##### Table of Contents



UNITED STATES
 SECURITIES AND EXCHANGE
    COMMISSION
 Washington, D.C.
    20549
    Form 10-K
  ANNUAL REPORT PURSUANT TO
    SECTION 13 OR 15(d)
 OF THE SECURITIES EXCHANGE ACT
    OF 1934
  For the
    fiscal year ended December 31, 2008
  Commission File Number:
    001-
    34103
    SPSS Inc.
 (Exact name of registrant as
    specified in its charter)
  Delaware

36-2815480(State or other jurisdiction
    of
    incorporation or organization)

(IRS Employer
    Identification No.)
   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:
  Title of Each Class

Name of Each Exchange on Which RegisteredCommon stock, par value $0.01 per share

The Nasdaq Stock Market
   Securities registered pursuant to Section 12(g) of the
    Act:
 None
  o þ
  o þ
  þ o
  Regulation S-K Form 10-K Form 10-K. o
  Rule 12b-2
  Large
    accelerated
    filer þ
    Accelerated
    filer o
    Non-accelerated
    filer o
    Smaller reporting
    company o   Rule 12b-2 o þ
      DOCUMENTS INCORPORATED BY REFERENCE
  Form 10-K




---



##### 



SPSS
    INC.
  TABLE OF
    CONTENTS
  
  PagePART IItem 1.

Business


2Item 1A.

Risk Factors


10Item 1B.

Unresolved Staff Comments


16Item 2.

Properties


16Item 3.

Legal Proceedings


16Item 4.

Submission of Matters to a Vote of Security
    Holders


17PART IIItem 5.

Market for Registrants Common Equity,
    Related Stockholder Matters and Issuer Purchases of Equity
    Securities


18Item 6.

Selected Financial Data


19Item 7.

Managements Discussion and Analysis of
    Financial Condition and Results of Operations


20Item 7A.

Quantitative and Qualitative Disclosures About
    Market Risk


36Item 8.

Financial Statements and Supplementary Data


37Item 9.

Changes in and Disagreements with Accountants on
    Accounting and Financial Disclosure


70Item 9A.

Controls and Procedures


70Item 9B.

Other Information


70PART IIIItem 10.

Directors, Executive Officers and Corporate
    Governance


71Item 11.

Executive Compensation


71Item 12.

Security Ownership of Certain Beneficial Owners
    and Management and Related Stockholder Matters


71Item 13.

Certain Relationships and Related Transactions,
    and Director Independence


73Item 14.

Principal Accountant Fees and Services


73PART IVItem 15.

Exhibits and Financial Statement Schedules


73EX-21.1EX-23.1EX-31.1EX-31.2EX-32.1EX-32.2   1




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##### Table of Contents



SPSS
    INC.
  FORM 10-K
    ANNUAL REPORT
    FOR THE FISCAL YEAR ENDED DECEMBER 31, 2008
 PART I  Forward-Looking
    Statements
  IN ADDITION TO HISTORICAL INFORMATION, THIS ANNUAL REPORT ON
    FORM 10-K
    CONTAINS FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF
    SECTION 27A OF THE SECURITIES ACT OF 1933 AND
    SECTION 21E OF THE SECURITIES EXCHANGE ACT OF 1934,
    INCLUDING, WITHOUT LIMITATION, STATEMENTS REGARDING THE
    COMPANYS EXPECTATIONS, BELIEFS, INTENTIONS OR FUTURE
    STRATEGIES THAT ARE SIGNIFIED BY THE WORDS EXPECTS,
    ANTICIPATES, INTENDS,
    BELIEVES, ESTIMATES OR SIMILAR LANGUAGE.
    ALL FORWARD-LOOKING STATEMENTS INCLUDED IN THIS DOCUMENT ARE
    BASED ON INFORMATION AVAILABLE TO THE COMPANY ON THE DATE
    HEREOF. THE COMPANY CAUTIONS INVESTORS THAT ITS BUSINESS AND
    FINANCIAL PERFORMANCE AND THE MATTERS DESCRIBED IN THESE
    FORWARD-LOOKING STATEMENTS ARE SUBJECT TO SUBSTANTIAL RISKS AND
    UNCERTAINTIES. BECAUSE OF THESE RISKS AND UNCERTAINTIES, SOME OF
    WHICH MAY NOT BE CURRENTLY ASCERTAINABLE AND MANY OF WHICH ARE
    BEYOND THE COMPANYS CONTROL, ACTUAL RESULTS COULD DIFFER
    MATERIALLY FROM THOSE EXPRESSED IN OR IMPLIED BY THE
    FORWARD-LOOKING STATEMENTS. THE POTENTIAL RISKS AND
    UNCERTAINTIES THAT COULD CAUSE RESULTS TO DIFFER MATERIALLY
    INCLUDE, BUT ARE NOT LIMITED TO: THE COMPANYS ABILITY TO
    PREDICT REVENUE, THE COMPANYS ABILITY TO RESPOND TO RAPID
    TECHNOLOGICAL CHANGES, A POTENTIAL LOSS OF RELATIONSHIPS WITH
    THIRD PARTIES FROM WHOM THE COMPANY LICENSES CERTAIN SOFTWARE,
    FLUCTUATIONS IN CURRENCY EXCHANGE RATES, THE IMPACT OF NEW
    ACCOUNTING PRONOUNCEMENTS, INCREASED COMPETITION AND RISKS
    ASSOCIATED WITH PRODUCT PERFORMANCE AND MARKET ACCEPTANCE OF NEW
    PRODUCTS. A DETAILED DISCUSSION OF THESE AND OTHER RISK FACTORS
    THAT AFFECT THE COMPANYS BUSINESS IS CONTAINED BELOW UNDER
    THE HEADING RISK FACTORS. THE COMPANY DOES NOT
    INTEND TO UPDATE THESE FORWARD-LOOKING STATEMENTS TO REFLECT
    ACTUAL FUTURE EVENTS.
  Item 1.
    Business         2




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##### Table of Contents



Form 10-K, Form 10-Q, Form 8-K
  The
    Companys Industry
        Predictive Analytic Products
  Statistical Products.
  Data Mining Products.
  Predictive Analytic Solutions.
 3




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##### Table of Contents



Strategy
    Markets
  Worldwide Business Intelligence Tools 2007 Vendor Shares,
    Worldwide Business Analytics Software
    2008-2012
    Forecast and 2007 Vendor Shares, Worldwide CRM Analytics
    Software Applications
    2008-2012
    Forecast and 2007 Vendor Shares.
  
    The global market for Advanced Analytics tools, an
    IDC sector that consolidates the former sectors of statistical
    software and data mining software. In 2007, this market was
    approximately $1.38 billion in size with SPSS holding
    approximately 15% of its market share. IDC estimates that this
    market will increase by approximately 10% per year and reach
    approximately $2.2 billion in size by 2012.
    The global market for analytical customer relationship
    management (CRM) applications. In 2007, this market was
    approximately $1.62 billion in size with SPSS holding
    approximately 2.2% of its market share. IDC estimates that this
    market will increase by approximately 12% per year and reach
    approximately $2.8 billion in size by 2012.    Offerings
    Predictive
    Analytic Products
      
    Comprehensive in function, spanning the entire process of data
    analysis;
    Modular, allowing customers to purchase only the functionality
    they need;
    Integrated, enabling the use of various parts of the SPSS
    technology in combination to tackle particularly complex
    problems; 4




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##### Table of Contents




    Tailored to desktop operating environments for greater
    ease-of-use, including browser-based environments for the
    delivery of results;
    Available on most popular computing platforms; and
    For some products, translated and localized for use in France,
    Germany, Italy, Poland, Japan, Taiwan, Korea, China and
    Spanish-speaking countries.  Statistics Family. SPSS SPSS SPSS Base
  Data Mining Family. Clementine
  Business Intelligence Family. ShowCase ShowCase
  Predictive
    Analytic Solutions
  Predictive Enterprise Services
  Dimensions Dimensions Dimensions
  Services
  on-site
    on-site e-mail
 5




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time-and-materials
  Sales
    Organization
          Marketing
    Organization
  e-mail,
      Research
    and Development
   6




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##### Table of Contents




    Extending the capabilities of its primary software products;
    Enhancing existing and developing new elements of the predictive
    analytic platform;
    Integrating and improving the interoperability of various SPSS
    products and technologies;
    Continuing to build reusable components for use in developing
    new analytical products;
    Establishing directions concerning future platforms and
    deployment, including J2EE and .NET, data visualization,
    in-database modeling and scoring, and the adoption of emergent
    standards; and
    Demonstrating industry leadership through active participation
    in standards organizations for predictive analytics, such as
    PMML and CRISP DM.      Competition
      Statistics Family Data Mining Family
   7




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##### Table of Contents



Intellectual
    Property
      
    SPSSis a registered trademark used in connection with
    virtually all of the technology, solutions, and products of the
    Company;
    Clementineis a registered trademark and is used in
    connection with the product line that SPSS acquired from
    Integral Solutions Limited;
    Dimensionsis an unregistered trademark used in
    connection with the Companys market research products on
    all platforms;
    Quantimeis an unregistered trademark used in connection
    with the Companys market research products on all
    platforms; and
    ShowCaseis an unregistered trademark used with products
    licensed by SPSS in its Business Intelligence family of products.  SPSS
     8




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Reliance
    on Third Parties
  Data
    Direct
    GlobalWare
    Solutions, Inc.
    Hyperion
    Solutions
    Employees
   9




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##### Table of Contents



Financial
    Information About the Companys Foreign and Domestic
    Operations and Export Sales
    Year Ended December 31,2006


2007


2008(In thousands)Sales to unaffiliated customers:United States

$
109,752


$
118,076


$
123,530Europe


111,537



129,410



131,277Pacific Rim


40,243



43,514



48,106Total

$
261,532


$
291,000


$
302,913Sales or transfers between geographic areas:United States

$
34,467


$
36,742


$
48,719Europe


(18,372
)


(19,109
)


(27,794
)Pacific Rim


(16,095
)


(17,633
)


(20,925
)Total

$



$



$
Operating income:United States

$
2,959


$
14,785


$
21,300Europe


22,625



28,051



20,270Pacific Rim


8,719



6,621



7,469Total

$
34,303


$
49,457


$
49,039Identifiable assets:United States

$
187,761


$
333,033


$
308,005Europe


90,890



133,031



139,909Pacific Rim


53,843



34,996



39,043Total

$
332,494


$
501,060


$
486,957     Item 1A.
    Risk
    Factors  Form 10-K,
 10




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##### Table of Contents



The
    Companys financial results and stock price may be
    adversely affected by quarterly fluctuations which are beyond
    its control.
    
    The influence of third party vendors and development delays on
    the number and timing of product updates and new product
    introductions;
    Delays in product development and introduction of new
    technologies;
    Purchasing schedules of its customers;
    Changes in foreign currency exchange rates;
    Changes in prescribed accounting rules and practices;
    The timing of product shipments as a result of the delivery
    schedules of fulfillment vendors and the timing of solution
    implementations;
    Changes in product mix and solutions revenues;
    Timing, cost and effects of acquisitions; and
    General economic conditions.      The
    anticipated benefits of the Companys acquisitions may not
    materialize, thereby exposing the Company to more expensive and
    less efficient operations.
    
    the need to implement or remediate controls, procedures and
    policies at companies that, prior to the acquisition, lacked
    these controls, procedures and policies;
    interruption of, or a distraction of managements attention
    from, the Companys business;
    challenges associated with integrating employees from the
    acquired company into the Companys organization; and
    the need to integrate each companys accounting, management
    information, human resource and other administrative systems to
    permit effective management.   11




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If SPSS
    does not respond adequately to rapid technological changes, its
    earnings may be adversely affected.
      Revenues
    from international operations represent a large percentage of
    the Companys net revenues. Certain risks associated with
    operating the Companys business outside of the United
    States may have a material adverse affect on its
    business.
    
    greater difficulties in accounts receivable collection;
    longer payment cycles;
    currency exchange rate fluctuations and restrictions on currency
    repatriation;
    political and economic instability;
    the burdens of complying with a wide variety of foreign laws and
    regulatory requirements; and
    potential negative consequences from changes in taxation
    policies.   12




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Significant
    movements in foreign currency exchange rates may adversely
    affect our business and financial results.
    The
    Companys stock price may experience volatility, thereby
    causing a potential loss of value to its investors.
    
    announcements of new products by SPSS or its competitors;
    quarterly variations in financial results;
    recommendations and reports of analysts;
    acquisitions; and
    other factors beyond the Companys control.  SPSS
    relies on third parties for certain software. The loss of these
    relationships could have a material adverse effect on the
    Companys products.
    The
    Companys continued use of the SPSS trademark may be
    prohibited or otherwise subjected to economically burdensome
    conditions.
     13




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SPSS
    relies on third parties for software distribution. The loss of
    these relationships could have a material adverse effect on the
    Companys operating results.
    Changes
    in public expenditures may adversely affect the Companys
    results of operations.
    SPSS may
    be unable to continue to compete with companies in its industry
    that have financial or other advantages. Failure to compete
    successfully could have a material adverse effect on the
    Companys business.
      SPSS
    depends on key executives. A loss of these executives and other
    personnel could negatively impact the Companys
    operations.
    SPSS may
    not receive the full benefits of its intellectual property
    protections.
   14




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The
    availability of competitive open source software to the
    predictive analytics market or the use of open source software
    in the Companys products may have a material adverse
    effect on the Companys business.
    Anti-takeover
    protections may make it difficult for a third party to acquire
    SPSS.
       15




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Item 1B.
    Unresolved
    Staff Comments    Item 2.
    Properties        Item 3.
    Legal
    Proceedings  Basu
    Litigation
  and/or
  Trademark
    Litigation
   16




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Item 4.
    Submission
    of Matters to a Vote of Security Holders   17




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##### Table of Contents



Part II  Item 5.
    Market
    for Registrants Common Equity, Related Stockholder Matters
    and Issuer Purchases of Equity Securities      Year end December 31,
    2007

High


LowFirst Quarter

$
37.28


$
29.07Second Quarter


44.98



35.85Third Quarter


47.87



34.51Fourth Quarter


44.98



33.30Year end December 31, 2008First Quarter


41.27



29.01Second Quarter


43.36



35.74Third Quarter


36.93



28.02Fourth Quarter


29.68



21.47       Performance
    Graph
    
  12/31/2003



12/31/2004



12/31/2005



12/31/2006



12/31/2007



12/31/2008SPSS (NASDAQ: SPSS)


$
100.00



$
87.47



$
172.99



$
168.18



$
200.84



$
150.78NASDAQ 100 Stock Index


$
100.00



$
109.48



$
110.83



$
118.38



$
140.48



$
81.57Goldman Sachs Software Index


$
100.00



$
113.56



$
108.13



$
119.86



$
139.10



$
85.76  18




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##### Table of Contents



Issuer
    Purchases of Equity Securities
    Item 6.
    Selected
    Financial Data  Form 10-K.
  Year Ended December 31,2004


2005


2006


2007


2008(In thousands, except per share data)Net revenues:License(1)

$
95,819


$
107,568


$
125,017


$
143,954


$
142,102Maintenance(2)


97,735



102,241



109,277



118,312



131,076Services(3)


30,520



26,254



27,238



28,734



29,735Net revenues


224,074



236,063



261,532



291,000



302,913Operating expenses:Cost of license and maintenance revenues


14,642



16,381



17,479



17,728



21,943Cost of license and maintenance revenues  asset
    write-offs(4)










1,283







1,807Sales, marketing and services


129,987



117,872



124,127



139,386



152,418Research and development


47,765



45,418



51,595



50,640



43,620General and administrative(5)


25,104



28,368



32,745



33,789



34,086Operating expenses


217,498



208,039



227,229



241,543



253,874Operating income


6,576



28,024



34,303



49,457



49,039Net interest and investment income (expense)


(282
)


161



3,139



7,964



4,726Gain on divestiture of Sigma-series product line(6)


82



1,000



1,000







Other income (expense)


1,680



(2,013
)


(3,981
)


(1,812
)


(186
)Income before income taxes


8,056



27,172



34,461



55,609



53,579Provision for income taxes


2,513



11,080



19,321



21,884



17,533Net income

$
5,543


$
16,092


$
15,140


$
33,725


$
36,046Basic net income per share

$
0.31


$
0.88


$
0.78


$
1.77


$
2.00Diluted net income per share

$
0.31


$
0.85


$
0.73


$
1.65


$
1.88Shares used in basic EPS calculation


17,671



18,228



19,451



19,106



18,029Shares used in diluted EPS calculation


17,884



18,880



20,645



20,440



19,196Balance Sheet Data:Working capital

$
13,846


$
37,415


$
92,099


$
236,289


$
241,043Total assets


235,325



271,897



332,494



501,060



486,957Current deferred revenue


62,148



63,980



73,483



83,862



83,638Long term obligations, less current portion


4,994



1,867



1,540



152,361



152,914Total stockholders equity


128,459



163,746



216,523



209,353



210,991     (1)
    
    License revenues include sales of the Companys tools,
    applications and components on a perpetual, annual or ASP
    (applications service provider) basis. 19




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(2)
    
    Maintenance revenues include recurring revenues recognized by
    the Company from renewals of maintenance agreements associated
    with perpetual licenses or renewals of annual licenses.(3)
    
    Services include revenues recognized from professional services
    engagements, training and other activities such as publication
    sales and providing respondents to online surveys.(4)
    
    See further discussion in Item 7, Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations.(5)
    
    Includes provision for doubtful accounts.(6)
    
    During 2003, the Company entered into an agreement to license
    the distribution of its Sigma-Series line of products and sell
    certain related assets. During 2004, SPSS recorded a favorable
    adjustment to reduce certain professional fee accruals
    associated with this transaction. During 2005, SPSS recorded
    additional gain related to receipt of final license payment of
    $1.0 million related to this transaction. This transaction
    was accounted for as a divestiture of a business. Systat made a
    final payment of $1.0 million to SPSS in 2006 to exercise
    its option to purchase the licensed property. See additional
    discussion in Note 7 of the Notes to Consolidated Financial
    Statements.  Item 7.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations  Overview
    and Background
      12-month
  References to Notes within this Item 7 refer
    to the Notes to Consolidated Financial Statements in
    Item 8, Financial Statements and Supplementary
    Data.
 20




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Results
    of Operations
  Comparison
    of the Years Ended December 31, 2006, 2007 and
    2008
  Net
    Revenue
    PeriodYear Ended December 31,

Amount Change

Percentage Change2006

2007

2008

06 vs 07

07 vs 08

06 vs 07

07 vs 08(In thousands)License

$
125,017


$
143,954


$
142,102


$
18,937


$
(1,852
)


15
%


(1
)%Maintenance


109,277



118,312



131,076



9,035



12,764



8
%


11
%Services


27,238



28,734



29,735



1,496



1,001



5
%


3
%Net Revenues

$
261,532


$
291,000


$
302,913


$
29,468


$
11,913



11
%


4
%Percent of Net RevenuesLicense


48
%


49
%


47
%Maintenance


42
%


41
%


43
%Services


10
%


10
%


10
%Net Revenues


100
%


100
%


100
%   License
    revenue
  PeriodYear Ended December 31,

Amount Change

Percentage Change2006

2007

2008

06 vs 07

07 vs 08

06 vs 07

07 vs 08(In thousands)United States

$
54,742


$
62,320


$
64,148


$
7,578


$
1,828



14
%


3
%Europe


45,043



55,004



48,987



9,961



(6,017
)


22
%


(11
)%Pacific Rim


25,232



26,630



28,967



1,398



2,337



6
%


9
%Net License Revenues

$
125,017


$
143,954


$
142,102


$
18,937


$
(1,852
)


15
%


(1
)%     
    lower sales volume of desktop statistical tools in Europe and
    the United States of $4.1 million and $2.5 million,
    respectively; and
    lower data mining product revenues of $3.6 million in all
    geographic regions    
    increased sales of market research products in the amount of
    $2.0 million in the United States;
    higher statistical tools revenues in the Pacific Rim of
    $1.8 million due to successful launch of the most recent
    product release during the third quarter of 2008; and
    changes in foreign currency exchange rates which increased
    license revenues by $4.8 million in 2008. 21




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Maintenance
    revenue
  PeriodYear Ended December 31,

Amount Change

Percentage Change2006

2007

2008

06 vs 07

07 vs 08

06 vs 07

07 vs 08(In thousands)United States

$
42,247


$
43,177


$
46,639


$
930


$
3,462



2
%


8
%Europe


55,267



61,847



68,539



6,580



6,692



12
%


11
%Pacific Rim


11,763



13,288



15,898



1,525



2,610



13
%


20
%Net Maintenance Revenues

$
109,277


$
118,312


$
131,076


$
9,035


$
12,764



8
%


11
%     
    higher renewal rates by the Companys customer base across
    all major geographic regions most notably in the desktop
    statistical tools and data mining product categories
    changes in foreign currency exchange rates which increased
    maintenance revenues by $2.5 million in 2008.    Service
    revenue
  PeriodYear Ended December 31,

Amount Change

Percentage Change2006

2007

2008

06 vs 07

07 vs 08

06 vs 07

07 vs 08(In thousands)United States

$
12,763


$
12,579


$
12,743


$
(184
)

$
164



(1
)%


1
%Europe


11,227



12,559



13,751



1,332



1,192



12
%


9
%Pacific Rim


3,248



3,596



3,241



348



(355
)


11
%


(10
)%Net Service Revenues

$
27,238


$
28,734


$
29,735


$
1,496


$
1,001



5
%


3
%      22




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##### Table of Contents



Total
    Revenue By Major Geographic Region
    PeriodYear Ended December 31,


Amount Change


Percentage Change2006


2007


2008


06 vs 07


07 vs 08


06 vs 07


07 vs 08(In thousands)United States

$
109,752


$
118,076


$
123,530


$
8,324


$
5,454



8%



5%United Kingdom


34,047



38,665



35,187



4,618



(3,478)



14%



(9)%The Netherlands


32,092



38,760



40,658



6,668



1,898



21%



5%Other


45,398



51,985



55,432



6,587



3,447



15%



7%Total Europe


111,537



129,410



131,277



17,873



1,867



16%



1%Japan


25,446



26,120



29,838



674



3,718



3%



14%Other


14,797



17,394



18,268



2,597



874



18%



5%Total Pacific Rim


40,243



43,514



48,106



3,271



4,592



8%



11%Total International


151,780



172,924



179,383



21,144



6,459



14%



4%Net Revenue

$
261,532


$
291,000


$
302,913


$
29,468


$
11,913



11%



4%Percent of Net RevenuesUnited States


42%



41%



41%International


58%



59%



59%Net Revenue


100%



100%



100%     2007
    Compared with 2008
   23




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##### Table of Contents



Year EndedDecember 31,Country (Currency)

2008(In thousands)Netherlands (Euro)

$
2,870Other Euro-denominated countries


3,184United Kingdom (Pound)


(2,849
)Japan (Yen)


3,630Other currencies


983Total

$
7,818   2006
    Compared with 2007
    Year EndedDecember 31,Country (Currency)

2007(In thousands)Netherlands (Euro)

$
2,933Other Euro-denominated countries


3,387United Kingdom (Pound)


2,929Japan (Yen)


(320
)Other currencies


2,100Total

$
11,029   Cost
    of License and Maintenance Revenues
  PeriodYear Ended December 31,


Amount Change


Percentage Change2006


2007


2008


06 vs 07


07 vs 08


06 vs 07


07 vs 08(In thousands)Cost of License and Maintenance Revenues

$
17,479


$
17,728


$
21,943


$
249


$
4,215



1%



24%Percent of Total Revenues


7%



6%



7%      24




---



##### Table of Contents



Cost
    of License and Maintenance Revenues  Asset
    Write-offs
  PeriodYear Ended December 31,


Amount Change


Percentage Change2006


2007


2008


06 vs 07


07 vs 08


06 vs 07


07 vs 08(In thousands)Cost of License and Maintenance Revenues-Asset Write-offs

$
1,283


$



$
1,807


$
(1,283
)

$
1,807



NM



NMPercent of Total Revenues



%



%


1
%       Sales,
    Marketing and Services
  PeriodYear Ended December 31,


Amount Change


Percentage Change2006


2007


2008


06 vs 07


07 vs 08


06 vs 07


07 vs 08(In thousands)Sales, Marketing and Services

$
124,127


$
139,386


$
152,418


$
15,259


$
13,032



12%



9%Percent of Total Revenues


47
%


48
%


50
%       Research
    and Development
  PeriodYear Ended December 31,


Amount Change


Percentage Change2006


2007


2008


06 vs 07


07 vs 08


06 vs 07


07 vs 08(In thousands)Research and Development

$
51,595


$
50,640


$
43,620


$
(955
)

$
(7,020
)


(2)%



(14)%Percent of Total Revenues


20
%


17
%


14
%      25




---



##### Table of Contents



General
    and Administrative
  PeriodYear Ended December 31,


Amount Change


Percentage Change2006


2007


2008


06 vs 07


07 vs 08


06 vs 07


07 vs 08(In thousands)General and Administrative

$
32,745


$
33,789


$
34,086


$
1,044


$
297



3%



1%Percent of Total Revenues


13
%


12
%


11
%       Operating
    Income
  PeriodYear Ended December 31,


Amount Change


Percentage Change2006


2007


2008


06 vs 07


07 vs 08


06 vs 07


07 vs 08(In thousands)Operating Income

$
34,303


$
49,457


$
49,039


$
15,154


$
(418
)


44%



(1)%Percent of Total Revenues


13
%


17
%


16
%     Net
    Interest and Investment Income
  PeriodYear Ended December 31,


Amount Change


Percentage Change2006


2007


2008


06 vs 07


07 vs 08


06 vs 07


07 vs 08(In thousands)Net Interest and Investment Income

$
3,139


$
7,964


$
4,726


$
4,825


$
(3,238
)


154%



(41)%Percent of Total Revenues


1
%


3
%


2
%       Gain
    on Divestiture of Sigma-Series Product Line
  PeriodYear Ended December 31,


Amount Change


Percentage Change2006


2007


2008


06 vs 07


07 vs 08


06 vs 07


07 vs 08(In thousands)Gain on Divestiture of Sigma-series Product Line

$
1,000


$



$



$
(1,000
)

$




NM



NMPercent of Total Revenues



%



%



%  26




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##### Table of Contents



Other
    Expense
  PeriodYear Ended December 31,


Amount Change


Percentage Change2006


2007


2008


06 vs 07


07 vs 08


06 vs 07


07 vs 08(In thousands)Other Expense

$
(3,981
)

$
(1,812
)

$
(186
)

$
2,169


$
1,626



(54)%



(90)%Percent of Total Revenues


(2
)%


(1
)%



%       Provision
    for Income Taxes
  PeriodYear Ended December 31,


Amount Change


Percentage Change2006


2007


2008


06 vs 07


07 vs 08


06 vs 07


07 vs 08(In thousands)Provision for Income Taxes

$
19,321


$
21,884


$
17,533


$
2,563


$
(4,351
)


13%



(20)%Percent of Pre-Tax Income


56
%


39
%


33
%         Liquidity
    and Capital Resources
    Operating
    Cash Flows:
  
    Cash derived from operating activities was $64.7 million.
    This cash resulted primarily from net income and receivable
    collections.
    Accounts receivable increased operating cash flow by
    $12.3 million due to improved collections. Average days
    sales outstanding were 54 days at December 31, 2008,
    compared to 65 days at December 31, 2007. 27




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##### Table of Contents




    Accrued expenses, including the timing of purchases of common
    stock, decreased operating cash flow by $10.7 million.
    Timing of accounts payable disbursements decreased operating
    cash flow by $1.5 million.
    Changes in deferred taxes and income taxes used
    $3.7 million.
    Increases in deferred revenue contributed $5.0 million to
    cash from operating activities.  Investing
    Activities:
  
    Capital expenditures were $5.7 million in 2008.
    Capitalized software costs were $16.4 million in 2008.
    Purchase of business and intangible assets were
    $1.2 million in 2008.  Financing
    Activities:
  
    Purchases of outstanding common stock used $27.9 million of
    cash.
    Cash proceeds of $6.6 million were generated from the
    exercise of stock options.
    Tax benefits recognized from stock option exercises were
    $0.6 million.         28




---



##### Table of Contents




    the Company is required to have consolidated EBITDA of at least
    $40,000,000 for each period of four consecutive fiscal
    quarters; and
    the Company is required to maintain a ratio of (a)
    (x) consolidated total debt less (y) cash and cash
    equivalents to (b) consolidated EBITDA of not greater than
    2.50 to 1, with compliance with such covenant to be tested on
    the last day of each fiscal quarter.           29




---



##### Table of Contents



Summary
    Disclosures about Contractual Obligations and Commercial
    Commitments
    Payment due by PeriodLess than








More thanTotal


1 Year


1-3 Years


3-5 Years


5 YearsLong-term debt(1)

$
150,000


$



$



$
150,000


$
Capital lease obligations


















Operating lease obligations(2)


38,833



12,053



18,411



7,013



1,356Purchase obligations and other commitments


















Other long-term liabilities(3)


5,106







5,106







Total

$
193,939


$
12,053


$
23,517


$
157,013


$
1,356     (1)
    
    See Note 10 for a description of the Companys
    long-term debt.(2)
    
    See Note 8 for a description of the Companys
    operating lease obligations.(3)
    
    As discussed in Note 12, effective January 1, 2007,
    the Company adopted the provisions of FASB interpretation
    No. 48, Accounting for Uncertainty in Income Taxes-
    an interpretation of FASB Statement No. 109. The
    Company has a liability for uncertain tax positions of
    $5.1 million at December 31, 2008. See additional
    discussion in Note 12.  International
    Operations
    non-U.S. income,
  Critical
    Accounting Policies and Estimates
   30




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##### Table of Contents



Revenue
    Recognition
      
    Product licenses.  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;
    Postcontract customer support (PCS or
    maintenance) agreements which consist primarily of
    fees for providing
    when-and-if-available
    unspecified software upgrades and technical support over a
    specified term;
    Fixed-price service-related arrangements which are primarily
    comprised of consulting, implementation services and training;
    Various combinations of the above elements.
    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 is 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 is deferred and recognized ratably over the life of the
    support contract when the stated renewal is substantive.
    When SPSS provides direct maintenance and support to the
    end-user, SPSS defers 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 is deferred and recognized ratably over the
    life of the contract.
    Where no maintenance or support of any kind are required by the
    contract, no revenue is 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 SFAS No. 48, Revenue
    Recognition When Right of Return Exists,and establishes a
    reserve for the estimated amount of the returns. 31




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##### Table of Contents



Multiple
    Element Arrangements
    The
    Fee is Fixed or Determinable
    Collection
    is Probable
  case-by-case
  Product
    Returns
    Delivery
    of Software Products
    97-2 (SOP 97-2), Software Revenue Recognition
  SOP 97-2 Revenue
    Recognition.
  Capitalization
    of Certain Software Development Costs
  Accounting for the Costs of Computer Software to Be Sold,
    Leased, or Otherwise Marketed.
 32




---



##### Table of Contents



SOP 98-1, Accounting for the Costs of Computer Software Developed or
    Obtained for Internal Use. SOP 98-1
  Accounts
    Receivable
    Impairment
    of Long-Lived Assets
      Income
    Taxes
   33




---



##### Table of Contents



Share-Based
    Compensation
    Off-Balance
    Sheet Arrangements
    Recent
    Accounting Pronouncements
  FAS No. 157-1 No. 157-2 SFAS No. 157-1 FSP 157-2 FSP 157-3, FAS 157-3
   34




---



##### Table of Contents



No. FAS 142-3, Determination of the Useful Life of Intangible Assets No. FAS 142-3). No. FAS 142-3 Goodwill and Other
    Intangible Assets, No. FAS 142-3 No. FAS 142-3 No. FAS 142-3
    14-1 14-1), 14-1 14-1 14-1
 35




---



##### Table of Contents



Item 7A.
    Quantitative
    and Qualitative Disclosures About Market Risk         36




---



##### 



Item 8.
    Financial
    Statements and Supplementary Data  SPSS INC.
    AND SUBSIDIARIES
  INDEX
   
 PageReport of Independent Registered Public
    Accounting Firm


38Managements Report on Internal Control Over
    Financial Reporting


39Consolidated Balance Sheets as of
    December 31, 2007 and 2008


40Consolidated Statements of Income for the years
    ended December 31, 2006, 2007 and 2008


41Consolidated Statements of Comprehensive Income
    for the years ended December 31, 2006, 2007 and 2008


42Consolidated Statements of Stockholders
    Equity for the years ended December 31, 2006, 2007 and
    2008


43Consolidated Statements of Cash Flows for the
    years ended December 31, 2006, 2007 and 2008


44Notes to Consolidated Financial Statements


45Consolidated Financial Statement Schedule:Schedule II Valuation and Qualifying
    Accounts


69       37




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM     Internal Control  Integrated Framework
          Internal Control  Integrated Framework
  
    38




---



##### Table of Contents



MANAGEMENTS
    REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING  Rule 13a-15(f) Internal Control  Integrated Framework.
      Internal
    Control  Integrated Framework Form 10-K, Form 10-K.
  By:
    /s/  Jack
    Noonan      By:
    /s/  Raymond
    H. Panza     39




---



##### Table of Contents



SPSS INC.
    AND SUBSIDIARIES



CONSOLIDATED
    BALANCE SHEETS

(In
    thousands, except share data)  December 31,


December 31,2007


2008ASSETSCURRENT ASSETS:Cash and cash equivalents

$
306,930


$
305,917Accounts receivable, net of allowances of $1,211 in 2007 and
    $935 in 2008


56,580



43,172Inventories, net


698



433Deferred income taxes


3,964



4,142Prepaid income taxes


3,301



5,738Other current assets


4,162



4,693Total current assets


375,635



364,095Property, equipment and leasehold improvements, net


16,429



14,323Capitalized software development costs, net


34,140



37,470Goodwill


42,093



41,845Intangibles, net


3,273



2,091Noncurrent deferred income taxes, net


22,731



20,728Other noncurrent assets


6,759



6,405Total assets

$
501,060


$
486,957LIABILITIES AND STOCKHOLDERS EQUITYCURRENT LIABILITIES:Accounts payable

$
7,759


$
6,391Income taxes and value added taxes payable


14,737



10,877Deferred revenues


83,862



83,638Other accrued liabilities


32,988



22,146Total current liabilities


139,346



123,052Long-term debt


150,000



150,000Noncurrent deferred income taxes


784



977Other noncurrent liabilities


1,577



1,937STOCKHOLDERS EQUITY:Common Stock, $0.01 par value; 50,000,000 shares
    authorized; 18,905,933 and 18,172,910 shares issued in 2007
    and 2008, respectively


189



182Additional paid-in capital


175,267



147,079Accumulated other comprehensive income (loss)


2,696



(16,197
)Retained earnings


43,881



79,927Treasury stock; 353,100 shares in 2007, at cost


(12,680
)


Total stockholders equity


209,353



210,991Total liabilities and stockholders equity

$
501,060


$
486,957    40




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##### Table of Contents



SPSS INC.
    AND SUBSIDIARIES



CONSOLIDATED
    STATEMENTS OF INCOME

(In
    thousands, except per share data)  Year Ended December 31,2006


2007


2008Net revenues:License

$
125,017


$
143,954


$
142,102Maintenance


109,277



118,312



131,076Services


27,238



28,734



29,735Net revenues


261,532



291,000



302,913Operating expenses:Cost of license and maintenance revenues


17,479



17,728



21,943Cost of license and maintenance revenues  asset
    write-offs


1,283







1,807Sales, marketing and services


124,127



139,386



152,418Research and development


51,595



50,640



43,620General and administrative


32,745



33,789



34,086Operating expenses


227,229



241,543



253,874Operating income


34,303



49,457



49,039Other income (expense):Net interest and investment income


3,139



7,964



4,726Gain on divestiture of Sigma-series product line


1,000







Other


(3,981
)


(1,812
)


(186
)Other income


158



6,152



4,540Income before income taxes


34,461



55,609



53,579Income tax expense


19,321



21,884



17,533Net income

$
15,140


$
33,725


$
36,046Basic net income per share

$
0.78


$
1.77


$
2.00Diluted net income per share

$
0.73


$
1.65


$
1.88Shares used in computing basic net income per share


19,451



19,106



18,029Shares used in computing diluted net income per share


20,645



20,440



19,196    41




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##### Table of Contents



SPSS INC.
    AND SUBSIDIARIES



CONSOLIDATED
    STATEMENTS OF COMPREHENSIVE INCOME

(In
    thousands)  Year Ended December 31,2006


2007


2008Net income

$
15,140


$
33,725


$
36,046Other comprehensive income (loss):Foreign currency translation adjustment


8,085



4,031



(18,893
)Comprehensive income

$
23,225


$
37,756


$
17,153    42




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##### Table of Contents



SPSS INC.
    AND SUBSIDIARIES



CONSOLIDATED
    STATEMENTS OF STOCKHOLDERS EQUITY

(In
    thousands, except share data)  Year Ended December 31,2006


2007


2008Common stock, $.01 par value:Balance at beginning of period

$
187


$
198


$
189Sale of 42,177, 39,931 and 45,599 shares of common stock to
    the Employee Stock Purchase Plans in 2006, 2007 and 2008,
    respectively










Retirement of 1,772,400 and 1,206,900 shares of treasury
    stock in 2007 and 2008, respectively






(18
)


(12
)Exercise of stock options and issuance of restricted share units


11



9



5Balance at end of period


198



189



182Additional paid-in capital:Balance at beginning of period


177,440



205,912



175,267Reclassification of deferred compensation upon adoption of
    SFAS No. 123(R)


(1,069
)






Retirement of 1,772,400 and 1,206,900 shares of treasury
    stock in 2007 and 2008, respectively






(59,121
)


(40,538
)Sale of 42,177, 39,931 and 45,599 shares of common stock to
    the Employee Stock Purchase Plans in 2006, 2007 and 2008,
    respectively


1,047



1,216



1,623Exercise of 980,936, 804,703 and 254,051 stock options in 2006,
    2007 and 2008, respectively


18,826



15,473



5,003Amortization of stock option compensation


3,105



2,512



1,476Grant of restricted and deferred share units


3,129



3,873



3,686Income tax benefit related to stock options


3,434



5,402



562Balance at end of period


205,912



175,267



147,079Deferred compensation:Balance at beginning of period


(1,069
)






Reclassification of deferred compensation upon adoption of
    SFAS No. 123(R)


1,069







Balance at end of period










Accumulated other comprehensive (loss) gain:Balance at beginning of period


(9,420
)


(1,335
)


2,696Foreign currency translation adjustment


8,085



4,031



(18,893
)Balance at end of period


(1,335
)


2,696



(16,197
)Retained earnings (Accumulated deficit):Balance at beginning of period


(3,392
)


11,748



43,881Implementation of FIN 48






(1,592
)


Net income


15,140



33,725



36,046Balance at end of period


11,748



43,881



79,927Treasury stock:Balance at beginning of period










(12,680
)Purchase of 2,125,500 and 853,800 shares of treasury stock
    in 2007 and 2008, respectively






(71,819
)


(27,870
)Retirement of 1,772,400 and 1,206,900 shares of treasury
    stock in 2007 and 2008, respectively






59,139



40,550Balance at end of period






(12,680
)


Total stockholders equity

$
216,523


$
209,353


$
210,991    43




---



##### Table of Contents



SPSS INC.
    AND SUBSIDIARIES



CONSOLIDATED
    STATEMENTS OF CASH FLOWS

(In
    thousands)  Year Ended December 31,2006


2007


2008Cash flows from operating activities:Net income

$
15,140


$
33,725


$
36,046Adjustments to reconcile net income to net cash provided by
    operating activities:Depreciation and amortization


16,536



18,220



20,555Deferred income taxes


9,844



10,627



2,580Excess tax benefit from share-based compensation


(3,434
)


(5,402
)


(562
)Amortization of share-based compensation


6,704



7,772



8,141Asset impairment and cost management charges


1,283



2,310



1,807Gain on sale of product line


(1,000
)






Changes in assets and liabilities, net of effects of
    acquisitions:Accounts receivable


(8,872
)


(97
)


12,322Inventories


136



60



261Prepaid and other assets


676



623



(709
)Accounts payable


(3,382
)


1,079



(1,455
)Accrued expenses


2,403



7,385



(10,722
)Income taxes


2,755



3,772



(5,703
)Deferred revenue


5,898



6,964



5,031Other, net


3,523



(2,148
)


(2,942
)Net cash provided by operating activities


48,210



84,890



64,650Cash flows from investing activities:Capital expenditures


(4,287
)


(5,698
)


(5,662
)Capitalized software development costs


(12,761
)


(13,232
)


(16,377
)Purchase of business and intangibles










(1,245
)Proceeds from the divestiture of Sigma-series product line


1,000







Net cash used in investing activities


(16,048
)


(18,930
)


(23,284
)Cash flows from financing activities:Purchase of common stock






(71,819
)


(27,870
)Proceeds from stock option exercises and employee stock purchase
    plan


19,884



16,698



6,631Tax benefit from stock option exercises


3,434



5,402



562Proceeds from issuance of long-term debt






150,000



Debt issuance costs






(4,281
)


Net repayments under line-of-credit agreements


(3,372
)






Net cash provided by (used in) financing activities


19,946



96,000



(20,677
)Effect of exchange rates on cash


3,687



4,767



(21,702
)Net change in cash and cash equivalents


55,795



166,727



(1,013
)Cash and cash equivalents at beginning of period


84,408



140,203



306,930Cash and cash equivalents at end of period

$
140,203


$
306,930


$
305,917Supplemental disclosures of cash flow information:Interest paid

$
105


$
1,913


$
3,783Income taxes paid


7,899



8,185



19,615Cash received from income tax refunds


1,889



2,089



1,186Purchases of common stock in accrued expenses






7,380



    44




---



##### Table of Contents



SPSS INC.
    AND SUBSIDIARIES
 NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS  (1)
    Summary
    of Significant Accounting Policies  Business
        
    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
      Use of
    Estimates
    Revenue
    Recognition
  97-2,
     45




---



##### Table of Contents



when-and-if-available
    
    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 is deferred and recognized ratably over the life of the
    support contract when the stated renewal is substantive.
    When SPSS provides direct maintenance and support to the
    end-user, SPSS defers 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 is deferred and recognized ratably over the
    life of the contract.
    Where no maintenance or support of any kind are required by the
    contract, no revenue is 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.  SOP 81-1,
 46




---



##### Table of Contents



No. 99-19, Reporting Revenue Gross as a Principal Versus Net as an
    Agent
  SOP 98-9, SOP 97-2
  (1)
    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. Annual licenses with maintenance
    renewable annually are recognized ratably over the term of the
    maintenance. Vendor-specific objective evidence of fair value of
    maintenance for perpetual licenses with annual maintenance is
    based on the price the customer is required to pay for
    maintenance when sold separately. In certain countries where
    SPSS operates, vendor-specific objective evidence of fair value
    of maintenance for perpetual licenses with annual maintenance is
    based on a stated renewal rate for maintenance. For these types
    of arrangements, where there are stated renewal rates and they
    are substantive, VSOE exists. If VSOE does not exist, the entire
    fee is deferred and recognized ratably over the term of the
    arrangement as license revenue.  60-day 12-month
  12-month
  (2)
    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.(3)
    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, 47




---



##### Table of Contents



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).      Advertising
    Cost
    Earnings
    per Share
    2006


2007


2008Basic weighted average common shares outstanding


19,451



19,106



18,029Dilutive effect of stock options


1,194



1,334



1,167Diluted weighted average common shares outstanding


20,645



20,440



19,196Anti-dilutive shares not included in diluted EPS


24



2



101   Depreciation
    and Amortization
    Furniture, fixtures, and office equipment

5-8 yearsComputer equipment and software

3-7 yearsLeasehold improvements

3-15 years or lease term if shorter    48




---



##### Table of Contents



Software
    Development Costs
    98-1, SOP 98-1
  Equity
    Incentive Plans
    Cash
    and Cash Equivalents
    Accounts
    Receivable
    Inventories
  first-in,
  Property,
    Equipment and Leasehold Improvements
   49




---



##### Table of Contents



Goodwill
    and Other Intangible Assets
    Long-Lived
    Assets
    Reclassifications
    Income
    Taxes
    Financial
    Instruments and Hedging Activities
     50




---



##### Table of Contents



Debt
    Expense
    Recent
    Accounting Pronouncements
  FAS No. 157-1 No. 157-2 SFAS No. 157-1 FSP 157-2 FSP 157-3, FAS 157-3
      No. FAS 142-3, Determination of the Useful Life of Intangible Assets No. FAS 142-3). No. FAS 142-3 Goodwill and Other
    Intangible Assets, No. FAS 142-3
 51




---



##### Table of Contents



No. FAS 142-3 No. FAS 142-3
    14-1 14-1), 14-1 14-1 14-1
  (2)
    Domestic
    and Foreign Operations    December 31,2006


2007


2008Working capital

$
54,315


$
65,029


$
80,873Excess of noncurrent assets over noncurrent liabilities

$
22,796


$
23,830


$
24,371Net revenues

$
151,780


$
172,923


$
179,383Net income

$
14,375


$
24,038


$
21,549     Year Ended December 31,2006


2007


2008United States

$
109,752


$
118,076


$
123,530United Kingdom


34,047



38,665



35,187The Netherlands


32,092



38,760



40,658Other


45,398



51,985



55,432Total Europe


111,537



129,410



131,277Japan


25,446



26,120



29,838Other


14,797



17,394



18,268Total Pacific Rim


40,243



43,514



48,106Total International


151,780



172,924



179,383Total

$
261,532


$
291,000


$
302,913  52




---



##### Table of Contents



December 31,2007


2008United States

$
81,764


$
81,724United Kingdom


5,976



4,613The Netherlands


7,995



7,299Other


2,972



3,609Total Europe


16,943



15,521Japan


2,455



2,952Other


1,532



1,937Total Pacific Rim


3,987



4,889Total International


20,930



20,410Total

$
102,694


$
102,134   (3)
    Property,
    Equipment and Leasehold Improvements    December 31,2007


2008Property, equipment and leasehold improvements, at cost:Furniture, fixtures, and office equipment

$
16,168


$
8,426Computer equipment and software


74,798



75,286Leasehold improvements


17,334



15,260Balance, cost  end of year


108,300



98,972Accumulated depreciation and amortization


(91,871
)


(84,649
)Balance, net  end of year

$
16,429


$
14,323     December 31,2007


2008Balance, net  beginning of year

$
17,708


$
16,429Additions


5,698



5,662Asset write-offs


(656
)


Depreciation expense


(6,491
)


(7,040
)Foreign currency translation and other


170



(728
)Balance, net  end of year

$
16,429


$
14,323     2006


2007


2008Depreciation

$
5,296


$
5,459


$
6,008Internal-use computer software amortization


1,022



1,032



1,032Internal-use computer software capitalization


95







    53




---



##### Table of Contents



(4)
    Software
    Development Costs and Purchased Software    December 31,2007


2008Product translations

$
12,573


$
14,689Acquired software technology


17,095



21,804Capitalized software development costs


43,845



44,617Balance, cost  end of year


73,513



81,110Accumulated amortization


(39,373
)


(43,640
)Balance, net  end of year

$
34,140


$
37,470     December 31,2007


2008Balance, net  beginning of year

$
31,583


$
34,140Additions


13,232



16,377Amortization expense charged to cost of license and maintenance
    revenues


(10,705
)


(12,202
)Foreign currency translation


30



(845
)Balance, net  end of year

$
34,140


$
37,470        54




---



##### Table of Contents



For the year ended December 31, 2009

$
1,829For the year ended December 31, 2010


1,513For the year ended December 31, 2011


1,390For the year ended December 31, 2012


994For the year ended December 31, 2013


165   (5)
    Goodwill
    and Intangible Assets    December 31,2007


2008Gross





GrossCarrying


Accumulated


Carrying


AccumulatedAmount


Amortization


Amount


AmortizationAmortizable intangible assets:Other intangible assets  Customer relationships

$
2,411


$
(1,005
)

$
3,481


$
(1,410
)Other intangible assets  Trademarks


400



(360
)


400



(400
)Unamortizable intangible assets:Other intangible assets


1,827







20Goodwill


42,093







41,845Aggregate amortization expense:2008










445Estimated amortization expense:2009










2702010










2702011










702012










702013










70       December 31, 2007Goodwill


IntangiblesBalance at beginning of year

$
41,923


$
3,470Amortization expense






(344
)Foreign currency translation and other


170



147Balance at end of year

$
42,093


$
3,273   55




---



##### Table of Contents



December 31, 2008Goodwill


IntangiblesBalance at beginning of year

$
42,093


$
3,273Amortization expense






(445
)Write-off of intangible asset






(1,807
)Acquired intangibles






1,245Foreign currency translation and other


(248
)


(175
)Balance at end of year

$
41,845


$
2,091   (6)
    Intangible
    Assets    December 31,2007


2008


Useful LivesTrademarks

$
400


$
400



10 yearsCustomer relationships


2,411



3,481



7-10 years2,811



3,881Accumulated amortization


(1,365
)


(1,810
)1,446



2,071Unamortizable trademarks


1,827



20



IndefiniteTotal intangible assets, net

$
3,273


$
2,091     (7)
    Acquisitions
    and Divestitures  Systat
    Software, Inc.
     56




---



##### Table of Contents



Datab
    GmbH
    (8)
    Commitments
    and Contingencies  Operating
    Leases
      Year Ending December 31,

Amount2009

$
12,0532010


9,8992011


8,5122012


5,1522013


1,861Thereafter


1,356Total operating lease obligation

$
38,833     Hyperion
    Solutions
    GlobalWare
    Solutions, Inc.
   57




---



##### Table of Contents



Litigation
  Basu Litigation
  and/or
  Trademark Litigation
         58




---



##### Table of Contents



(9)
    Other
    Accrued Liabilities    2007


2008Payroll

$
10,601


$
8,789Rent


3,110



2,527Customer advances


3,432



2,101Royalties


1,375



1,432Purchase of common stock


7,380



Other accrued expenses


7,090



7,297Total other accrued liabilities

$
32,988


$
22,146   (10)
    Financing
    Arrangements and Hedging Activities               59




---



##### Table of Contents



(11)
    Other
    Income    Year Ended December 31,2006


2007


2008Interest and investment income

$
3,359


$
11,557


$
9,621Interest expense


(220
)


(3,593
)


(4,895
)Net interest and investment income


3,139



7,964



4,726Gain on divestiture of Sigma-series product line


1,000







Exchange loss on foreign currency transactions


(3,981
)


(1,812
)


(186
)Other, net


(2,981
)


(1,812
)


(186
)Total other income

$
158


$
6,152


$
4,540    60




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##### Table of Contents



(12)
    Income
    Taxes    Year Ended December 31,2006


2007


2008Domestic

$
13,545


$
21,883


$
24,508Foreign


20,916



33,726



29,071Pretax income

$
34,461


$
55,609


$
53,579     Current


Deferred


TotalYear ended December 31, 2006U.S. Federal

$
2,753


$
10,128


$
12,881State


451



(552
)


(101
)Foreign


7,530



(989
)


6,541Income tax expense (benefit)

$
10,734


$
8,587


$
19,321Year ended December 31, 2007U.S. Federal

$
6,572


$
4,538


$
11,110State


790



299



1,086Foreign


8,886



802



9,688Income tax expense

$
16,248


$
5,639


$
21,884Year ended December 31, 2008U.S. Federal

$
5,565


$
3,643


$
9,208State


589



214



803Foreign


9,184



(1,662
)


7,522Income tax expense

$
15,338


$
2,195


$
17,533     Year Ended December 31,2006


2007


2008Statutory Federal income tax rate


35
%


35
%


35
%Income taxes using the Federal statutory rate

$
12,061


$
19,463


$
18,753State income taxes, net of Federal tax benefit


295



602



301Foreign taxes at net rates different from U.S. Federal rates


(591
)


(1,690
)


(2,184
)Deemed income from foreign operations


2,178



4,348



5,689Dividends from foreign affiliates


2,987



4,472



Foreign tax credit


1,281



(8,767
)


(5,825
)Research and development credit


(400
)


(1,384
)


(579
)Nondeductible costs including meals and entertainment, Sec 162(m)


226



609



931Domestic manufacturing deduction


(263
)






(245
)Change in valuation allowance


1,966



2,594



335Other, net


(419
)


1,637



357Income tax expense

$
19,321


$
21,884


$
17,533  61




---



##### Table of Contents



2007


2008Deferred revenues

$
14,777


$
15,838Foreign tax credit carryforwards


15,474



4,605Research and experimentation credit carryforwards


3,787



2,572AMT credits


136



142Acquisition-related items


5,803



5,701Depreciation, amortization and capitalized interest


(2,539
)


(1,205
)Capitalized software costs


(9,776
)


(11,000
)Net operating loss carryforwards


61,747



61,366Foreign currency loss


298



589Share Based Compensation


3,286



2,980Allowances, accruals and other


2,349



2,045Total gross deferred income taxes


95,342



83,633Valuation allowance


(69,431
)


(59,740
)Net deferred income tax asset

$
25,911


$
23,893Balance sheet classification:Current deferred income tax asset

$
3,964


$
4,142Noncurrent deferred income tax asset


22,731



20,728Current deferred income tax liability






Noncurrent deferred income tax liability


(784
)


(977
)Net deferred income taxes

$
25,911


$
23,893          62




---



##### Table of Contents



Unrecognized tax benefits balance at January 1, 2008

$
12,950Gross increase for tax positions from prior year


2,989Gross decrease for tax positions from prior year


(575
)Settlements with taxing authorities


(10,258
)Decreases due to lapse of statute of limitations


Unrecognized tax benefits balance at December 31, 2008

$
5,106     (13)
    Cost
    Management Programs     63




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##### Table of Contents



(14)
    Employee
    Benefit Plans      (15)
    Stock
    Compensation Plans  Share-Based
    Compensation
      For the Year Ended December 31,2006


2007


2008Sales, Marketing and Services

$
2,022


$
1,406


$
1,651Research and Development


1,425



1,302



1,087General and Administrative


3,257



5,064



5,403Total share-based compensation expense

$
6,704


$
7,772


$
8,141    64




---



##### Table of Contents



For the Years Ended December 31,2006


2007


2008Expected volatility


37.09
%


45.20
%


44.02
%Expected dividend yield



%



%



%Expected risk-free interest rate


4.92
%


4.54
%


3.18
%Expected term of options


6.15 years



5.89 years



5.77 yearsMaximum contractual term


10 years



10 years



10 yearsWeighted average grant date fair value of options granted

$
14.83


$
17.57


$
18.55     Equity
    Incentive Plans
      2006


2007


2008Weighted





Weighted





Weighted


WeightedAverage





Average





Average


AverageExercise





Exercise





Exercise


RemainingPrice





Price





Price


ContractualOptions


Per Share


Options


Per Share


Options


Per Share


LifeOutstanding at beginning of year


3,263


$
18.95



2,177


$
18.76



1,352


$
18.96



5.10Granted


35



33.57



40



36.72



40



41.24



9.36Forfeited and expired


(140
)


23.83



(60
)


19.81



(4
)


24.71



5.91Exercised


(981
)


19.21



(805
)


19.24



(254
)


19.71



3.92Outstanding at end of year


2,177


$
18.76



1,352


$
18.96



1,134


$
19.56



4.66   For the Years Ended December 31,2006


2007


2008Weighted average grant-date fair value of stock options granted

$
14.83


$
17.57


$
18.55Total fair value of stock options vested


3,892



2,637



3,342Total intrinsic value of stock options exercised


14,165



17,568



4,394   65




---



##### Table of Contents



Weighted


WeightedAverage


AverageGrant Date


ExerciseOptions


Fair Value


PriceNon-vested options at December 31, 2008


20


$
15.90


$
33.03Vested options at December 31, 2008


1,114


$
9.67


$
19.32       For the Years Ended December 31,2006


2007


2008Options exercisable at year end


1,793



1,228



1,114Weighted average exercise price per share

$
19.14


$
18.98


$
19.32Weighted average remaining contractual life


5.05



5.61



4.59Aggregate intrinsic value

$
20,053


$
23,303


$
21,532     Weighted AverageRange of Exercise

Options

Remaining

Weighted Average

Options

Weighted AveragePrices

Outstanding

Contractual Life

Exercise Price

Exercisable

Exercise Price(Option data in thousands, except per share date)11.63 - 15.98


406



5.33



14.61



406



14.6116.45 - 17.25


162



5.26



17.02



157



17.0317.50 - 19.79


200



3.68



18.79



200



18.7920.50 - 22.38


205



3.00



21.27



205



21.2725.25 - 36.78


120



4.51



30.32



113



29.9639.03 - 80.54


41



9.15



42.17



33



42.96Total Stock Options


1,134



4.66


$
19.56



1,114


$
19.32     Restricted
    and Deferred Share Units
   66




---



##### Table of Contents



Weighted Average



Weighted Average



Weighted Average2006

Fair Value

2007

Fair Value

2008

Fair ValueOutstanding at beginning of year


78


$
18.20



273


$
32.03



429


$
43.07Share units granted


250


$
33.88



364


$
35.35



400


$
32.17Share units forfeited


(18
)

$
25.91



(112
)

$
9.77



(28
)

$
39.61Share units vested


(37
)

$
18.29



(96
)

$
8.11



(239
)

$
34.73Outstanding at end of year


273


$
32.03



429


$
43.07



562


$
33.32     (16)
    Common
    Stock  Authorized Capital Stock.
  Voting Rights.
  Dividend Rights; Rights Upon Liquidation.
  Other Matters.
  Common Stock Purchase Rights.
      (17)
    Common
    Stock Purchased   67




---



##### Table of Contents



(18)
    Unaudited
    Quarterly Financial Information    Mar. 31,


June 30,


Sept. 30,


Dec. 31,


Mar. 31,


June 30,


Sept. 30,


Dec. 31,2007


2007


2007


2007


2008


2008


2008


2008(In thousands, except per share data)Net revenues:License

$
34,972


$
32,366


$
34,477


$
42,139


$
38,417


$
34,823


$
33,736


$
35,126Maintenance


28,926



30,449



28,475



30,462



32,147



33,184



33,519



32,226Services


6,268



6,107



9,328



7,031



7,677



7,694



7,627



6,737Net revenues


70,166



68,922



72,280



79,632



78,241



75,701



74,882



74,089Operating expenses:Cost of license and maintenance revenues


4,247



4,546



4,277



4,658



5,299



5,221



5,716



5,707Cost of license and maintenance revenues- asset write-offs






























1,807Sales, marketing and services


33,629



33,034



35,176



37,547



39,160



38,767



37,109



37,382Research and development


12,271



12,351



11,822



14,196



11,381



11,305



10,864



10,070General and administrative


7,944



8,746



8,555



8,544



8,536



9,495



8,390



7,665Operating expenses


58,091



58,677



59,830



64,945



64,376



64,788



62,079



62,631Operating income


12,075



10,245



12,450



14,687



13,865



10,913



12,803



11,458Other income


722



1,188



2,112



2,130



2,120



698



1,017



705Income before income taxes


12,797



11,433



14,562



16,817



15,985



11,611



13,820



12,163Income tax expense


4,646



4,242



6,190



6,806



6,155



3,779



3,319



4,280Net income

$
8,151


$
7,191


$
8,372


$
10,011


$
9,830


$
7,832


$
10,501


$
7,883Basic net income per share

$
0.42


$
0.39


$
0.44


$
0.53


$
0.55


$
0.44


$
0.58


$
0.43Diluted net income per share

$
0.39


$
0.36


$
0.41


$
0.50


$
0.51


$
0.41


$
0.55


$
0.41Shares used in basic per share


19,604



18,569



19,071



18,969



17,916



17,936



18,117



18,151Shares used in diluted per share


20,997



19,928



20,304



20,120



19,181



19,072



19,214



19,016  68




---



##### Table of Contents



Schedule II  SPSS
    INC.
    VALUATION AND QUALIFYING ACCOUNTS
    Years Ended December 31, 2006, 2007 and 2008
    (In thousands)
  AdditionsBalance at


Charged to








Balance atBeginning


Costs and


Charged to





End ofDescription

of Period


Expenses


Revenues


Deductions


Period2006Allowance for doubtful accounts, product returns, and
    cancellations

$
1,748


$
163
(1)

$
1,995


$
1,920


$
1,986Inventory obsolescence reserve


324



52







67



3092007Allowance for doubtful accounts, product returns, and
    cancellations

$
1,986


$
14
(1)

$
735


$
1,524


$
1,211Inventory obsolescence reserve


309



117







80



3462008Allowance for doubtful accounts, product returns, and
    cancellations

$
1,211


$
64
(1)

$
515


$
855


$
935Inventory obsolescence reserve


346



268







363



251     (1)
    
    - Included in General and Administrative expense in the
    Consolidated Statements of Income   69




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##### Table of Contents



Item 9.
    Changes
    in and Disagreements with Accountants on Accounting and
    Financial Disclosure    Item 9A.
    Controls
    and Procedures  a. Disclosure Controls and
    Procedures.
  Rule 13a-15
  b. Internal Control Over Financial
    Reporting.
  c. Changes in Internal Control Over Financial
    Reporting.
  Item 9B.
    Other
    Information   70




---



##### Table of Contents



PART III  Item 10.
    Directors,
    Executive Officers and Corporate Governance      Code of
    Ethics
  http://www.spss.com.
  http://www.spss.com.
  Item 11.
    Executive
    Compensation      Item 12.
    Security
    Ownership of Certain Beneficial Owners and Management and
    Related Stockholder Matters   71




---



##### Table of Contents



Securities
    Authorized for Issuance under Equity Compensation
    Plans
    Number of SecuritiesRemaining Available forFuture Issuance Under EquityNumber of Securities to be

Weighted-Average

Compensation PlansIssued Upon Exercise of

Exercise Price of

(Excluding SecuritiesOutstanding Options,

Outstanding Options,

Reflected in thePlan Category

Warrants and Rights

Warrants and Rights

First Column)Equity Compensation Plans Approved by Security Holders


1,486,193
(1)

$
19.02
(2)


1,776,035
(3)Equity Compensation Plans Not Approved by Security Holders


209,805
(4)

$
21.93



Total


1,695,998


$
19.56
(2)


1,776,035     (1)
    
    Includes (a) stock options to purchase 809,454 shares
    of Common Stock issued under the LTIP with a weighted average
    exercise price of $18.89, (b) 562,214 shares of Common
    Stock to be issued upon the vesting of restricted share units
    and deferred share units issued under the LTIP for which no
    exercise price will be paid, (c) stock options to purchase
    77,850 shares of Common Stock issued under the 2000 Plan
    with a weighted average exercise price of $19.49 and
    (d) stock options to purchase 36,675 shares of Common
    Stock issued under the 1995 Plan with a weighted average
    exercise price of $20.98.(2)
    
    The calculation of weighted average exercise price includes only
    outstanding stock options.(3)
    
    Consists of 1,403,432 shares of Common Stock that remain
    available for issuance under the LTIP in the form of stock
    options, stock appreciation rights, restricted shares, or share
    units, 344,149 shares of Common Stock that generally remain
    available for issuance pursuant to the ESPP and
    28,454 shares of Common Stock issued pursuant to the ESPP
    in connection with the July 2008 to December 2008 purchase
    period (which shares were actually issued in January 2009).(4)
    
    Reflects stock options to purchase Common Stock issued under the
    1999 Plan.  non-director
 72




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##### Table of Contents



Item 13.
    Certain
    Relationships and Related Transactions, and Director
    Independence      Item 14.
    Principal
    Accountant Fees and Services     PART IV  Item 15.
    Exhibits
    and Financial Statement Schedules                       73




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##### Table of Contents



Regulation S-K.
  IncorporationExhibit



by ReferenceNumber

Description of Document

(if applicable)2
.1

Stock Purchase Agreement dated as of November 4, 2003, by
    and among SPSS Inc., SPSS International B.V. and the owners of
    all of the issued and outstanding shares of Data Distilleries
    B.V. identified on Exhibit A thereto.

(1), Ex. 2.153
.1

Certificate of Incorporation of SPSS.

(2), Ex. 3.23
.2

Amended and Restated By-Laws of SPSS.

(3), Ex. 3.14
.1

Rights Agreement, dated as of June 18, 2008, by and between
    SPSS Inc., Computershare Trust Company, N.A., as Rights
    Agent, and Computershare Investor Services, L.L.C., as Transfer
    Agent.

(4), Ex. 4.14
.2

Indenture related to the 2.50% Convertible Subordinated
    Notes due 2012, dated as of March 19, 2007, by and between
    SPSS Inc. and LaSalle Bank National Association, as Trustee
    (including form of 2.50% Convertible Subordinated Notes due
    2012).

(5), Ex. 4.110
.1

1995 Equity Incentive Plan.+

(6), Ex. 10.1410
.2

Amended and Restated 1995 Equity Incentive Plan.+

(7), Appendix A10
.3

Sublease Agreement, dated April 1, 1997, by and between
    Ernst & Young U.S. LLP and SPSS Inc.

(8), Ex. 10.2010
.4

Second Amended and Restated 1995 Equity Incentive Plan.+

(9), Appendix A10
.5

Third Amended and Restated 1995 Equity Incentive Plan.+

(10), Ex. 10.110
.6

1999 Employee Equity Incentive Plan.+

(11), Ex. 4.110
.7

2000 Equity Incentive Plan.+

(12), Ex. 10.4510
.8

OEM Agreement, dated as of November 5, 2004, by and between
    SPSS Inc. and Hyperion Solutions Corporation.

(13), Ex. 10.810
.9

SPSS Inc. Employee Stock Purchase Plan.+

(14), Ex. 10.5510
.10

Lease Agreement, dated as of November 22, 2005, by and
    between 233 S Wacker LLC and SPSS Inc.

(15), Ex. 10.5610
.11

Fourth Amendment to OEM Agreement, dated as of January 3,
    2007, by and between SPSS Inc. and Hyperion Solutions
    Corporation.*

(16), Ex. 10.110
.12

Form of Indemnification Agreement.+

(17), Ex. 10.110
.13

Form of Change of Control Agreement.+

(18), Ex. 10.110
.14

Amended and Restated Employment Agreement, dated as of
    December 17, 2007, by and between SPSS Inc. and Jack
    Noonan.+

(18), Ex. 10.210
.15

Amended and Restated Employment Agreement, dated as of
    December 17, 2007, by and between SPSS Inc. and Raymond H.
    Panza.+

(18), Ex. 10.310
.16

Credit Agreement, dated as of March 27, 2008, by and
    between SPSS Inc., as Borrower, and LaSalle Bank National
    Association, as Lender.

(19), Ex. 10.110
.17

Globalware Solutions Service Agreement, dated May 10, 2007,
    by and between SPSS Inc. and GlobalWare Solutions, Inc.

(20), Ex. 10.110
.18

Addendum to Globalware Solutions Service Agreement dated
    May 10, 2007, dated as of April 7, 2008, by and
    between SPSS Inc. and GlobalWare Solutions, Inc.

(20), Ex. 10.210
.19

Addendum 2 to Globalware Solutions Service Agreement dated
    May 10, 2007, dated as of April 7, 2008, by and
    between SPSS Inc. and GlobalWare Solutions, Inc.

(20), Ex. 10.310
.20

SPSS  Globalware Physical Fulfillment and Delivery
    Hosting Agreement  Statement of Work, dated as of
    April 7, 2008, by and between SPSS Inc. and GlobalWare
    Solutions, Inc.

(20), Ex. 10.4 74




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##### Table of Contents



IncorporationExhibit



by ReferenceNumber

Description of Document

(if applicable)10
.21

SPSS  Globalware Electronic Software Delivery Hosting
    Agreement  Statement of Work, dated as of
    April 7, 2008, by and between SPSS Inc. and GlobalWare
    Solutions, Inc.

(20), Ex. 10.510
.22

SPSS Inc. Long Term Incentive Plan.+

(21), Appendix A21
.1

Subsidiaries.23
.1

Consent of Grant Thornton 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 the 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 the Chief Financial Officer pursuant to
    18 U.S.C. Section 1350, as adopted pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002.99
.1

License Agreement, dated September 30, 1976, by and between
    SPSS Inc., as licensee, and Norman H. Nie and C. Hadlai Hull, as
    licensors.

(22), Ex. 99.1     *
    
    By order of the Securities and Exchange Commission dated
    July 13, 2007, a request for confidential treatment has
    been granted for certain portions of this exhibit. Confidential
    portions of this exhibit are omitted and have been filed
    separately with the Securities and Exchange Commission pursuant
    to
    Rule 24b-2
    under the Securities Exchange Act of 1934.(1)
    
    Previously filed with the Current Report on
    Form 8-K
    of SPSS Inc., dated November 5, 2003, filed on
    November 18, 2003. (File
    No. 000-22194)(2)
    
    Previously filed with Amendment No. 2 to the Registration
    Statement on
    Form S-1
    of SPSS Inc. filed on August 4, 1993. (File
    No. 33-64732)(3)
    
    Previously filed with the Current Report on
    Form 8-K
    of SPSS Inc., dated October 25, 2007, filed on
    October 26, 2007. (File
    No. 000-22194)(4)
    
    Previously filed with the Current Report on
    Form 8-K
    of SPSS Inc., dated June 18, 2008, filed on June 18,
    2008. (File
    No. 000-22194)(5)
    
    Previously filed with the Current Report on
    Form 8-K
    of SPSS Inc., dated March 19, 2007, filed on March 22,
    2007. (File
    No. 000-22194)(6)
    
    Previously filed with the 1995 Proxy Statement of SPSS Inc.
    filed on May 19, 1995. (File
    No. 000-22194)(7)
    
    Previously filed with the 1996 Proxy Statement of SPSS Inc.
    filed on May 16, 1996. (File
    No. 000-22194)(8)
    
    Previously filed with the Quarterly Report on
    Form 10-Q
    of SPSS Inc. for the quarterly period ended March 31, 1997.
    (File
    No. 000-22194)(9)
    
    Previously filed with the 1998 Proxy Statement of SPSS Inc.
    filed on May 19, 1998. (File
    No. 000-22194)(10)
    
    Previously filed with the Quarterly Report on
    Form 10-Q
    of SPSS Inc. for the quarterly period ended June 30, 1999.
    (File
    No. 000-22194)(11)
    
    Previously filed with the Registration Statement on
    Form S-8
    of SPSS Inc. filed on September 15, 2000. (File
    No. 333-45900)(12)
    
    Previously filed with the Registration Statement on
    Form S-4
    on of SPSS Inc. filed on December 19, 2000. (File
    No. 333-52216)(13)
    
    Previously filed with the Annual Report on
    Form 10-K
    of SPSS Inc. for the fiscal year ended December 31, 2007,
    filed on February 21, 2008. (File No.
    000-22194) 75




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##### Table of Contents



(14)
    
    Previously filed with the Current Report on
    Form 8-K
    of SPSS Inc., dated June 15, 2005, filed on June 15,
    2005. (File
    No. 000-22194)(15)
    
    Previously filed with the Current Report on
    Form 8-K
    of SPSS Inc., dated November 22, 2005, filed on
    November 23, 2005. (File
    No. 000-22194)(16)
    
    Previously filed with the Current Report on
    Form 8-K
    of SPSS Inc., dated January 3, 2007, filed on
    January 9, 2007. (File
    No. 000-22194)(17)
    
    Previously filed with the Current Report on
    Form 8-K
    of SPSS Inc., dated May 21, 2007, filed on May 25,
    2007. (File
    No. 000-22194)(18)
    
    Previously filed with the Current Report on
    Form 8-K
    of SPSS Inc., dated December 17, 2007, filed on
    December 17, 2007. (File
    No. 000-22194)(19)
    
    Previously filed with the Current Report on
    Form 8-K
    of SPSS Inc., dated March 27, 2008, filed on March 27,
    2008. (File
    No. 000-22194)(20)
    
    Previously filed with the Current Report on
    Form 8-K
    of SPSS Inc., dated April 7, 2008, filed on April 7,
    2008. (File
    No. 000-22194)(21)
    
    Previously filed with the 2008 Proxy Statement of SPSS Inc.
    filed on March 25, 2008. (File
    No. 000-22194)(22)
    
    Previously filed with the Current Report on
    Form 8-K
    of SPSS Inc., dated December 31, 2007, filed on
    December 31, 2007. (File
    No. 000-22194) 76




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##### Table of Contents



SIGNATURES
      By:

/s/  Jack
    NoonanJack NoonanDate: February 18, 2009



Chief Executive Officer, President and
    Chairman of the Board of Directors     Signature

Title

Date/s/  Jack
    NoonanJack
    Noonan

Chief Executive Officer, President and Chairman of the Board of
    Directors

February 18, 2009/s/  Raymond
    H. PanzaRaymond
    H. Panza

Executive Vice President, Corporate Operations, Chief Financial
    Officer and Secretary

February 18, 2009/s/  Marc
    D. NelsonMarc
    D. Nelson

Vice President, Corporate Controller and Principal Accounting
    Officer

February 18, 2009/s/  Henry
    S. BienenHenry
    S. Bienen

Director

February 18, 2009/s/  William
    B. BinchWilliam
    B. Binch

Director

February 18, 2009/s/  Michael
    BlairMichael
    Blair

Director

February 18, 2009/s/  Michael
    E. LavinMichael
    E. Lavin

Director

February 18, 2009/s/  Merritt
    LutzMerritt
    Lutz

Director

February 18, 2009/s/  Patricia
    B. MorrisonPatricia
    B. Morrison

Director

February 18, 2009/s/  Charles
    R. WhitchurchCharles
    R. Whitchurch

Director

February 18, 2009  77




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##### Table of Contents



EXHIBIT INDEX
  ExhibitNumber

Document Description21
.1

Subsidiaries.23
.1

Consent of Grant Thornton 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.  78