements for
external purposes in accordance with U.S. generally accepted accounting
principles. Management assessed the effectiveness of the Company's internal
control over financial reporting as of December 31, 2004, using the criteria
published by the Committee of Sponsoring Organizations of the Treadway
Commission (COSO) in Internal Control -- Integrated Framework.

     A company's internal control over financial reporting is a process designed
to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance
with generally accepted accounting principles. A company's internal control over
financial reporting includes those policies and procedures that (1) pertain to
the maintenance of records that, in reasonable detail, accurately and fairly
reflect the transactions and dispositions of the assets of the company; (2)
provide reasonable assurance that transactions are recorded as necessary to
permit preparation of financial statements in accordance with generally accepted
accounting principles, and that receipts and expenditures of the company are
being made only in accordance with authorizations of management and directors of
the company; and (3) provide reasonable assurance regarding prevention or timely
detection of unauthorized acquisition, use, or disposition of the company's
assets that could have a material effect on the financial statements.

     Because of its inherent limitations, internal control over financial
reporting may not prevent or detect misstatements. Also, projections of any
evaluation of effectiveness to future periods are subject to the risk that
controls may become inadequate because of changes in conditions, or that the
degree of compliance with the policies or procedures may deteriorate.

     A material weakness is a control deficiency, or combination of control
deficiencies, that results in there being more than a remote likelihood that a
material misstatement of the annual or interim financial statements will not be
prevented or detected.

     Based on the evaluation under the framework in Internal
Control -- Integrated Framework, management concluded that the Company did not
maintain effective internal control over financial reporting as of December 31,
2004, because of the following material weaknesses:

REVENUE

     The Company identified a material weakness in its internal control over
financial reporting related to revenue resulting from the aggregation of the
following deficiencies:

     - The Company's review of software contracts was not sufficiently
       documented and did not identify certain non-standard contract terms which
       required further analysis to ensure compliance with U.S. generally
       accepted accounting principles;

     - Certain deferred revenue account reconciliations lacked adequate
       documentation and analysis of reconciling items and, in international
       locations, lacked an appropriate review;

     - The Company's documentation of controls over the completeness and
       accuracy of product shipments from international third-party fulfillment
       centers was insufficient;

     - The Company's documentation of controls for information technology
       applications ensuring completeness, existence, and accuracy of revenue
       and deferred revenue was insufficient;

     - The Company's international revenue recognition policy was not
       comprehensive; and

     - The Company's analyses, primarily in international locations, to
       establish the fair value of undelivered elements in software arrangements
       were not sufficient.

                                        5
<PAGE>

     As a result of these control deficiencies, misstatements in the Company's
accounting for revenue were identified and corrected prior to issuance of the
consolidated financial statements as of and for the year ended December 31,
2004. Further, these deficiencies represent more that a remote likelihood that
material misstatements of the Company's interim or annual financial statements
would not be prevented or detected.

INCOME TAXES

     The Company did not employ personnel with the appropriate level of
expertise to calculate, document, and review its accounting for income taxes. In
addition, the Company did not maintain adequate documentation and lacked an
adequate review process to ensure the reasonableness of assumptions underlying
determinations regarding the recoverability of recorded deferred tax assets.
These deficiencies in the Company's internal control over financial reporting
resulted in material misstatements in the Company's accounting for its income
tax provision and deferred income taxes. Adjustments were recorded in the
consolidated financial statements as of and for the year ended December 31, 2004
to correct these misstatements.

     Our independent registered public accounting firm, KPMG LLP, has issued an
audit report on management's assessment of the Company's internal control over
financial report. That report is included in Item 8 of this Annual Report.

                                          By:        /s/ Jack Noonan
                                            ------------------------------------
                                                        Jack Noonan
                                               President and Chief Executive
                                                           Officer

                                          By:     /s/ Raymond H. Panza
                                            ------------------------------------
                                                      Raymond H. Panza
                                            Executive Vice-President, Corporate
                                                         Operations,
                                                Chief Financial Officer and
                                                          Secretary

                                        6
<PAGE>

                           SPSS INC. AND SUBSIDIARIES

                          CONSOLIDATED BALANCE SHEETS
                       (IN THOUSANDS, EXCEPT SHARE DATA)

<Table>
<Caption>
                                                              DECEMBER 31,   DECEMBER 31,
                                                                  2003           2004
                                                              ------------   ------------
<S>                                                           <C>            <C>
                                         ASSETS
CURRENT ASSETS:
  Cash and cash equivalents.................................    $ 36,101       $ 37,107
  Accounts receivable, net of allowances $3,635 in 2003 and
     $2,465 in 2004.........................................      49,317         50,007
  Inventories, net..........................................       1,444            789
  Deferred income taxes.....................................      14,023         15,503
  Prepaid income taxes......................................       3,996          7,064
  Other current assets......................................       7,931          5,248
                                                                --------       --------
     Total current assets...................................     112,812        115,718
                                                                --------       --------
Net property, equipment and leasehold improvements..........      27,771         21,480
Restricted cash.............................................         190             --
Capitalized software development costs, net of accumulated
  amortization..............................................      26,826         28,178
Goodwill....................................................      42,253         42,197
Intangibles, net............................................       3,380          3,278
Deferred income taxes.......................................      13,142         22,860
Other noncurrent assets.....................................       2,633          1,614
                                                                --------       --------
       Total assets.........................................    $229,007       $235,325
                                                                ========       ========

                          LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
  Notes payable.............................................    $  2,500       $  2,500
  Accounts payable..........................................       7,169          6,127
  Income taxes and value added taxes payable................       2,863          7,340
  Deferred revenues.........................................      59,051         62,148
  Other accrued liabilities.................................      24,600         23,757
                                                                --------       --------
     Total current liabilities..............................      96,183        101,872
                                                                --------       --------
Noncurrent deferred income taxes............................         632            632
Noncurrent notes payable....................................       5,951          3,381
Other noncurrent liabilities................................       1,181            981

Common stock subject to repurchase..........................       5,421             --
STOCKHOLDERS' EQUITY:
  Common Stock, $0.01 par value; 50,000,000 shares
     authorized; 17,257,871 and 17,705,744 shares issued and
     outstanding in 2003 and 2004, respectively.............         173            177
  Additional paid-in capital................................     148,202        152,477
  Deferred compensation.....................................        (385)          (145)
  Accumulated other comprehensive loss......................      (6,576)        (7,818)
  Accumulated deficit.......................................     (21,775)       (16,232)
                                                                --------       --------
     Total stockholders' equity.............................     119,639        128,459
                                                                --------       --------
       Total liabilities and stockholders' equity...........    $229,007       $235,325
                                                                ========       ========
</Table>

  The accompanying notes are an integral part of these consolidated financial
                                  statements.

                                        7
<PAGE>

                           SPSS INC. AND SUBSIDIARIES

                     CONSOLIDATED STATEMENTS OF OPERATIONS
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)

<Table>
<Caption>
                                                                 YEAR ENDED DECEMBER 31,
                                                              ------------------------------
                                                                2002       2003       2004
                                                              --------   --------   --------
<S>                                                           <C>        <C>        <C>
Net revenues:
  License...................................................  $ 93,063   $ 91,473   $ 95,819
  Maintenance...............................................    81,481     83,557     97,735
  Services..................................................    33,936     33,337     30,520
                                                              --------   --------   --------
Net revenues................................................   208,480    208,367    224,074
Operating expenses:
  Cost of license and maintenance revenues..................    17,696     14,359     14,642
  Cost of license and maintenance revenues -- software
     write-offs.............................................     5,928      1,961         --
  Sales, marketing and services (Note 19)...................   130,303    123,454    129,987
  Research and development..................................    41,624     44,167     47,765
  General and administrative................................    17,163     17,773     24,813
  Provision for doubtful accounts...........................       869        421        291
  Special general and administrative charges................     9,037      6,104         --
  Merger-related............................................     2,260         --         --
  Illumitek shut-down charges...............................       518         --         --
  Acquired in-process technology............................       150         --         --
                                                              --------   --------   --------
Operating expenses..........................................   225,548    208,239    217,498
                                                              --------   --------   --------
Operating income (loss).....................................   (17,068)       128      6,576
                                                              --------   --------   --------
Other income (expense):
  Net interest and investment expense.......................       (63)       (42)      (282)
  Gain on divestiture of Sigma-series product line..........        --      8,577         82
  Other.....................................................       752      1,798      1,680
                                                              --------   --------   --------
Other income................................................       689     10,333      1,480
                                                              --------   --------   --------
Income (loss) before income taxes and minority interest.....   (16,379)    10,461      8,056
Income tax expense..........................................       878      1,147      2,513
                                                              --------   --------   --------
Income (loss) before minority interest......................   (17,257)     9,314      5,543
Minority interest...........................................       497         --         --
                                                              --------   --------   --------
Net income (loss)...........................................  $(16,760)  $  9,314   $  5,543
                                                              ========   ========   ========
Basic net income (loss) per share...........................  $  (0.99)  $   0.54   $   0.31
                                                              ========   ========   ========
Diluted net income (loss) per share.........................  $  (0.99)  $   0.53   $   0.31
                                                              ========   ========   ========
Shares used in computing basic net income (loss) per
  share.....................................................    16,887     17,351     17,671
                                                              ========   ========   ========
Shares used in computing diluted net income (loss) per
  share.....................................................    16,887     17,562     17,884
                                                              ========   ========   ========
</Table>

  The accompanying notes are an integral part of these consolidated financial
                                  statements.
                                        8
<PAGE>

                           SPSS INC. AND SUBSIDIARIES

             CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
                                 (IN THOUSANDS)

<Table>
<Caption>
                                                                YEAR ENDED DECEMBER 31,
                                                              ---------------------------
                                                                2002      2003     2004
                                                              --------   ------   -------
<S>                                                           <C>        <C>      <C>
Net income (loss)...........................................  $(16,760)  $9,314   $ 5,543
Other comprehensive income (loss):
  Foreign currency translation adjustment...................     2,128     (720)   (1,242)
  Unrealized holding gain on marketable securities, net of
     tax....................................................        11       --        --
                                                              --------   ------   -------
Comprehensive income (loss).................................  $(14,621)  $8,594   $ 4,301
                                                              ========   ======   =======
</Table>

  The accompanying notes are an integral part of these consolidated financial
                                  statements.
                                        9
<PAGE>

                           SPSS INC. AND SUBSIDIARIES

                CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                       (IN THOUSANDS, EXCEPT SHARE DATA)

<Table>
<Caption>
                                                          YEAR ENDED DECEMBER 31,
                                                       ------------------------------
                                                         2002       2003       2004
                                                       --------   --------   --------
<S>                                                    <C>        <C>        <C>
Common stock, $.01 par value:
  Balance at beginning of period.....................  $    167   $    172   $    173
  Sale of 33,818, 31,054 and 23,271 shares of common
     stock to the Employee Stock Purchase Plans in
     2002, 2003 and 2004, respectively...............        --         --         --
  Exercise of stock options and other................         5          1          4
                                                       --------   --------   --------
  Balance at end of period...........................       172        173        177
                                                       --------   --------   --------
Additional paid-in capital:
  Balance at beginning of period.....................   137,654    139,391    148,202
  Sale of 33,818, 31,054 and 23,271 shares of common
     stock to the Employee Stock Purchase Plans in
     2002, 2003 and 2004, respectively...............       521        396        392
  Reclassification of 158,228 shares of common stock
     issued to AOL from temporary equity.............        --      3,296         --
  Issuance of 291,828 shares of common stock to AOL
     for survey services.............................        --      3,000         --
  Options issued to consultant.......................       397         --         --
  Exercise of stock options and other................       669      1,810      3,749
  Income tax benefit related to stock options........       150        309        134
                                                       --------   --------   --------
  Balance at end of period...........................   139,391    148,202    152,477
                                                       --------   --------   --------
Accumulated other comprehensive income (loss):
  Balance at beginning of period.....................    (7,995)    (5,856)    (6,576)
  Foreign currency translation adjustment............     2,128       (720)    (1,242)
  Unrealized holding gain on marketable securities,
     net of tax......................................        11         --         --
                                                       --------   --------   --------
  Balance at end of period...........................    (5,856)    (6,576)    (7,818)
                                                       --------   --------   --------
Deferred compensation:
  Balance at beginning of period.....................      (435)      (625)      (385)
  Amortization of deferred compensation..............       207        240        240
  Options issued to consultant.......................      (397)        --         --
                                                       --------   --------   --------
  Balance at end of period...........................      (625)      (385)      (145)
                                                       --------   --------   --------
Retained earnings (accumulated deficit):
  Balance at beginning of period.....................   (14,329)   (31,089)   (21,775)
  Net income (loss)..................................   (16,760)     9,314      5,543
                                                       --------   --------   --------
  Balance at end of period...........................   (31,089)   (21,775)   (16,232)
                                                       --------   --------   --------
Total stockholders' equity...........................  $101,993   $119,639   $128,459
                                                       ========   ========   ========
</Table>

  The accompanying notes are an integral part of these consolidated financial
                                  statements.
                                        10
<PAGE>

                           SPSS INC. AND SUBSIDIARIES

                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)

<Table>
<Caption>
                                                                YEAR ENDED DECEMBER 31,
                                                             -----------------------------
                                                               2002      2003       2004
                                                             --------   -------   --------
<S>                                                          <C>        <C>       <C>
Cash flows from operating activities:
  Net income (loss)........................................  $(16,760)  $ 9,314   $  5,543
    Adjustments to reconcile net income (loss) to net cash
       provided by (used in) operating activities:
    Depreciation and amortization..........................    14,350    15,791     16,405
    Deferred income taxes..................................    (5,765)    1,891    (11,190)
    Gain on sale of product line...........................        --    (8,577)       (82)
    Write-off of acquired in-process technology............       150        --         --
    Write-off of software to cost of revenues..............     5,751     2,147         --
    Write-off of internal use software and acquired
       technology..........................................        --     4,447      1,505
    Concurrent purchase and sale of software...............       (42)       --         --
    Noncash survey services expense (recoveries)...........     2,250     1,312     (1,125)
    Gain from property disposals...........................        --        --       (771)
    Changes in assets and liabilities, net of effects of
       acquisitions:
       Accounts receivable.................................     1,296     3,396        969
       Inventories.........................................       458       726        691
       Prepaid and other assets............................    (1,976)    3,423       (236)
       Restricted cash.....................................       486     1,404        190
       Accounts payable....................................     1,578    (5,292)    (1,253)
       Accrued expenses....................................    (2,757)   (7,484)      (423)
       Income taxes........................................     5,717    (6,755)       835
       Deferred revenue....................................    (1,884)    5,872      1,747
  Other, net...............................................    (3,494)      594       (471)
                                                             --------   -------   --------
Net cash provided by (used in) operating activities........      (642)   22,209     12,334
                                                             --------   -------   --------
Cash flows from investing activities:
  Capital expenditures, net................................   (12,859)   (2,573)    (5,477)
  Capitalized software development costs...................   (11,069)   (9,610)    (9,208)
  Repurchase of common stock issued for acquisition........        --        --     (5,421)
  Proceeds from the divestiture of Sigma-series product
    line...................................................        --     9,000      3,000
  Proceeds from property disposal..........................        --        --      2,633
  Consideration for acquisitions...........................    (3,500)   (1,000)        --
  Proceeds from maturities and sale of marketable
    securities.............................................     9,792        --         --
  Other investing activities...............................       498        --        187
                                                             --------   -------   --------
Net cash used in investing activities......................   (17,138)   (4,183)   (14,286)
                                                             --------   -------   --------
Cash flows from financing activities:
  Net (repayments) borrowings under line-of-credit
    agreements.............................................     7,325       (49)    (2,570)
  Proceeds from issuance of common stock...................     1,195     2,207      4,145
                                                             --------   -------   --------
Net cash provided by financing activities..................     8,520     2,158      1,575
                                                             --------   -------   --------
Effect of exchange rates on cash...........................     2,350     1,427      1,383
                                                             --------   -------   --------
Net change in cash and cash equivalents....................    (6,910)   21,611      1,006
Cash and cash equivalents at beginning of period...........    21,400    14,490     36,101
                                                             --------   -------   --------
Cash and cash equivalents at end of period.................  $ 14,490   $36,101   $ 37,107
                                                             ========   =======   ========
Supplemental disclosures of cash flow information:
  Interest paid............................................  $    583   $   801   $    723
  Income taxes paid........................................     6,069     7,478     14,974
  Cash received from income tax refunds....................     3,548     3,139      2,307
  Supplemental disclosures of noncash investing activities:
    Issuance of common stock for acquisitions..............        --     5,311         --
    Issuance of common stock for AOL services..............     3,000        --         --
    Receipt of note receivable in divestiture of
       Sigma-series product line...........................        --    (3,000)        --
</Table>

  The accompanying notes are an integral part of these consolidated financial
                                  statements.
                                        11
<PAGE>

                           SPSS INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                (AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BUSINESS

     SPSS Inc., a Delaware corporation ("SPSS" or the "Company"), was
incorporated in Illinois in 1975 under the name SPSS, Inc. and was
reincorporated in Delaware in May 1993 under the name "SPSS Inc." SPSS is a
global provider of predictive analytics technology and services.

     The Company's offerings use predictive analytics to connect data to
effective action by drawing reliable conclusions about current conditions and
future events. Predictive analytics leverages an organization's business
knowledge by applying sophisticated analytic techniques to enterprise data. The
insights gained through the use of these techniques can lead to improved
business processes that increase revenues, reduce costs, and prevent fraudulent
activities.

     SPSS reports revenues in three categories used by most enterprise software
companies:

     - License fees, representing new sales of the Company's tools,
       applications, and components on a perpetual, annual, or ASP (applications
       services provider) basis;

     - Maintenance, representing recurring revenues recognized by the Company
       from renewals of maintenance agreements associated with perpetual
       licenses or renewals of annual licenses; and

     - Services, representing revenues recognized from professional services
       engagements, training, and other activities such as publication sales and
       providing respondents to online surveys.

  PRINCIPLES OF CONSOLIDATION

     The consolidated financial statements include the accounts of SPSS Inc. and
its wholly owned subsidiaries. Significant intercompany accounts and
transactions have been eliminated. In addition, the consolidated financial
statements include the operating results of Illumitek, Inc., a 50% owned joint
venture, from October 1, 2001 through date of liquidation (see Note 8).

     The translation of the applicable foreign currencies into U.S. dollars is
performed for balance sheet accounts using current exchange rates in effect at
the balance sheet date and for revenue and expense accounts using the weighted
average exchange rates during the period. The gains or losses resulting from
such translation are included in stockholders' equity. Gains or losses resulting
from foreign currency transactions are included in "other income and expense" in
the consolidated statements of operations.

  USE OF ESTIMATES

     The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and judgments that affect the reported amounts of
assets and liabilities, disclosure of contingent assets and liabilities, and
reported amounts of revenue and expenses during the reporting period. Actual
results could differ from those estimates. The principal areas of estimation in
the financial statements include revenue recognition, capitalization of software
development costs, impairment of long-lived assets, credit losses on accounts
receivable, income taxes, contingencies and litigation.

  REVENUE RECOGNITION

     The Company applies AICPA Statement of Position ("SOP") 97-2, Software
Revenue Recognition, and related Amendments which establishes the criteria that
must be met prior to SPSS recognizing revenues from software sales.

                                        12
<PAGE>
                           SPSS INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     The Company's policy is to record revenue only when these criteria are met:

          (1) Persuasive evidence of an arrangement exists -- SPSS and the
     customer have executed a written agreement, contract or other evidence of
     an arrangement.

          (2) Delivery has occurred -- Product has been shipped or delivered to
     customer, depending on the applicable terms. The Company's standard
     contract does not contain acceptance clauses. In the event that SPSS
     modifies the terms of its standard contract to provide that final delivery
     is contingent upon the customer accepting the applicable product, SPSS does
     not recognize revenue for that product until the customer has accepted the
     product.

          (3) The vendor's fee is fixed or determinable -- The arrangement
     indicates the price of the license and the number of users, and the related
     payment terms are within one year of delivery of the software.

          (4) Collectibility is probable -- SPSS sells to customers it deems
     creditworthy. Standard terms for payment are 30 days. SPSS periodically
     extends payment terms to three to six months, but does not extend payment
     terms past one year. Any terms beyond standard are generally still
     collectible and are generally offered in larger transactions with more
     creditworthy customers.

     SPSS primarily recognizes revenue from product licenses, net of an
allowance for estimated returns and cancellations, at the time the software is
shipped. Revenue from certain product license agreements is recognized upon
contract execution, product delivery, and customer acceptance.

     The Company's customary terms are FOB shipping point. SPSS estimates and
records provisions for revenue returns and allowances in the period the related
products are sold, based upon historical experience.

     Revenue from postcontract customer support ("PCS" or "maintenance")
agreements, including PCS bundled with product licenses, is recognized ratably
over the term of the related PCS agreements. Maintenance revenues consist
primarily of fees for providing when-and-if-available unspecified software
upgrades and technical support over a specified term. Maintenance revenues are
recognized on a straight-line basis over the term of the contract. Some product
licenses include commitments for insignificant obligations, such as technical
and other support, for which an accrual is provided.

     Distribution partners: The Company licenses third-parties to distribute
SPSS products in certain territories internationally or as value-added resellers
worldwide. SPSS records license fees from transactions made by such distribution
partners when these transactions are reported, and the partners are responsible
for providing related maintenance services, including end-user support and
software updates. However, SPSS has post contract support (PCS) obligations to
the customers of its distribution partners that are implied by its
responsibility to provide these partners with updates of SPSS products when and
if developed. Because the Company cannot establish vendor specific objective
evidence (VSOE) of fair value of these implied maintenance arrangements, the
Company recognizes the related license fees ratably over the terms of the
arrangements beginning when transactions are reported to the Company by its
distribution partners and when all revenue recognition criteria are met.
Specific revenue recognition on distributor partner contracts will be defined by
the terms of the contract as follows:

     - Where SPSS defines the price for renewal of maintenance and support in
       the contract, such amount represents vendor specific objective evidence
       (VSOE) of fair value of maintenance and such amount will be deferred and
       recognized ratably over the life of the support contract.

     - When SPSS provides direct maintenance and support to the end-user, SPSS
       will defer the estimated fair value of the maintenance and support
       consistent with direct sales to its customers.

     - When neither of the above conditions exist and SPSS must provide free
       updates or second tier support to the partner, the revenue from the
       contract will be deferred and recognized ratably over the life of the
       contract.
                                        13
<PAGE>
                           SPSS INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     - Where no maintenance or support of any kind are required by the contract,
       no revenue will be deferred.

     - When a reseller has a right to return product stock for updated product
       stock (stock swap), SPSS accounts for this as a right of return in
       accordance with Statement of Financial Accounting Standards ("SFAS") No.
       48, Revenue Recognition when Right of Return Exists, and establishes a
       reserve for the estimated amount of the returns.

     Revenues from fixed-price contracts are recognized using the
percentage-of-completion method, under SOP 81-1, Accounting for Performance of
Construction-Type and Certain Production-Type Contracts, of contract accounting
as services are performed to develop, customize and install the Company's
software products. The percentage completed is measured by the percentage of
labor hours incurred to date in relation to estimated total labor hours for each
contract. Management considers labor hours to be the best available measure of
progress on these contracts.

     SPSS enters into arrangements which may consist of the sale of: (a)
licenses of the Company's software, (b) professional services and maintenance or
(c) various combinations of each element. Revenues are recognized based on the
residual method under SOP 98-9, Modification of SOP 97-2 Software Revenue
Recognition, when an agreement has been signed by both parties, delivery of the
product has occurred, the fees are fixed or determinable, collection of the fees
is probable and no other significant obligations remain. Historically, the
Company has not experienced significant returns or offered exchanges of its
products.

     For multiple element arrangements, each element of the arrangement is
analyzed and SPSS allocates a portion of the total fee under the arrangement to
the undelivered elements, such as professional services, training and
maintenance based on vendor-specific objective evidence of fair value. Revenues
allocated to the undelivered elements are deferred using vendor-specific
objective evidence of fair value of the elements and the remaining portion of
the fee is allocated to the delivered elements (generally the software license),
under the residual method. Vendor-specific objective evidence of fair value is
based on the price the customer is required to pay when the element is sold
separately (i.e., hourly time and material rates charged for consulting services
when sold separately from a software license and the optional renewal rates
charged by the Company for maintenance arrangements).

     If an element of the license agreement has not been delivered, revenue for
the element is deferred based on its vendor-specific objective evidence of fair
value. If vendor-specific objective evidence of fair value does not exist, all
revenue is deferred until sufficient objective evidence exists or all elements
have been delivered. If the fee due from the customer is not fixed or
determinable, revenue is recognized as payments become due. If collectibility is
not considered probable, revenue is recognized when the fee is collected.

     Amounts allocated to license revenues under the residual method are
recognized at the time of delivery of the software when vendor-specific
objective evidence of fair value exists for the undelivered elements, if any,
and all the other revenue recognition criteria discussed above have been met.

     Revenues from professional services are comprised of consulting,
implementation services and training. Consulting services are generally sold on
a time-and-materials basis and include services to assist in new implementations
or configure existing applications to vertical industry and customer
requirements. SPSS consultants also help organizations to develop plans that
align analytical efforts with organizational goals, assist with the collection
and structuring of data for analysis, and facilitate the building of predictive
analytical models. Services are generally separable from the other elements
under the arrangement since the performance of the services is not essential to
the functionality (i.e., the services do not involve significant production,
modification or customization of the software or building complex interfaces) of
any other element of the transaction. Revenues for professional services and
training are recognized when the services are performed.

     SPSS offers: (a) annual licenses with maintenance renewable annually, (b)
perpetual licenses with both annual and multi-year maintenance, and (c)
multi-year licenses with multi-year maintenance. Vendor-

                                        14
<PAGE>
                           SPSS INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

specific objective evidence of fair value of maintenance does not exist for
annual licenses with one year of maintenance. For perpetual license arrangements
with one year of maintenance, vendor-specific objective evidence of fair value
is established based on the stated renewal rate of maintenance (which is a set
percentage of the total contract price, in accordance with AICPA Technical
Practice Aid (TPA) 5100.55, Fair Value of PCS with a Consistent Renewal
Percentage, But Varying Dollar Amounts, and Software Revenue Recognition).
Vendor-specific objective evidence of fair value of maintenance is not
determinable for perpetual and multi-year arrangements with multi-year
maintenance in certain countries where SPSS operates. The entire fee is deferred
and recognized ratably over the term of the arrangement.

     SPSS licenses software, primarily to end users, on a perpetual basis and on
an annual and multi-year basis. Under a perpetual license, the customer is
granted an indefinite right to use the software. SPSS has a 60-day return policy
for these types of licenses and the Company calculates its return allowance
using a 12-month rolling average based on actual returns during the prior 12
months. Under an annual license, the customer is granted the right to use the
software for one year and may not return or cancel during the first year.

     For each type of license, postcontract customer support (maintenance) is
offered. Under perpetual licenses, it is the customer's option to renew
maintenance each year. Under an annual license, the customer must renew the
license and maintenance to continue to use the software. In both cases, SPSS
contacts the customer two months before the scheduled renewal date to determine
the customer's renewal intentions. If the customer indicates that it intends to
renew the license, the Company will issue a new invoice. In some cases,
customers ultimately cancel a license even though they initially indicated a
willingness to renew. These cancellations are tracked in a 12-month rolling
average to determine the cancellation percentage that SPSS will accrue as its
cancellation allowance.

     In 2002, SPSS concurrently sold software to and purchased software from one
customer. The Company recorded revenues of $42 in 2002 related to this sale and
the purchased software was to be sold in the ordinary course of business and was
recorded at its carryover basis. SPSS did not enter into any concurrent
purchases of software licenses in 2003 and 2004.

  ADVERTISING EXPENSES

     Advertising expenses are charged to operations during the year in which
they are incurred. The total amount of advertising expenses charged to
operations was $2,605, $2,575 and $2,178 for the years ended December 31, 2002,
2003 and 2004, respectively.

  EARNINGS PER SHARE

     Earnings per common share (EPS) are computed by dividing net income (loss)
by the weighted average number of shares of common stock (basic) plus common
stock equivalents outstanding (diluted) during the period. Common stock
equivalents consist of contingently issuable shares and stock options, which
have been included in the calculation of weighted average shares outstanding
using the treasury stock method. Basic weighted average shares reconciles to
diluted weighted average shares as follows:

<Table>
<Caption>
                                                              2002     2003     2004
                                                             ------   ------   ------
<S>                                                          <C>      <C>      <C>
Basic weighted average common shares outstanding...........  16,887   17,351   17,671
Dilutive effect of stock options and contingently issuable
  shares...................................................      --      211      213
                                                             ------   ------   ------
Diluted weighted average common shares outstanding.........  16,887   17,562   17,884
                                                             ======   ======   ======
</Table>

     Had SPSS recorded net income during 2002, 37 stock options and contingently
issuable shares would have been included in the calculation of diluted
weighted-average common shares outstanding, respectively.

                                        15
<PAGE>
                           SPSS INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Anti-dilutive shares not included in the diluted EPS calculation for 2002, 2003
and 2004 were 1,751, 1,411, and 1,128, respectively.

  DEPRECIATION AND AMORTIZATION

     Depreciation is recorded using the straight-line method. The estimated
useful lives used in the computation of depreciation of tangible assets are as
follows:

<Table>
<S>                                                    <C>
Buildings...........................................   30 years
Furniture and office equipment......................   3-8 years
Computer equipment and software.....................   3-7 years
Leasehold improvements..............................   3-15 years or lease term if shorter
</Table>

     Capitalized software costs are amortized on a straight-line method over
three to five years based upon the expected life of each product. The
straight-line method is utilized as it results in amortization expense of at
least the amount that would be provided by the ratio of annual product revenue
to total product revenue over the remaining useful life of the products.
Identifiable intangible assets are amortized over their estimated useful lives
using the straight-line method.

  SOFTWARE DEVELOPMENT COSTS

     Software development costs incurred by SPSS in connection with the
Company's long-term development projects are capitalized in accordance with SFAS
No. 86, Accounting for the Costs of Computer Software to Be Sold, Leased, or
Otherwise Marketed. SPSS has not capitalized software development costs relating
to development projects where the net realizable value is of short duration, as
the effect would be immaterial. Product enhancement costs are capitalized when
technological feasibility has been established. SPSS reviews capitalized
software development costs each period and, if necessary, reduces the carrying
value of each product to its net realizable value. See additional discussion at
Note 4.

     SPSS applies Statement of Position ("SOP") 98-1, Accounting for the Costs
of Computer Software Developed or Obtained for Internal Use. This standard
requires that certain costs related to the development or purchase of
internal-use software be capitalized and amortized over the estimated useful
life of the software. SOP 98-1 also requires that costs related to the
preliminary project stage and post-implementation/operations stage of an
internal-use computer software development project be expensed as incurred.

  STOCK OPTION PLANS

     The Company maintains one active stock incentive plan that is flexible and
allows various forms of equity incentives to be issued under it. See Note 16 for
additional information regarding this plan. The Company accounts for this plan
under the recognition and measurement principles of Accounting Principles Board
Opinion ("APB") No. 25, Accounting for Stock Issued to Employees, and related
interpretations. In prior years, the Company has recognized compensation cost
for restricted stock issued to employees. No compensation is recognized for
stock option grants to employees. All options granted under the Company plan had
an exercise price equal to the market value of the underlying common stock on
the date of grant. The following table illustrates the effects on net income
(loss) and income (loss) per share if the Company had applied the fair value
recognition provisions of SFAS No. 123, Accounting for Stock-Based Compensation,
to

                                        16
<PAGE>
                           SPSS INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

stock-based compensation. The following table also provides the amount of
stock-based compensation cost included in net income (loss) as reported.

<Table>
<Caption>
                                                          FOR THE YEARS ENDED DECEMBER 31,
                                                         ----------------------------------
                                                            2002        2003        2004
                                                         ----------   ---------   ---------
<S>                                                      <C>          <C>         <C>
Net income (loss), as reported.........................   $(16,760)    $ 9,314     $ 5,543
Add:
  Stock-based employee compensation cost, net of
     related tax, included in net income (loss), as
     reported..........................................         73          59          60
Deduct:
  Total stock-based employee compensation expense
     determined under the fair value based method for
     all awards, net of related taxes..................     (5,013)     (5,120)     (4,195)
                                                          --------     -------     -------
Pro forma net income (loss)............................   $(21,700)    $ 4,253     $ 1,408
                                                          ========     =======     =======
Income (loss) per share:
  Basic -- as reported.................................   $  (0.99)    $  0.54     $  0.31
  Basic -- pro forma...................................   $  (1.29)    $  0.25     $  0.08
  Diluted -- as reported...............................   $  (0.99)    $  0.53     $  0.31
  Diluted -- pro forma.................................   $  (1.29)    $  0.24     $  0.08
</Table>

     Under the stock option plan, the exercise price of each option equals the
market value of the Company's stock on the date of grant. For purposes of
calculating the compensation costs consistent with SFAS No. 123 for option
grants, the fair value of each grant or purchase right is estimated on the date
of grant using the Black-Scholes option-pricing model with the following
weighted-average assumptions for grants in fiscal 2002, 2003 and 2004: no
expected dividend yield; expected volatility of 37 percent in 2002, 39 percent
in 2003 and 38 percent in 2004; risk-free interest rates ranging from
3.72%-5.20% in 2002, 3.53%-4.49% in 2003 and 4.09%-4.71% in 2004, and expected
lives of 4-8 years for all years.

     For purposes of calculating the compensation costs consistent with SFAS No.
123 for employee stock purchase plan purchase rights, the fair value of each
purchase right is estimated on the date the purchase right is issued using the
Black-Scholes option-pricing model with the following weighted-average
assumptions for purchase rights in fiscal 2002, 2003 and 2004: no expected
dividend yield; expected volatility ranging from 37%-38% in 2002, from 38%-39%
in 2003 and from 37%-38% in 2004; risk-free interest rates ranging from
1.57%-1.79% in 2002, 0.89%-1.14% in 2003 and 0.95%-1.71% in 2004, and an
expected life of 3 months for all years.

  GOODWILL AND OTHER INTANGIBLE ASSETS

     Goodwill represents the excess of the purchase price of net tangible and
identifiable intangible assets acquired in business combinations over their
estimated fair value. Other intangibles mainly represent customer relationships
and trademarks acquired in business combinations. On January 1, 2002, the
Company adopted SFAS No. 142, Goodwill and Other Intangible Assets, which
required that goodwill and intangible assets with indefinite useful lives no
longer be amortized but instead tested for impairment at least annually in
accordance with the provisions of SFAS No. 142. As result, the Company no longer
amortizes goodwill but will test it for impairment annually or whenever events
or changes in circumstances suggest that the carrying amount may not be
recoverable. Identifiable intangibles are amortized over a seven to ten year
period using the straight-line method. See additional discussion at Note 5 and
Note 7.

                                        17
<PAGE>
                           SPSS INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

  CASH AND CASH EQUIVALENTS

     Cash and cash equivalents are comprised of highly liquid investments with
original maturity dates of three months or less. As of December 31, 2004, the
Company had $8.1 million invested in an overnight investment in the form of
commercial paper.

  INVENTORIES

     Inventories, consisting of finished goods, are stated at the lower of cost
or market. Cost is determined using the first-in, first-out method.

  PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS

     Property, equipment and leasehold improvements are stated at cost.

  RESTRICTED CASH

     Restricted cash consists of deposits held at major financial institutions
as collateral for letters of credit that secure the Company's office leases and
leases of certain of the Company's fixed assets.

  IMPAIRMENT OF GOODWILL

     SPSS reviews its goodwill and intangible assets with indefinite useful
lives for impairment at least annually in accordance with the provisions of SFAS
No. 142, Goodwill and Other Intangible Assets. SFAS No. 142 requires the Company
the perform the goodwill impairment test annually or when a change in facts and
circumstances indicate that the fair value of an asset may be below its carrying
amount. SPSS performed an impairment test in the fourth quarter of 2003 and 2004
and no loss was required to be recognized upon completion of these tests.

  LONG-LIVED ASSETS

     Long-lived assets to be held and used are reviewed for impairment whenever
events or changes in circumstances indicate that the carrying amount should be
evaluated. Factors leading to impairment include a combination of significant
underperformance relative to expected historical or projected future operating
results, significant changes in the manner of use of the acquired assets or the
strategy for the Company's overall business and significant negative industry or
economic trends. The assessment of recoverability is based on management's
estimate. Impairment is measured by comparing the carrying value to the
estimated and undiscounted future cash flows expected to result from the use of
the assets and their eventual disposition.

  RECLASSIFICATIONS

     Where appropriate, some items relating to the prior years have been
reclassified to conform to the presentation in the current year.

  INCOME TAXES

     SPSS applies the asset and liability method of accounting for income taxes
in which deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases and operating loss and tax credit carryforwards. Deferred tax assets and
liabilities are measured using enacted tax rates expected to apply to taxable
income in the years in which those temporary differences are expected to be
recovered or settled. The effect on deferred tax assets and liabilities of a
change in tax rates is recognized in income in the period that includes the
enactment date.

                                        18
<PAGE>
                           SPSS INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

  RECENT ACCOUNTING PRONOUNCEMENTS

     In May 2003, the FASB issued SFAS No. 150, Accounting for Certain Financial
Instruments with Characteristics of both Liabilities and Equity. The Company
adopted this effective July 1, 2003. SFAS No. 150 establishes standards for how
an issuer classifies and measures certain financial instruments with
characteristics of both liabilities and equity. SFAS No. 150 applies
specifically to a number of financial instruments that companies have
historically presented within their financial statements either as equity or
between the liabilities section and the equity section, rather than as
liabilities. SFAS 150 is effective for financial instruments entered into or
modified after May 31, 2003, and otherwise is effective as of January 1, 2004,
except for mandatorily redeemable financial instruments. For certain mandatorily
redeemable financial instruments, SFAS 150 will be effective on January 1, 2005.
The effective date has been deferred indefinitely for certain other types of
mandatorily redeemable financial instruments. The implementation of SFAS No. 150
applies to the Company's October 22, 2001 agreement with America Online, Inc.,
and its November 4, 2003 agreement with Data Distilleries B.V. Both agreements
included clauses relating to puttable share options that have resulted in the
presentation of this "Common Stock Subject to Repurchase" as temporary
shareholders' equity on the consolidated balance sheet. See Note 7.

     In December, 2004, the FASB issued SFAS No. 123R, "Share-Based Payment".
This statement is a revision of SFAS No. 123, Accounting for Stock-Based
Compensation, and supersedes APB Opinion No. 25, Accounting for Stock Issued to
Employees. SFAS 123R requires all share-based payments to employees, including
grants of employee stock options, to be recognized in the financial statements
based on their fair values. The provisions of this statement are effective for
interim or annual periods beginning after June 15, 2005. The Company is
currently evaluating the provisions of this revision to determine the impact on
its consolidated financial statements. It is, however, expected to have a
negative effect on consolidated net income.

     In December 2004, the FASB decided to defer the issuance of their final
standard on earnings per share (EPS) entitled "Earnings per Share -- an
Amendment to FAS 128". The final standard will be effective in 2005 and will
require retroactive application for all prior periods presented. The significant
proposed changes to the EPS computation are changes to the treasury stock method
and contingent share guidance for computing year-to-date diluted EPS, removal of
the ability to overcome the presumption of share settlement when computing
diluted EPS when there is a choice of share or cash settlement and inclusion of
mandatorily convertible securities in basic EPS. The Company is currently
evaluating the proposed provisions of this amendment to determine the impact on
its consolidated financial statements.

     In December 2004, the FASB issued FSP FAS 109-1, Application of FASB No.
109, Accounting for Income Tax, to the Tax Deduction on Qualified Production
Activities Provided by the American Jobs Creation Act of 2004. FSP FAS No. 109-1
clarifies SFAS No. 109's guidance that applies to the new tax deduction for
qualified domestic production activities. FSP No. 109-1 became effective upon
issuance and we believe that this pronouncement will have an insignificant
impact on our effective tax rate in 2005.

     In December 2004, the FASB issued FSP FAS 109-2, Accounting and Disclosure
Guidance for the Foreign Repatriation Provision within the American Jobs
Creation Act of 2004. FSP FAS 109-2 provides implementation guidance related to
the repatriation provision of the American Jobs Creation Act of 2004. The
Company has completed an assessment of earnings of foreign subsidiaries that
might be repatriated. At this time, the Company does not expect to repatriate
the earnings of our foreign subsidiaries as dividends to take advantage of this
tax deduction. The Company has started an evaluation of the effects of the
repatriation provision. The Company expects to complete our evaluation on the
effects of the repatriation provision within the first three fiscal quarters of
2005.

                                        19
<PAGE>
                           SPSS INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

(2) DOMESTIC AND FOREIGN OPERATIONS

     The net assets, net revenues and net income of international subsidiaries
as of and for the years ended December 31, 2002, 2003 and 2004 included in the
consolidated financial statements are summarized as follows:

<Table>
<Caption>
                                                                DECEMBER 31,
                                                       ------------------------------
                                                         2002       2003       2004
                                                       --------   --------   --------
<S>                                                    <C>        <C>        <C>
Working capital......................................  $ 11,415   $  1,413   $  7,175
                                                       ========   ========   ========
Excess of noncurrent assets over noncurrent
  liabilities........................................  $  9,207   $ 17,071   $ 16,995
                                                       ========   ========   ========
Net revenues.........................................  $102,460   $105,883   $122,409
                                                       ========   ========   ========
Net income...........................................  $  5,664   $  4,191   $ 13,200
                                                       ========   ========   ========
</Table>

     Net revenues per geographic region, attributed to countries based upon
point of sale, are summarized as follows:

<Table>
<Caption>
                                                          YEAR ENDED DECEMBER 31,
                                                       ------------------------------
                                                         2002       2003       2004
                                                       --------   --------   --------
<S>                                                    <C>        <C>        <C>
United States........................................  $106,020   $102,484   $101,665
                                                       --------   --------   --------
United Kingdom.......................................    30,429     28,584     31,701
The Netherlands......................................    15,289     18,982     21,943
Japan................................................    16,126     18,608     21,032
Germany..............................................    10,613     10,830     13,849
France...............................................     9,808      8,994     10,475
Other................................................    20,195     19,885     23,409
                                                       --------   --------   --------
Total International..................................   102,460    105,883    122,409
                                                       --------   --------   --------
  Total revenues.....................................  $208,480   $208,367   $224,074
                                                       ========   ========   ========
</Table>

     Long-lived assets, excluding restricted cash and long-term deferred tax
assets, per geographic region are summarized as follows:

<Table>
<Caption>
                                                                 DECEMBER 31,
                                                              ------------------
                                                                2003      2004
                                                              --------   -------
<S>                                                           <C>        <C>
United States...............................................  $ 84,942   $80,040
                                                              --------   -------
United Kingdom..............................................     1,118     3,774
The Netherlands.............................................    12,301     9,291
Japan.......................................................     1,740     2,027
Germany.....................................................       226       137
France......................................................       607       459
Other.......................................................     1,929     1,019
                                                              --------   -------
Total International.........................................    17,921    16,707
                                                              --------   -------
  Total long-lived assets...................................  $102,863   $96,747
                                                              ========   =======
</Table>

                                        20
<PAGE>
                           SPSS INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

(3) PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS

     Property, equipment and leasehold improvements consist of the following at
December 31:

<Table>
<Caption>
                                                                2003       2004
                                                              --------   --------
<S>                                                           <C>        <C>
Land and building...........................................  $  2,889   $     --
Furniture, fixtures, and office equipment...................    15,667     15,934
Computer equipment and software.............................    63,665     68,218
Leasehold improvements......................................    13,192     13,331
                                                              --------   --------
Balance, cost -- end of year................................    95,413     97,483
Less accumulated depreciation and amortization..............   (67,642)   (76,003)
                                                              --------   --------
Balance, net -- end of year.................................  $ 27,771   $ 21,480
                                                              ========   ========
</Table>

     During 2002, 2003 and 2004, SPSS capitalized $5,541, $1,109 and $792,
respectively, and amortized $461, $607 and $1,414, respectively, of internal-use
computer software.

     SPSS purchased Siebel technology in June 2001 as part of its effort to
replace current systems for sales force automation and technical support. An
important consideration in this purchase was the designation by Siebel of SPSS
as a Strategic Software Partner in the Siebel Alliance Program. During 2003,
SPSS terminated its Siebel CRM implementation due to difficulties with the
architecture of the Siebel technology, its high projected costs of
implementation and ownership, and the termination in October 2003 of the
strategic partnership. As a result, in December 2003, the Company wrote off
approximately $4,447 of internal use computer software related to the
termination of its Siebel CRM implementation. SPSS is currently implementing
sales force automation software provided by Salesforce.com. During 2004, the
Company determined that approximately $1,505 of computer equipment and software
no longer had continuing value, and was written off in the consolidated
financial statements. Additionally, in 2004, the Company sold property that
previously held the SPSS Limited Quantime offices in London, England. The
property was sold total proceeds of $2,633 and the Company recognized a gain on
the sale of $771.

(4) SOFTWARE DEVELOPMENT COSTS AND PURCHASED SOFTWARE

     Activity in capitalized software is summarized as follows:

<Table>
<Caption>
                                                                DECEMBER 31,
                                                              -----------------
                                                               2003      2004
                                                              -------   -------
<S>                                                           <C>       <C>
Balance, net -- beginning of year...........................  $26,672   $26,826
Additions...................................................    8,874     8,116
Acquisitions................................................      698        --
Product translations........................................      736     1,092
Write-down to net realizable value recorded in cost of
  license and maintenance revenues -- software write-offs...   (1,961)       --
Write-down to net realizable value due to acquisition.......     (589)       --
Other.......................................................       (4)      (50)
Amortization expense charged to cost of license and
  maintenance revenues......................................   (7,600)   (7,806)
                                                              -------   -------
Balance, net -- end of year.................................  $26,826   $28,178
                                                              =======   =======
</Table>

                                        21
<PAGE>
                           SPSS INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     The components of net capitalized software are summarized as follows:

<Table>
<Caption>
                                                                 DECEMBER 31,
                                                              -------------------
                                                                2003       2004
                                                              --------   --------
<S>                                                           <C>        <C>
Product translations........................................  $  7,829   $  8,920
Acquired software technology................................    13,844     14,649
Capitalized software development costs......................    32,085     39,347
                                                              --------   --------
Balance, cost -- end of year................................    53,758     62,916
Accumulated amortization....................................   (26,932)   (34,738)
                                                              --------   --------
Balance, net -- end of year.................................  $ 26,826   $ 28,178
                                                              ========   ========
</Table>

     Total software development expenditures, including amounts expensed as
incurred, amounted to approximately $52,693, $53,777, and $56,973 for the years
ended December 31, 2002, 2003 and 2004, respectively.

     Included in acquired software technology at December 31, 2003 and 2004 is
$1,368 and $1,117, respectively, of technology, net of accumulated amortization,
resulting from the merger with NetGenesis Corp. Also included in acquired
software technology at December 31, 2003 and 2004 is $661 and $459,
respectively, of technology resulting from the purchase of LexiQuest and netExs,
both of which occurred in 2002 (see Note 7).

     During 2003, the Company reduced the carrying value of $1,965 of net
capitalized software technology to net realizable value. Additionally, the
Company wrote off $589 of net capitalized software technology made redundant
with the acquisition of Data Distilleries, B.V.

(5) GOODWILL AND INTANGIBLE ASSETS

     Goodwill is subject to at least annual assessments for impairment by
applying a fair-value based test. An acquired intangible asset is required to be
separately recognized if the benefit of the intangible asset is obtained through
contractual or other legal rights, or if the asset can be sold, transferred,
licensed, rented or exchanged, regardless of the acquirer's intent to do so.
Based on an analysis of economic characteristics and how it is operated, SPSS
concluded it has a single reporting unit. The Company's policy is to conduct an
impairment test for goodwill at December 31 of each year or when other
impairment indicators are present. As of December 31, 2003 and 2004, SPSS
determined that no impairment loss was required.

                                        22
<PAGE>
                           SPSS INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     Intangible asset data are as follows:

<Table>
<Caption>
                                                              DECEMBER 31,
                                            -------------------------------------------------
                                                     2003                      2004
                                            -----------------------   -----------------------
                                             GROSS                     GROSS
                                            CARRYING   ACCUMULATED    CARRYING   ACCUMULATED
                                             AMOUNT    AMORTIZATION    AMOUNT    AMORTIZATION
                                            --------   ------------   --------   ------------
<S>                                         <C>        <C>            <C>        <C>
Amortizable intangible assets:
  Other intangible assets -- Data
     Distilleries customer
     relationships........................  $ 1,386       $ (33)      $ 1,522       $(231)
  Other intangible assets -- ISL
     trademark............................      400        (200)          400        (240)
Unamortizable intangible assets:
  Goodwill................................   42,253                    42,197
  Other intangible assets.................    1,827                     1,827
Aggregate amortization expense:
  For the year ended December 31, 2004....                                238
Estimated amortization expense:
  For the year ended December 31, 2005....                                257
  For the year ended December 31, 2006....                                257
  For the year ended December 31, 2007....                                257
  For the year ended December 31, 2008....                                257
  For the year ended December 31, 2009....                                257
</Table>

     The aggregate amortization expense for the years ended December 31, 2002,
2003 and 2004 was $40, $73, and $238, respectively.

     The following tables present the changes in the carrying amount of goodwill
and other intangibles as of December 31, 2003 and December 31, 2004:

<Table>
<Caption>
                                                                DECEMBER 31, 2003
                                                              ----------------------
                                                              GOODWILL   INTANGIBLES
                                                              --------   -----------
<S>                                                           <C>        <C>
Balance at beginning of year................................  $36,040      $2,085
Amortization expense........................................       --         (73)
Adjustments to previously recorded intangibles (See Note
  7)........................................................       --         (18)
Adjustments to previously recorded goodwill (See Note 7)....     (575)         --
Goodwill and intangibles acquired (See Note 7)..............    6,788       1,386
                                                              -------      ------
Balance at end of year......................................  $42,253      $3,380
                                                              =======      ======
</Table>

<Table>
<Caption>
                                                                DECEMBER 31, 2004
                                                              ----------------------
                                                              GOODWILL   INTANGIBLES
                                                              --------   -----------
<S>                                                           <C>        <C>
Balance at beginning of year................................  $42,253      $3,380
Amortization expense........................................       --        (238)
Adjustments to previously recorded goodwill.................     (554)         --
Translation.................................................      498         136
                                                              -------      ------
Balance at end of year......................................  $42,197      $3,278
                                                              =======      ======
</Table>

                                        23
<PAGE>
                           SPSS INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

(6) INTANGIBLE ASSETS

     Intangible assets consist of the following at December 31:

<Table>
<Caption>
                                                           2003     2004    USEFUL LIVES
                                                          ------   ------   ------------
<S>                                                       <C>      <C>      <C>
Trademarks..............................................  $  400   $  400   10 years
Customer relationships..................................   1,386    1,522    7 years
                                                          ------   ------
                                                           1,786    1,922
Less accumulated amortization...........................    (233)    (471)
                                                          ------   ------
                                                           1,553    1,451
Unamortizable trademarks................................   1,827    1,827   Indefinite
                                                          ------   ------
Total intangible assets, net............................  $3,380   $3,278
                                                          ======   ======
</Table>

(7) ACQUISITIONS AND DIVESTITURES

  ACQUISITIONS

  America Online Digital Marketing Services

     On October 22, 2001, SPSS entered into a strategic alliance with America
Online, Inc. (AOL) through its Digital Marketing Services (DMS) subsidiary, in
which SPSS acquired certain operating assets and the exclusive rights to
distribute survey sample data drawn from AOL members and users of AOL's other
interactive properties. The agreement provided SPSS additional opportunities to
market its products to market research partners and provide revenues from
services provided to current and future customers. Under this agreement, SPSS
was to pay AOL $42,000 in consideration over four years and assume primary
responsibility for servicing the current group of AOL market research partners.
Consideration due to AOL was in the form of $12,000 of SPSS common stock and
$30,000 in cash.

     The non-contingent purchase price, consisting of common stock of $3,000 and
$1,000 in cash, was allocated to the estimated fair value of the assets received
based upon a third party valuation and is summarized as follows:

<Table>
<Caption>
                                                          PURCHASED              PURCHASE
COMPANY NAME                                              SOFTWARE    GOODWILL    PRICE
------------                                              ---------   --------   --------
<S>                                                       <C>         <C>        <C>
AOL.....................................................   $2,000      $2,000     $4,000
</Table>

     Payments made by SPSS for services received from AOL subsequent to the
acquisition are recorded as expense when the services are rendered. Payments
made by the Company included cash and common stock. The Stock Purchase Agreement
included provisions that required SPSS to purchase the stock back from AOL if
the Company was unable to maintain the effectiveness of a registration statement
for AOL to sell the stock. Accordingly, the common stock is classified as
temporary equity in the consolidated balance sheet as "Common Stock Subject to
Repurchase." Upon the adoption SFAS No. 150, the common stock was reclassified
to permanent equity. Also on July 1, 2003, the estimated fair value of the put
obligation of $150 was reclassified as a liability from permanent equity.

     On October 14, 2003, the Company entered into an amended and restated Stock
Purchase Agreement and an amended and restated Strategic Online Research
Services Agreement with AOL, effective as of October 1, 2003. The amended and
restated agreements replaced the original agreements entered into between the
parties on October 22, 2001. Under these amended and restated agreements, SPSS
retained the exclusive right to provide researchers with survey respondents
drawn from the millions of Opinionplace.com visitors throughout AOL's
interactive properties. The primary amendments reduce the remaining term of the
original

                                        24
<PAGE>
                           SPSS INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

agreement from two years to one year and make the following adjustments to the
financial obligations of SPSS to AOL:

<Table>
<Caption>
                                                                                       AMENDED
                                                     ORIGINAL AGREEMENT               AGREEMENT
                                           ---------------------------------------   -----------
                                              TOTAL         PAID        REMAINING     REMAINING
                                           OBLIGATIONS   OBLIGATIONS   OBLIGATIONS   OBLIGATIONS
                                           -----------   -----------   -----------   -----------
<S>                                        <C>           <C>           <C>           <C>
Cash payments...........................     $30,000       $15,500       $14,500       $4,389
Stock payments..........................     $12,000       $ 6,000       $ 6,000       $    0
                                             -------       -------       -------       ------
</Table>

     Other provisions specify conditions for subsequent extensions of the
Research Services Agreement, enable stronger joint management oversight,
strengthen SPSS marketing efforts, and improve the experience of survey
participants.

  LexiQuest, S.A.

     On January 31, 2002, SPSS acquired all of the issued and outstanding shares
of capital stock of LexiQuest, S.A., a corporation organized under the laws of
France. The terms and conditions of the acquisition are specified in a Stock
Purchase Agreement, dated as of January 31, 2002 and amended as of March 16,
2002, by and among SPSS, LexiQuest and the owners of all of the issued and
outstanding shares of capital stock of LexiQuest. Under French law, LexiQuest
employees retained options to purchase shares of LexiQuest capital stock, which
could be exercised in the future to acquire a de minimis percentage of
LexiQuest's issued and outstanding shares of capital stock.

     The aggregate purchase price for all of the issued and outstanding shares
of capital stock of LexiQuest was determined by the parties in arms-length
negotiations and consisted of guaranteed and contingent components. The
guaranteed portion of the purchase price consisted of a payment of $2,500. SPSS
was not required to make any contingent payments to the former owners of
LexiQuest because the contribution generated by the LexiQuest assets did not
meet the targeted levels during 2002 and 2003.

     Under the terms of the stock purchase agreement and a separate escrow
agreement, the guaranteed portion of the purchase price was deposited with Bank
One NA (f/k/a American National Bank and Trust Company of Chicago) as escrow
agent. The parties entered into the separate escrow agreement to establish an
escrow fund of $2,500 to compensate SPSS for any losses it might incur by reason
of any breach of: (a) the representations and warranties of LexiQuest or (b) any
covenant or obligation of LexiQuest or the former shareholders of LexiQuest,
identified in the stock purchase agreement. The guaranteed portion of the
purchase price was required to remain in escrow for a one-year period, or until
all of the conditions for its release were satisfied under the terms of the
stock purchase agreement and the escrow agreement. On January 31, 2003, SPSS
made a claim against the escrow fund. SPSS and the LexiQuest shareholder
representative settled this claim in the second fiscal quarter of 2004 and SPSS
received approximately $670 which resulted in an adjustment to decrease goodwill
by $434.

     The purchase price was allocated to the estimated fair value of the assets
received and liabilities assumed based upon a third party valuation which are
summarized as follows:

<Table>
<Caption>
                                        ACQUIRED                             CAPITALIZED
                           PURCHASED   IN-PROCESS              LIABILITIES     MERGER      PURCHASE
COMPANY NAME               SOFTWARE    TECHNOLOGY   GOODWILL     ASSUMED        COSTS       PRICE
------------               ---------   ----------   --------   -----------   -----------   --------
<S>                        <C>         <C>          <C>        <C>           <C>           <C>
LexiQuest................    $770         $150       $7,468      $(3,477)      $(2,845)     $2,066
</Table>

  netExs LLC

     On June 20, 2002, SPSS acquired the assets described below which
constituted a business from netExs LLC, a Wisconsin limited liability company.
The terms and conditions of the asset purchase are specified in

                                        25
<PAGE>
                           SPSS INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

an Asset Purchase Agreement, dated June 20, 2002, by and among SPSS, netExs and
the members of netExs listed as signatories thereto.

     The assets purchased by SPSS include: (a) all ownership rights in netExs
software and related documentation, copyrights, trademarks, service marks, brand
names, trade names, trade dress, commercial symbols and other indications of
origin, patents and applications for patents, proprietary information and trade
secrets and other proprietary rights; (b) identified tangible personal property
of netExs; (c) identified accounts and accounts receivable; and (d) identified
contracts.

     The technology acquired from netExs consists of zero-client Web-enabled
user interface technology for query and reporting functions that are tightly
integrated with Microsoft SQL Server 2000 Analysis Services. SPSS considers the
acquired technology important to serving the analytical reporting needs of the
sizeable number of its customers and prospects that it believes are adopting
Microsoft's platform.

     The aggregate purchase price for the netExs assets was determined by the
parties in arms-length negotiations and consisted of guaranteed and contingent
payments. The guaranteed portion of the purchase price in the amount of $1,000
was delivered by SPSS to netExs.

     Under the terms of the Asset Purchase Agreement, the contingent portion of
the purchase price, which was capped at a total of $1,450 if fully earned during
fiscal years 2003, 2004 and 2005, would be paid to netExs if the net revenues
generated by the assets acquired during the annual periods (as defined in the
Asset Purchase Agreement) equaled or exceeded certain targeted projections. In
June 2004, pursuant to an agreement between SPSS and netExs, SPSS paid to netExs
the sum of $400 in full satisfaction of all obligations under the Asset Purchase
Agreement, including without limitation, the contingent payments, and in full
settlement of certain claims asserted by netExs.

     The following summary presents information concerning the purchase price
allocation for the netExs acquisition accounted for under the purchase price
method.

<Table>
<Caption>
                                        PURCHASED                           OTHER    PURCHASE
COMPANY NAME                            SOFTWARE    TRADEMARKS   GOODWILL   ASSETS    PRICE
------------                            ---------   ----------   --------   ------   --------
<S>                                     <C>         <C>          <C>        <C>      <C>
netExs................................    $242         $19         $941      $48      $1,250
</Table>

  Data Distilleries B.V.

     On November 4, 2003, SPSS, through SPSS International B.V., its wholly
owned subsidiary, acquired Data Distilleries B.V., a Netherlands-based developer
of analytic applications. The terms and conditions of the acquisition are
specified in a Stock Purchase Agreement, by and among SPSS, SPSS International
B.V. and the owners of all of the issued and outstanding shares of the capital
stock of Data Distilleries. The aggregate purchase price for all of the issued
and outstanding capital stock of Data Distilleries consists of guaranteed and
contingent payments. The guaranteed portion of the purchase price was paid at
closing and consisted of a payment of $1,000 in cash and 282 shares of SPSS
common stock valued at $5,311 for purposes of this transaction. The contingent
portion of the purchase price is required to be paid, if at all, at the end of
the first and second years following the closing. The Company's obligation to
make the contingent payments depends on the achievement of certain growth
targets for license and maintenance revenues from the Data Distilleries
applications. SPSS was not required to make any contingent payments to the
former owners of Data Distilleries during 2004 because these growth targets were
not met in 2004. If these growth targets are met at the end of the second year
following the closing, SPSS may be obligated to make a contingent payment in the
amount of up to $1,989 at current estimated exchange rates.

     In connection with the Data Distilleries transaction, SPSS incurred an
estimated $1,800 in transaction fees, including legal, valuation and accounting
fees. The purchase price of $6,311 has been allocated to the tangible and
identifiable intangible assets acquired and liabilities assumed on the basis of
their estimated fair

                                        26
<PAGE>
                           SPSS INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

values on the acquisition date. The results of operations of Data Distilleries
are included in the Consolidated Statements of Operations from the date of the
acquisition.

     The shares issued in the acquisition of Data Distilleries have been valued
in accordance with EITF Issue No. 99-12, "Determination of the Measurement Date
for the Market Price of Acquirer Securities Issued in a Purchase Business
Combination." In accordance with EITF No. 99-12, the Company has established
that the first date on which the number of our shares and the amount of other
consideration became fixed was November 4, 2003. Accordingly, the Company valued
the shares issued in the transaction at $18.84 per share utilizing the average
closing price for a few days before and after November 4, 2003.

     The acquisition of Data Distilleries was accounted for under SFAS No. 141
and certain specified provisions of SFAS No. 142. The following table summarizes
the estimated fair values of the tangible assets acquired and the liabilities
assumed at the date of acquisition:

<Table>
<Caption>
                                                                             CAPITALIZED
                       PURCHASED     CUSTOMER                 NET TANGIBLE     MERGER      PURCHASE
COMPANY NAME           SOFTWARE    RELATIONSHIPS   GOODWILL      ASSETS         COSTS       PRICE
------------           ---------   -------------   --------   ------------   -----------   --------
<S>                    <C>         <C>             <C>        <C>            <C>           <C>
Data Distilleries....    $698         $1,280        $6,788       $(698)        $(1,757)     $6,311
</Table>

     Under the terms of the November 4, 2003 Stock Purchase Agreement with Data
Distilleries, the Company was obligated to file a Registration Statement on Form
S-3 to register the potential resale of the 282 shares issued to Data
Distilleries shareholders in the transaction. This contingent obligation
required the Company to classify the common stock as temporary equity labeled
"Common Stock Subject to Repurchase" at December 31, 2003. Because the Company's
Annual Report on Form 10-K for fiscal year 2003 was not timely filed, SPSS
became ineligible to use Form S-3 and was not able to register the shares by the
required April 2004 filing date. The Company fulfilled its obligation under the
Stock Purchase Agreement by repurchasing from each former Data Distilleries
shareholder the number of shares of SPSS common stock received by such
shareholder in connection with this transaction. During April 2004, SPSS
notified the former shareholders of the Company's inability to properly register
these shares and through June 30, 2004, the Company repurchased all 282 shares
at a cost of $5,400. The Company has reflected the $5,400 cash payout of these
shares as a reduction of common stock subject to repurchase, which was recorded
as temporary shareholders' equity in the consolidated balance sheet at December
31, 2003.

  DIVESTITURES

     On December 29, 2003, the Company received its first payment in a
transaction with Systat Software, Inc., a subsidiary of Cranes Software
International Ltd. ("Systat"), pursuant to which Systat acquired from SPSS an
exclusive worldwide license to distribute the Sigma-series line of products for
a three-year period and purchased certain related assets. Pursuant to the
agreement, Systat assumed all responsibilities for the marketing and sales of
the products as well as their ongoing development and technical support. SPSS
also transferred to Systat all rights and obligations with respect to customers
and personnel and all fixed assets related to the Sigma-series products (the
"Related Assets"). In exchange for the exclusive worldwide license and Related
Assets, Systat was obligated to make cash payments to SPSS in the aggregate
amount of $13,000. The agreement between SPSS and Systat also grants to Systat
an option to purchase the licensed property. Systat may exercise this purchase
option for $1,000 within 180 days prior to the end of the three-year license
period.

     The $9,000 payment made by Systat to SPSS on December 29, 2003 includes the
initial $6,000 license fee and $3,000 in consideration of the related assets.
Systat was obligated to make additional license payments in the aggregate amount
of $3,000 in 2004, which is included in other current assets in the accompanying
Consolidated Balance Sheet at December 31, 2003, and a final license payment of
$1,000 in 2005. SPSS has received all of the license payments due in 2004 as of
December 31, 2004.

                                        27
<PAGE>
                           SPSS INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     The distribution license and sale of the Related Assets of the Sigma-series
product line was accounted for as a divestiture of a business. The sale resulted
in a gain of $8,577 during 2003. In addition to the net book value of the assets
sold, goodwill was reduced by $1,000 to reflect the estimated goodwill allocated
to this business. During 2004, SPSS recorded an $82 adjustment to reduce certain
professional fee accruals associated with this transaction.

(8) INVESTMENT IN CONSOLIDATED SUBSIDIARY

     On March 30, 2001, SPSS purchased 50% of the then-issued and outstanding
shares of common stock of Illumitek Inc. for $2,000. Subsequent to its initial
investment, SPSS issued Illumitek a note receivable of $3,250 due on December
31, 2004. In the fourth quarter of 2001, SPSS began advancing Illumitek funds to
meet ongoing obligations. Jack Noonan, President and Chief Executive Officer of
SPSS, and Mark Battaglia, the former President, SPSS Business Intelligence,
served as directors of Illumitek until September 30, 2002, the date on which
they resigned as Illumitek directors. Mr. Noonan also served as a member of the
Compensation Committee of the Board of Directors of Illumitek until September
30, 2002. Following their resignation, Illumitek's shareholders agreed to
terminate the company's operations, wind up its affairs and liquidate. This
decision was finalized by October 28, 2002. As part of the liquidation,
Illumitek agreed to transfer to SPSS, Illumitek's nViZn platform, in which SPSS
had been granted a security interest. nViZn is a development platform for
creating or embedding interactive, visual analysis applications that combine the
power of predictive analytics, data visualization, and user interactivity. In
exchange for the assignment of this asset, SPSS released Illumitek of its
obligations under the note receivable, pursuant to an Assignment and Release
Agreement dated October 31, 2002. SPSS acquired the nViZn platform, but did not
record an asset, as its recoverability was uncertain.

     Under the equity method of accounting, followed until September 30, 2001,
SPSS recorded a reduction in the value of its investment to reflect its portion
of Illumitek's net loss. Subsequent to September 30, 2001, the results and
accounts of Illumitek were consolidated with those of SPSS until its liquidation
in October 2002, at which time SPSS recorded a loss of $518.

(9) COMMITMENTS AND CONTINGENCIES

  OPERATING LEASES

     SPSS leases its office facilities, storage space, and some data processing
equipment under lease agreements expiring through the year 2012. Minimum lease
payments indicated below do not include costs such as property taxes,
maintenance, and insurance.

     The following is a schedule of future noncancellable minimum lease payments
required under operating leases as of December 31, 2004:

<Table>
<Caption>
YEAR ENDING DECEMBER 31,                                      AMOUNT
------------------------                                      -------
<S>                                                           <C>
2005........................................................  $11,271
2006........................................................    8,536
2007........................................................    5,999
2008........................................................    5,329
2009........................................................    4,762
Thereafter..................................................    9,736
                                                              -------
Total operating lease obligation............................  $45,633
                                                              =======
</Table>

     Rent expense related to operating leases was approximately $12,821, $13,392
and $14,409 during the years ended December 31, 2002, 2003 and 2004,
respectively.

                                        28
<PAGE>
                           SPSS INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

  HYPERION SOLUTIONS

     Through its strategic relationship with Hyperion Solutions, SPSS has rights
to distribute the Essbase/400 software while Hyperion Solutions maintains
limited distribution rights. Essbase/400 enables SPSS to reach a broader
customer base, including users of multidimensional analyses, and offers the
Company new partnering opportunities.

  LITIGATION

     SPSS has been named as a defendant in a lawsuit filed on December 6, 2002
in the United States District Court for the Southern District of New York, under
the caption Basu v. SPSS Inc., et al., Case No. 02CV9694. The complaint alleges
that, in connection with the issuance and initial public offering of shares of
common stock of NetGenesis Corp., the registration statement and prospectus
filed with the Securities and Exchange Commission in connection with the IPO
contained material misrepresentations and/or omissions. The alleged violations
of the federal securities laws took place prior to the effective date of the
merger in which the Company's acquisition subsidiary merged with and into
NetGenesis Corp. NetGenesis Corp. is now a wholly owned subsidiary of SPSS.
Other defendants to this action include the former officers and directors of
NetGenesis Corp. and the investment banking firms that acted as underwriters in
connection with the IPO. The plaintiff is seeking unspecified compensatory
damages, prejudgment and post-judgment interest, reasonable attorney fees,
experts' witness fees and other costs and any other relief deemed proper by the
Court. The Company is aggressively defending itself and plans to continue to
aggressively defend itself against the claims set forth in the complaint. The
Company and the named officers and directors filed an answer to the complaint on
July 14, 2003. At this time, the Company believes the lawsuit will be settled
with no material adverse effect on its results of operations, financial
condition, or cash flows.

     SPSS has been named as a defendant in a lawsuit filed on or about May 14,
2004, and amended on September 30, 2004, in the United States District Court for
the Northern District of Illinois, under the caption Fred Davis, Individually
and On Behalf of All Others Similarly Situated v. SPSS Inc., Jack Noonan, Edward
Hamburg and KPMG LLP, Case No. 04C3427. The complaint alleges that the
defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of
1934, and Rule 10b-5 promulgated thereunder. The complaint alleges that the
defendants failed to disclose and misrepresented a series of material adverse
facts regarding the Company's revenues. The complaint seeks to recover
unspecified compensatory damages, reasonable attorney fees, experts' witness
fees and other costs and any other relief deemed proper by the court on behalf
of all purchasers of the Company's securities between May 2, 2001 and March 30,
2004, although no court has determined that such persons constitute a proper
class. On December 15, 2004, SPSS, Mr. Noonan and Dr. Hamburg filed a motion to
dismiss the amended complaint. On January 28, 2005, the Lead Plaintiff filed a
memorandum in opposition to the motion to dismiss the amended complaint filed by
SPSS, Mr. Noonan and Dr. Hamburg. On February 18, 2005, SPSS, Mr. Noonan and Dr.
Hamburg filed a reply memorandum in support of their motion to dismiss. SPSS,
Mr. Noonan and Dr. Hamburg believe that the suit is without merit and intend to
defend vigorously against the allegations contained in the complaint.

     SPSS may also become party to various claims and legal actions arising in
the ordinary course of business.

                                        29
<PAGE>
                           SPSS INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

(10) OTHER NONCURRENT ASSETS

     Other noncurrent assets consist of the following at December 31:

<Table>
<Caption>
                                                               2003     2004
                                                              ------   ------
<S>                                                           <C>      <C>
Investments in nonmarketable equity securities..............  $  217   $   --
Deposits....................................................   1,145    1,385
Note receivable, less current portion.......................     840       --
Other.......................................................     431      229
                                                              ------   ------
Total other noncurrent assets...............................  $2,633   $1,614
                                                              ======   ======
</Table>

(11) FINANCING ARRANGEMENTS

     On March 31, 2003, SPSS entered into a four (4) year, $25 million credit
facility with Wells Fargo Foothill, Inc. (f/k/a Foothill Capital Corporation).
The Wells Fargo Foothill facility includes a four (4) year term loan in the
amount of $10,000, two revolving lines of credit and a letters of credit
facility not to exceed $3,000. The maximum amount SPSS may borrow under Revolver
A will depend upon the value of the Company's eligible accounts receivable
generated within the United States. Revolver B provides for a credit facility of
up to $3,500 provided that no event of default exists. As of December 31, 2004,
the Company had availability of $6,000 under the revolving lines of credit.

     The terms and conditions of the Wells Fargo Foothill credit facility are
specified in a Loan and Security Agreement, dated as of March 31, 2003, by and
between Foothill and SPSS. The term loan portion of the facility bears interest
at a rate of 2.5% above prime, with potential future interest rate reductions of
up to 0.5% in the interest rate based upon the Company's achievement of
specified EBITDA targets. One component of the revolving line of credit will
bear interest at a rate of prime plus 3.0%. On the remainder of the revolving
line of credit, SPSS may select interest rates of either prime plus 0.25% or
LIBOR plus 2.5% with respect to each advance made by Foothill. The credit fee
rate for letters of credit is 2.0% per annum times the daily balance of the
undrawn amount of all outstanding letters of credit. In May 2003, the Company
began paying down evenly the term loan of $10,000 over the four (4) year period
(i.e., $2,500 per year over four (4) years). As a result of the refinancing,
$6,000 of the Company's line of credit borrowings of $8,500 that existed as of
December 31, 2002 was classified as long-term. At December 31, 2004, SPSS had
$5,881 outstanding under its line of credit with Foothill, including $2,500
classified as current notes payable and the face amount of letters of credit
issued and outstanding under the existing credit facility totaled approximately
$893.

     The Wells Fargo Foothill facility requires SPSS to meet certain financial
covenants including minimum EBITDA targets and includes additional requirements
concerning, among other things, the Company's ability to incur additional
indebtedness, create liens on assets, make investments, engage in mergers,
acquisitions or consolidations where SPSS is not the surviving entity, sell
assets, engage in certain transactions with affiliates, and amend its
organizational documents or make changes in capital structure. Due to the
restatement of the Company's Consolidated Financial Statements, during 2004, the
Company was not in compliance with certain covenants related to timely delivery
of financial statements. In addition, the restatement may have rendered some
representations and warranties inaccurate and may have caused the Company to
fail to satisfy certain covenants. Moreover, the Company was not in compliance
with its EBITDA covenant as of December 31, 2004. SPSS has obtained all
appropriate waivers from Wells Fargo Foothill.

     The Wells Fargo Foothill facility is secured by all of the Company's assets
located in the United States. ShowCase Corporation, a Minnesota corporation and
wholly owned subsidiary of SPSS, and NetGenesis Corp., a Delaware corporation
and wholly owned subsidiary of SPSS, have guaranteed the obligations of SPSS
under the Loan and Security Agreement. This guaranty is secured by all of the
assets of ShowCase and NetGenesis.

                                        30
<PAGE>
                           SPSS INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

(12) OTHER INCOME

     Other income consists of the following:

<Table>
<Caption>
                                                             YEAR ENDED DECEMBER 31,
                                                             ------------------------
                                                             2002     2003      2004
                                                             -----   -------   ------
<S>                                                          <C>     <C>       <C>
Interest and investment income.............................  $ 875   $   891   $  485
Interest expense...........................................   (938)     (933)    (767)
Exchange gain on foreign currency transactions.............    752     1,770      896
Gain on divestiture of Sigma-series product line...........     --     8,577       82
International research and development credit..............     --        --      976
Write-down in e-Intelligence investment....................     --        --     (217)
Other......................................................     --        28       25
                                                             -----   -------   ------
Total other income.........................................  $ 689   $10,333   $1,480
                                                             =====   =======   ======
</Table>

     As noted above, the Company recognized a gain of $8,577 on the divestiture
of the Sigma-series product line during the year ended December 31, 2003. During
2004, SPSS recorded an adjustment to reduce certain professional fee accruals
associated with this transaction. See additional discussion in Note 7.

(13) SPECIAL GENERAL AND ADMINISTRATIVE CHARGES, AND MERGER-RELATED COSTS

     Special general and administrative charges were $9,037 in 2002 and $6,104
in 2003, or 4% and 3%, of net revenues in 2002 and 2003, respectively. Special
general and administrative charges in 2002 included costs related to the
restructuring of the Company's field operations implemented in August 2002 and
costs related to the NetGenesis, LexiQuest and netExs transactions, such as
severance and retention payments of $4,030, lease cancellation payments of $615,
professional service fees of $2,300, and other costs. Special general and
administrative charges in 2003 include a write-off of $4,447 due to the
termination of the Company's Siebel CRM software implementation (see Note 3) and
$1,657 of severance, bonus and travel costs primarily related to the Data
Distilleries acquisition.

     SPSS incurred merger-related costs of $2,260 in 2002. Merger-related
expenses relate to the Company's acquisitions made during 2002 (see Note 7).
Expenses in 2002 included professional fees of $600, severance of $1,460 and
other costs of $200. These expenses were incurred subsequent to the consummation
of the transactions. Certain other costs incurred prior to the consummation of
the transactions were capitalized as part of the purchases.

     As of December 31, 2004, the Company has approximately $27 in liabilities
remaining related to these charges and expects to pay them during the year ended
December 31, 2005.

(14) INCOME TAXES

     Income (loss) before income taxes and minority interest consists of the
following:

<Table>
<Caption>
                                                           YEAR ENDED DECEMBER 31,
                                                        -----------------------------
                                                          2002      2003       2004
                                                        --------   -------   --------
<S>                                                     <C>        <C>       <C>
Domestic..............................................  $(27,935)  $ 3,126   $(11,764)
Foreign...............................................    11,556     7,335     19,820
                                                        --------   -------   --------
Pretax income (loss)..................................  $(16,379)  $10,461   $  8,056
                                                        ========   =======   ========
</Table>

                                        31
<PAGE>
                           SPSS INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     Income tax expense (benefit) consists of the following:

<Table>
<Caption>
                                                          CURRENT   DEFERRED    TOTAL
                                                          -------   --------   -------
<S>                                                       <C>       <C>        <C>
Year ended December 31, 2002
  U.S. Federal..........................................  $   310   $(5,120)   $(4,810)
  State.................................................     (293)       89       (204)
  Foreign...............................................    6,376      (484)     5,892
                                                          -------   -------    -------
  Income tax expense (benefit)..........................  $ 6,393   $(5,515)   $   878
                                                          =======   =======    =======
Year ended December 31, 2003
  U.S. Federal..........................................  $(8,018)  $ 5,371    $(2,647)
  State.................................................     (668)    1,318        650
  Foreign...............................................    7,942    (4,798)     3,144
                                                          -------   -------    -------
  Income tax expense (benefit)..........................  $  (744)  $ 1,891    $ 1,147
                                                          =======   =======    =======
Year ended December 31, 2004
  U.S. Federal..........................................  $    96   $(3,231)   $(3,135)
  State.................................................       --      (972)      (972)
  Foreign...............................................    5,755       865      6,620
                                                          -------   -------    -------
  Income tax expense (benefit)..........................  $ 5,851   $(3,338)   $ 2,513
                                                          =======   =======    =======
</Table>

     For the years ended December 31, 2002, 2003 and 2004, the reconciliation of
the statutory Federal income tax rate of 34% to the Company's effective tax rate
is as follows:

<Table>
<Caption>
                                                            YEAR ENDED DECEMBER 31,
                                                          ---------------------------
                                                           2002      2003      2004
                                                          -------   -------   -------
<S>                                                       <C>       <C>       <C>
Income taxes using the Federal statutory rate of 34%....  $(5,569)  $ 3,556   $ 2,739
State income taxes, net of Federal tax benefit..........     (246)      389      (641)
Foreign taxes at net rates different from U.S. Federal
  rates.................................................        5       (75)     (855)
Foreign tax credit......................................   (1,829)   (1,018)     (204)
Deemed income from foreign operations...................    3,739     1,636       265
Nondeductible costs for income tax purposes.............      706       340       271
Foreign income exclusion................................       --      (165)     (544)
Nondeductible loss arising from consolidated
  subsidiary............................................    2,664        --        --
Change in valuation allowance...........................     (866)   (2,474)    2,590
Other, net..............................................    2,274    (1,042)   (1,108)
                                                          -------   -------   -------
Income tax expense......................................  $   878   $ 1,147   $ 2,513
                                                          =======   =======   =======
</Table>

                                        32
<PAGE>
                           SPSS INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     The tax effects of temporary differences that give rise to significant
portions of the deferred tax assets/(liabilities) at December 31, 2003 and 2004,
are presented below:

<Table>
<Caption>
                                                               2003       2004
                                                              -------   --------
<S>                                                           <C>       <C>
  Deferred revenues.........................................  $18,210   $ 12,571
  Foreign tax credit carryforwards..........................    4,930      6,690
  Research and experimentation credit carryforwards.........    2,604      3,265
  Acquisition-related items.................................    6,057      6,776
  Depreciation, amortization and capitalized interest.......   (2,216)      (648)
  Capitalized software costs................................   (7,076)    (8,114)
  Net operating loss carryforwards..........................   10,104     27,755
  Foreign currency loss.....................................     (963)    (1,875)
  Inventories...............................................       84         88
  Allowances, accruals and other............................    3,486      2,500
                                                              -------   --------
Total gross deferred income taxes...........................   35,220     49,008
  Less valuation allowance..................................   (8,687)   (11,277)
                                                              -------   --------
Net deferred income taxes...................................  $26,533   $ 37,731
                                                              =======   ========
Balance sheet classification:
  Current deferred income taxes.............................  $14,023   $ 15,503
  Noncurrent deferred income tax asset......................   13,142     22,860
  Noncurrent deferred income tax liability..................     (632)      (632)
                                                              -------   --------
Net deferred income taxes...................................  $26,533   $ 37,731
                                                              =======   ========
</Table>

     During 2004, the deferred tax assets increased and prepaid income taxes
decreased by approximately $7,700 as a result of filing amended 2001 and 2002
tax returns and reconciling the 2003 tax return amounts to 2003 provision
amounts reflecting financial statement restatements in the tax returns and net
operating loss carryforwards.

     In assessing the realizability of deferred tax assets, management considers
whether it is more likely than not that some portion or all of the deferred tax
assets will not be realized. The ultimate realization of deferred tax assets is
dependent upon the generation of future taxable income during the periods in
which those temporary differences become deductible. Management considers the
scheduled reversals of deferred tax liabilities, projected future taxable
income, and tax planning strategies in making this assessment. Management
believes it is more likely than not that the Company will realize the benefits
of these deductible differences, net of the existing valuation allowance at
December 31, 2004. The Company has not provided a valuation allowance on the
amount of deferred tax assets that it estimates will be utilized as a result of
the execution of these strategies. If the future taxable income is less than the
amount that has been assumed in assessing the recoverability of the deferred tax
assets, then an increase in the valuation allowance will be required, with a
corresponding increase to income tax expense.

     As of December 31, 2004, SPSS had a U.S. net operating loss carryforward of
approximately $48,922, the majority of which begins to expire in 2021. The
Company has provided a valuation on $1,091 of the U.S. net operating loss
carryforwards. This valuation allowance relates to net operating loss
carryforwards of U.S. subsidiaries related to foreign subsidiaries which
management believes are not likely to be realized based on information available
as of December 31, 2004. In addition, as of December 31, 2004, the Company has
foreign net operating loss carryforwards of approximately $25,576 against which
the Company has provided a valuation allowance of $7,352.
                                        33
<PAGE>
                           SPSS INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     As of December 31, 2004, SPSS had a Federal research and experimentation
credit carryforward and a foreign tax credit carryforward of approximately
$3,265 and $6,690, respectively, which both begin to expire in 2010. The Company
has provided a valuation allowance of $936 and $1,898, respectively for these
items at December 31, 2004.

     Federal income and foreign withholding taxes have not been provided on
$83,983 of undistributed earnings of international subsidiaries of which $12,697
has been taxed in the United States. The Company has not recognized a deferred
tax liability for the undistributed earnings of its foreign operations that
arose in 2004 and prior years because the Company currently does not expect to
remit those earnings in the foreseeable future. Determination of the amount of
unrecognized deferred tax liability related to undistributed earnings of foreign
subsidiaries is not practicable.

     On October 22, 2004, the American Jobs Creation Act of 2004 (AJCA) was
signed into law. The AJCA introduced a limited time 85% dividends received
deduction on the repatriation of certain foreign earnings. The deduction would
result in an approximate 5.25% federal tax rate on the repatriated earnings. To
qualify for the deduction, the earnings must be reinvested in the United States
pursuant to a domestic reinvestment plan established by a company's chief
executive officer and approved by the company's board of directors.
Additionally, certain other criteria, as outlined in the AJCA, must also be met.

     The Company may elect to apply this provision to qualifying earnings
repatriations in fiscal 2005. The Company has started an evaluation of the
effects of the repatriation provision. However, the Company does not expect to
be able to complete this evaluation until after congress or the Treasury
Department provides additional clarifying language on key elements of the
provision. In January 2005, the Treasury Department began to issue the first of
a series of clarifying guidance documents related to this provision. The Company
expects to complete the evaluation on the effects of the repatriation provision
within the first three fiscal quarters of 2005.

     The range of possible amounts that the Company is considering for
repatriation under this provision is between zero and $25 million. While the
Company estimates that the related potential range of additional income tax is
between zero and $2.5 million, this estimation is subject to change following
technical correction legislation that we believe is forthcoming from Congress.

(15) EMPLOYEE BENEFIT PLANS

     Qualified employees may participate in the 401(k) savings plan by
contributing up to the lesser of 15% of eligible compensation or limits imposed
by the U.S. Internal Revenue Code in a calendar year. SPSS makes a matching
contribution of $0.5 for employees in the plan the entire year. SPSS made
contributions of $329, $372, and $292 for 2002, 2003, and 2004, respectively.
These matching contributions were recorded as compensation expense.

     In 1993, SPSS implemented an employee stock purchase plan. The SPSS
purchase plan provides that eligible employees may contribute up to 10% of their
base salary per quarter towards the quarterly purchase of SPSS common stock. The
employee's purchase price is 85% of the fair market value of the stock at the
close of the first business day after the quarterly offering period. The total
number of shares issuable under the purchase plan is 100. Effective October
2000, the plan was amended to calculate the share price as 85% of the lower of:
i) the closing market price of the stock on the first trading day of the
quarter, or ii) the closing market price for the stock on the last trading day
after the end of the quarter. Additionally, in October 2000, a non-qualified
plan was adopted by the Company's shareholders, but not utilized until 2004.
During 2002, 34 shares were issued under the qualified purchase plan at market
prices ranging from $11.57 to $17.54. During 2003, 31 shares were issued under
the qualified purchase plan at market prices ranging from $11.05 to $15.48.
During 2004, 6 shares were issued under the qualified purchase plan at a market
price of $17.88. Because no additional shares are available for issuance under
the qualified purchase plan, SPSS terminated

                                        34
<PAGE>
                           SPSS INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

the qualified purchase plan in the first quarter of 2005. During 2004, 17 shares
were issued under the non-qualified purchase plan at market prices ranging from
$13.33 - $18.40.

(16) STOCK OPTIONS AND EQUITY TRANSACTIONS

     On January 16, 1992, SPSS adopted a Stock Option Plan for some key
employees. Options vest either immediately or over a four-year period. In June
1995, the stockholders of SPSS adopted the 1995 Equity Incentive Plan which
authorizes the Board of Directors, under some conditions, to grant stock options
and shares of restricted stock to directors, officers, other key executives,
employees and independent contractors.

     At the 1996 meeting of SPSS shareholders, the shareholders ratified the
Second Amended and Restated 1995 Equity Incentive Plan, which was amended, among
other things, to increase the shares allowed to be granted under the Plan from
600 to 1,050. In May 1999, SPSS approved the Third Amended and Restated 1995
Equity Incentive Plan, which was amended to clarify the rules governing the
treatment of attestation of shares given to SPSS for the exercise price of
options.

     In May 1999, SPSS adopted the 1999 Employee Equity Incentive Plan, which
authorizes the Board, under some conditions, to grant stock options and shares
of restricted stock to non-executive officer employees and independent
contractors of SPSS.

     In February 2001, the stockholders of SPSS adopted the 2000 Equity
Incentive Plan which authorizes the Board of Directors, under some conditions,
to grant stock options and shares of restricted stock to directors, officers,
other key executives, employees and independent contractors. There are 500
shares reserved for issuance under this plan.

     In 2002, SPSS terminated each of its existing equity incentive plans and
the stockholders of SPSS adopted the 2002 Equity Incentive Plan. This plan was
amended and restated in October 2004. The plan authorizes the Board of Directors
to award stock options and a variety of other equity incentives to directors,
executive officers, other key executives, employees and independent contractors
of SPSS and any of its subsidiaries. Under this plan, there are 80 shares
reserved for issuance upon the exercise of option rights that qualify as
incentive stock options and 2,420 shares reserved for issuance upon the exercise
of option rights that qualify as nonqualified stock options, appreciation rights
or as restricted shares.

     The Company recognized expense of approximately $207, $240 and $240 for the
fiscal years ended December 31, 2002, 2003 and 2004, respectively, related to
stock option grants to non-employees and restricted stock and restricted stock
unit grants to employees.

                                        35
<PAGE>
                           SPSS INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     Additional information regarding options is as follows:

<Table>
<Caption>
                                        2002                 2003                 2004
                                 ------------------   ------------------   ------------------
                                           WEIGHTED             WEIGHTED             WEIGHTED
                                           AVERAGE              AVERAGE              AVERAGE
                                           EXERCISE             EXERCISE             EXERCISE
                                 OPTIONS    PRICE     OPTIONS    PRICE     OPTIONS    PRICE
                                 -------   --------   -------   --------   -------   --------
<S>                              <C>       <C>        <C>       <C>        <C>       <C>
Outstanding at beginning of
  year.........................   3,493     $21.18     4,167     $19.23     4,520     $19.01
  Granted......................   1,177      16.65       873      15.88       773      16.78
  Forfeited and expired........    (358)     33.58      (305)     20.50      (341)     19.54
  Exercised....................    (145)      9.80      (215)      8.33      (257)     14.17
                                  -----     ------     -----     ------     -----     ------
Outstanding at end of year.....   4,167     $19.23     4,520     $19.01     4,695     $18.87
                                  =====     ======     =====     ======     =====     ======
Options exercisable at year
  end..........................   2,497     $20.30     2,875     $20.17     3,047     $19.93
                                  =====     ======     =====     ======     =====     ======
</Table>

     The weighted average fair value of options granted during 2002, 2003, and
2004 was $8.10, $7.67 and $8.52, respectively.

     The following table summarizes information about stock options outstanding
at December 31, 2004:

<Table>
<Caption>
                                          WEIGHTED
                                           AVERAGE     WEIGHTED                 WEIGHTED
                                          REMAINING    AVERAGE                  AVERAGE
                             OPTIONS     CONTRACTUAL   EXERCISE     OPTIONS     EXERCISE
RANGE OF EXERCISE PRICES   OUTSTANDING      LIFE        PRICE     EXERCISABLE    PRICE
------------------------   -----------   -----------   --------   -----------   --------
<S>                        <C>           <C>           <C>        <C>           <C>
      $0.72- 3.24                11         1.88        $ 2.91          11       $ 2.91
       4.26- 4.50                13         3.05          4.46          13         4.46
       5.98- 10.93                7         3.08          7.14           7         7.14
      11.00- 15.92            1,300         7.29         14.46         660        14.42
      16.00- 17.25              793         8.80         16.74         256        16.64
      17.50- 19.09            1,010         6.69         18.64         797        18.59
      19.25- 24.00            1,083         5.61         21.16         826        21.02
     25.125- 34.15              445         3.15         26.72         444        26.72
      40.91- 199.74              33         5.16         84.08          33        84.08
                              -----         ----        ------       -----       ------
                              4,695         6.59        $18.87       3,047       $19.93
                              =====         ====        ======       =====       ======
</Table>

(17) RELATED PARTY TRANSACTIONS

     During 2004, Norman Nie, the Chairman of the Board of Directors of SPSS,
received $140 for consulting work on a part-time basis through the Company's
consulting agreements with Norman H. Nie Consulting L.L.C. ("Nie Consulting").

     The Company amended and restated its consulting agreement with Nie
Consulting, effective as of January 1, 2005. The terms of the Amended and
Restated Consulting Agreement, dated as of January 1, 2005, between SPSS and Nie
Consulting (the "Amended Consulting Agreement") superseded and replaced the
terms of the Company's original consulting agreement with Nie Consulting.
Pursuant to the Amended Consulting Agreement, Nie Consulting will assist SPSS
with product management for the SPSS family of products and will assist the SPSS
technology group with the development of statements of work and prioritization
of new products and features in the areas of statistics, survey research and
text mining. The Amended Consulting Agreement provides that Nie Consulting is to
receive compensation for these consulting services in the amount of $15 per
month. In addition, with the advance approval of the Company's Chief

                                        36
<PAGE>
                           SPSS INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Financial Officer, Nie Consulting shall be entitled to reimbursement for
reasonable out-of-pocket expenses incurred in performing the consulting
services. The Amended Consulting Agreement shall remain in effect from January
1, 2005 until either Nie Consulting or SPSS gives a written notice of
termination at least fifteen (15) days in advance of such termination.

     In addition, Dr. Nie is the Co-Chairman of the Board of Directors of
Knowledge Networks, Inc. and owns approximately 2.1% of the outstanding stock of
Knowledge Networks. Knowledge Networks utilizes SPSS products in the ordinary
course of its business. During fiscal year 2004, Knowledge Networks paid to SPSS
a total of $78 as consideration for licenses of certain SPSS products. SPSS
licensed these products to Knowledge Networks on terms equivalent to those
offered to other SPSS customers. No single transaction with Knowledge Networks
was deemed to be material. Dr. Nie did not receive and will not receive any
direct remuneration in connection with the Company's transactions with Knowledge
Networks.

     William Binch, a member of the Board of Directors of SPSS, is also a member
of the Board of Directors of Saama Technologies, Inc. The Company receives
various product technology and development services from Saama Technologies,
Inc. During 2003 and 2004, the Company paid $239 and $756 as consideration to
Saama Technologies, Inc. for these services. Mr. Binch did not receive and will
not receive any direct remuneration in connection with the Company's
transactions with Saama Technologies, Inc.

     As described in Note 7, SPSS purchased LexiQuest in January 2002. Dr. Nie
was the Chairman of the Board of Directors of LexiQuest and owned less than 1%
of LexiQuest common stock at the date of the acquisition.

     As described in Note 7, SPSS purchased netExs in June 2002. Jonathan
Otterstatter, the Executive Vice President and Chief Technology Officer of SPSS,
was a member of the Board of Managers of netExs. Mr. Otterstatter did not
receive and will not receive any remuneration in connection with the netExs
transaction.

(18) RESTRUCTURING

     During the quarter ended September 30, 2002, the Company implemented a
restructuring plan to reduce the Company's cost structure. The restructuring
resulted in the Company recording $3,700 consisting primarily of the layoff of
approximately 145 employees in the sales, marketing and administrative
functions, and approximately $600 of lease terminations and other costs incurred
in closing the Miami office. As of December 31, 2003 and 2004, none of the
restructuring charges remained in accrued liabilities.

(19) SALES, MARKETING AND SERVICES

     The Company makes payments to AOL for sample surveys and services pursuant
to agreement with AOL effective October 2001 and as amended October 2003 (See
Note 7). Included in "Sales, marketing and services" were payments to AOL for
survey and services of $9,500 in 2002, $7,847 in 2003 and $3,113 in 2004. The
decrease in 2004 from 2003 and 2002 reflected the terms of the amended agreement
with AOL effective October 2003. The terms of the amended agreement resulted in
the Company amortizing services expenses already paid to AOL as of the date of
the amendment as recoveries of expense over the remaining term of the agreement.
During 2004, these recoveries of expense aggregated to $1,125.

                                        37
<PAGE>
                           SPSS INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

(20) UNAUDITED QUARTERLY FINANCIAL INFORMATION

     The following selected quarterly data should be read in conjunction with
"Management's Discussion and Analysis of Financial Condition and Results of
Operations". This information has been derived from unaudited consolidated
financial statements of SPSS that, in our opinion, reflect all recurring
adjustments necessary to fairly present our financial information when read in
conjunction with our Consolidated Financial Statements and Notes. The results of
operations for any quarter are not necessarily indicative of the results to be
expected for any future period.

<Table>
<Caption>
                             MAR. 31,   JUNE 30,   SEPT. 30,   DEC. 31,   MAR. 31,   JUNE 30,   SEPT. 30,   DEC. 31,
                               2003       2003       2003        2003       2004       2004       2004        2004
                             --------   --------   ---------   --------   --------   --------   ---------   --------
                                                      (IN THOUSANDS, EXCEPT PER SHARE DATA)
<S>                          <C>        <C>        <C>         <C>        <C>        <C>        <C>         <C>
Net revenues:
  License Fees.............  $21,395    $21,110     $22,792    $26,176    $24,826    $20,952     $22,335    $27,706
  Maintenance..............   18,324     20,462      21,416     23,355     23,841     24,246      24,518     25,130
  Services.................    8,435      8,331       8,338      8,233      8,443      7,806       6,645      7,626
                             -------    -------     -------    -------    -------    -------     -------    -------
    Net revenues...........   48,154     49,903      52,546     57,764     57,110     53,004      53,498     60,462
Operating expenses:
  Cost of license and
    maintenance revenues...    3,006      3,081       3,179      5,093      3,936      3,240       3,523      3,943
  Cost of license and
    maintenance revenues --
    software write-offs....       --         --          --      1,961         --         --          --         --
  Sales, marketing and
    services...............   30,729     30,464      30,662     31,599     32,387     34,658      29,965     32,977
  Research and
    development............   10,927     10,999      10,537     11,704     11,987     11,690      11,477     12,611
  General and
    administrative.........    4,051      4,716       4,876      4,551      4,874      5,688       7,311      7,231
  Special general and
    administrative.........       --         --          --      6,104         --         --          --         --
                             -------    -------     -------    -------    -------    -------     -------    -------
    Operating expenses.....   48,713     49,260      49,254     61,012     53,184     55,276      52,276     56,762
Operating income (loss)....     (559)       643       3,292     (3,248)     3,926     (2,272)      1,222      3,700
Other income (expenses)....      367         35         865      9,066       (677)       760         (20)     1,417
                             -------    -------     -------    -------    -------    -------     -------    -------
Income (loss) before income
  taxes and minority
  interest.................     (192)       678       4,157      5,818      3,249     (1,512)      1,202      5,117
Income tax expense
  (benefit)................     (134)       165       1,465       (349)     1,145       (544)        369      1,543
                             -------    -------     -------    -------    -------    -------     -------    -------
Net income (loss)..........  $   (58)   $   513     $ 2,692    $ 6,167    $ 2,104    $  (968)    $   833    $ 3,574
                             =======    =======     =======    =======    =======    =======     =======    =======
Basic net income (loss) per
  share....................  $  0.00    $  0.03     $  0.16    $  0.35    $  0.12    $ (0.05)    $  0.05    $  0.20
                             =======    =======     =======    =======    =======    =======     =======    =======
Diluted net income (loss)
  per share................  $  0.00    $  0.03     $  0.15    $  0.34    $  0.11    $ (0.05)    $  0.05    $  0.20
                             =======    =======     =======    =======    =======    =======     =======    =======
Shares used in basic per
  Share....................   17,228     17,272      17,331     17,679     17,765     17,702      17,587     17,626
                             =======    =======     =======    =======    =======    =======     =======    =======
Shares used in diluted per
  Share....................   17,228     17,395      18,058     18,103     18,428     17,702      17,677     17,711
                             =======    =======     =======    =======    =======    =======     =======    =======
</Table>

                                        38
<PAGE>
                           SPSS INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

(21) RESTATEMENT OF CONSOLIDATED FINANCIAL STATEMENTS

     On March 15, 2004, SPSS announced that in connection with its October 2003
amended agreement with America Online, Inc. (AOL), the Company changed the
accounting for its original October 2001 transaction with AOL by expensing
substantially all AOL payments as incurred. As a result, the original
transaction would be accounted for on a basis consistent with the amended AOL
agreement and the Company would restate its financial results for fiscal years
2001, 2002 and the first three quarters of 2003.

     On March 30, 2004, SPSS announced that while completing the AOL restatement
it discovered errors in its deferred revenue accounts in the 2001 and 2002
fiscal years. The Company subsequently identified other errors in its deferred
revenue accounts in the fourth quarter of 2000 and the first three quarters of
2003. In addition, SPSS announced that it would record income tax expense
associated with deemed dividend income relating to certain cash transfers from
its international subsidiaries during the fourth quarter of 2002.

     SPSS went on to conduct additional examinations that resulted in various
adjustments between 1999 and 2003 including, among other items, adjustments to
the Company's income tax provisions and a change in the recognition of license
fee revenues from transactions completed by the Company's distribution partners
to account for its implied post contract support (PCS) obligations in such
transactions. All consolidated financial statements presented for 2002 and the
first three quarters of 2003 reflect the restated financials as described in the
2003 Form 10-K filed on July 29, 2004.

                                        39
<PAGE>

                                                                     SCHEDULE II

                                   SPSS INC.

                       VALUATION AND QUALIFYING ACCOUNTS
                  YEARS ENDED DECEMBER 31, 2002, 2003 AND 2004

<Table>
<Caption>
                                                                  ADDITIONS
                                                           -----------------------
                                              BALANCE AT   CHARGED TO                  RESULTING                  BALANCE AT
                                              BEGINNING    COSTS AND    CHARGED TO   FROM BUSINESS                  END OF
DESCRIPTION                                   OF PERIOD     EXPENSES     REVENUES    COMBINATIONS    DEDUCTIONS     PERIOD
-----------                                   ----------   ----------   ----------   -------------   ----------   ----------
<S>                                           <C>          <C>          <C>          <C>             <C>          <C>
2002
Allowance for doubtful accounts, product
  returns, and cancellations................    $4,050        $869        $5,674          $--          $5,464       $5,129
Inventory obsolescence reserve..............        35         120            --           --              91           64
2003
Allowance for doubtful accounts, product
  returns, and cancellations................    $5,129        $421        $1,824          $35          $3,774       $3,635
Inventory obsolescence reserve..............        64         680            --           --             532          212
2004
Allowance for doubtful accounts, product
  returns, and cancellations................    $3,635        $291        $1,061          $--          $2,522       $2,465
Inventory obsolescence reserve..............       212         299            --           --             200          311
</Table>

   See accompanying report of independent registered public accounting firm.
                                        40
<PAGE>

ITEM 9A.  CONTROLS AND PROCEDURES

     a. Disclosure Controls and Procedures.  SPSS maintains disclosure controls
and procedures that have been designed to ensure that information related to the
Company is recorded, processed, summarized and reported on a timely basis. SPSS
reviews these disclosure controls and procedures on a periodic basis. In
connection with this review, SPSS has established a compliance committee that is
responsible for accumulating potentially material information regarding its
activities and considering the materiality of this information. The compliance
committee (or a subcommittee thereof) is also responsible for making
recommendations regarding disclosure and communicating this information to the
Company's Chief Executive Officer and Chief Financial Officer to allow timely
decisions regarding required disclosure. The SPSS compliance committee is
comprised of the Company's senior legal official, principal accounting officer,
senior manager in charge of investor relations, principal risk management
officer, chief information officer and certain other members of the SPSS senior
management.

     The Company's Chief Executive Officer and Chief Financial Officer, with the
participation of the compliance committee, evaluated the effectiveness of the
design and operation of the Company's disclosure controls and procedures as of
the end of the period covered by this Annual Report, as required by Rule 13a-15
of the Securities Exchange Act of 1934. Based on this evaluation, our Chief
Executive Officer and Chief Financial Officer concluded that as of the end of
the period covered by this Annual Report, due to the material weaknesses in
internal control over financial reporting related to revenue and income taxes,
the Company's disclosure controls and procedures were not effective in ensuring
that the information required to be disclosed by the Company in the reports it
files or submits under the Securities Exchange Act of 1934 is recorded,
processed, summarized and reported within the time periods specified in the
rules and forms of the SEC.

     b. Internal Control Over Financial Reporting.  Management's Report on
Internal Control Over Financial Reporting and the Attestation Report of the
Registered Public Accounting Firm are included in Part II, Item 8 of this Annual
Report.

     c. Changes in Internal Control Over Financial Reporting.  There were no
changes in the Company's internal control over financial reporting that occurred
during the Company's last fiscal quarter of the period covered by this Annual
Report that have materially affected, or are reasonably likely to materially
affect, the Company's internal control over financial reporting, except as
described below.

     In response to material weaknesses identified in conjunction with the
assessment of the Company's internal control over financial reporting as of
December 31, 2004, management implemented additional controls to strengthen its
internal control over financial reporting with respect to revenue and income
taxes. However, in certain instances, the new controls were not in place for a
sufficient period of time in order to be considered to be operating effectively
in management's assessment process.

REVENUE

     During the third and fourth quarters of 2004, the Company began the process
of improving its internal controls over financial reporting. With regard to
deficiencies identified by management related to revenue, the Company took the
following actions:

     - Hired two professional accountants in September and October 2004 to
       assist with its monthly closing process, including additional review of
       significant contracts to ensure that all key aspects of revenue
       recognition are considered and that conclusions are fully and properly
       documented;

     - Reviewed key controls and initiated remediation and testing of certain
       control deficiencies; and

     - Implemented formalized procedures for testing key information technology
       application controls.

     During the second quarter of 2005, management will further update its
comprehensive revenue policies including distribution of these policies to key
personnel in the international subsidiaries. Also during 2005, the Company will
continue evaluating additional controls and procedures to further remediate this
material weakness, as necessary.

                                        41
<PAGE>

INCOME TAXES

     During the first quarter of 2005, the Company has hired an additional tax
professional with appropriate international tax expertise. Also during 2005, the
Company will continue evaluating additional controls and procedures to further
remediate this material weakness, as necessary. Such additional actions may
include enhanced procedures related to the review and validation of information
used to compute income taxes, global tax reporting structure and staffing
requirements.

     We believe these actions will strengthen our internal control over
financial reporting and address the material weaknesses related to revenue and
income taxes.

                                        42
<PAGE>

                                   SIGNATURES

     Pursuant to requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934 and Rule 12b-15 promulgated thereunder, the Registrant has duly
caused this Amendment No. 1 to Annual Report on Form 10-K to be signed on its
behalf by the undersigned, thereunto duly authorized as of April 22, 2005.

                                          SPSS INC.

                                          By:     /s/ Raymond H. Panza
                                            ------------------------------------
                                                      Raymond H. Panza
                                            Executive Vice President, Corporate
                                                 Operations, Chief Financial
                                                    Officer and Secretary

                                        43
<PAGE>

                                 EXHIBIT INDEX

<Table>
<Caption>
   EXHIBIT
    NUMBER                           DOCUMENT DESCRIPTION
   -------                           --------------------
<S>          <C> <C>
    23.1         Consent of KPMG LLP.
    31.1         Certification of the Chief Executive Officer and President
                 pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
    31.2         Certification of the Chief Financial Officer pursuant to
                 Section 302 of the Sarbanes-Oxley Act of 2002.
    32.1         Certification of Chief Executive Officer and President
                 pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to
                 Section 906 of the Sarbanes-Oxley Act of 2002.
    32.2         Certification of Chief Financial Officer pursuant to 18
                 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of
                 the Sarbanes-Oxley Act of 2002.
</Table>