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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



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FORM 10-K



(Mark One)

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



For the fiscal year ended November 30, 2008



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



For the transition period fromto



Commission File Number: 000-26579



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TIBCO SOFTWARE INC.

(Exact name of registrant as specified in its charter)



|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|Delaware                                                       |  | 77-0449727                          
|(State or other jurisdiction of incorporation or organization) |  | (I.R.S. Employer Identification No.)



3303 Hillview
Avenue, Palo Alto, CA 94304

(Address of principal executive offices) (Zip Code)



Registrants telephone number, including area code:
(650) 846-1000



Securities registered pursuant to
Section 12(b) of the Act:



|                                         |  |                                       
|---------------------------------------- |  | --------------------------------------
|Common Stock, $0.001 par value per share |  | The NASDAQ Global Select Market       
|(Title of class)                         |  | (Name of exchange on which registered)



Securities
registered pursuant to Section 12(g) of the Act:

None



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Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes  x    No   ̈



Indicate by check mark if the
registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.    Yes   ̈    No  x



Indicate by check mark whether the registrant
(1) has filed all reports required 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 such 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 (§229.405 of this chapter) 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 a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.
See definitions of large accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act. (Check one):



|                                                                                                                                       |  |  |  |                                               |  | 
|-------------------------------------------------------------------------------------------------------------------------------------- |  |  |  | --------------------------------------------- |  | 
|Large accelerated filer  x            Accelerated filer   ̈            Non-accelerated filer   ̈            Smaller reporting company   ̈
|                                                                                                                                       |  |  |  | (Do not check if a smaller reporting company) |  | 



Indicate by check
mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes   ̈    No  x



The aggregate market value of the voting stock held by
non-affiliates of the registrant (based upon the closing sale price of such shares on the NASDAQ Global Select Market on May 30, 2008) was approximately $1,008,729,322. Shares of common stock held by each executive officer and director and by
each entity that owns 5% or more of the outstanding common stock have been excluded in that such persons may be deemed to be affiliates. This determination of affiliate status is not necessarily a conclusive determination for other purposes.



As of January 22, 2009, there were 174,455,500 shares of
the registrants common stock outstanding.



DOCUMENTS
INCORPORATED BY REFERENCE



Portions of the
registrants Proxy Statement for the 2009 Annual Meeting of Stockholders to be held on April 8, 2009 are incorporated by reference into Part III of this Annual Report on Form 10-K to the extent stated herein.



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TIBCO SOFTWARE INC.

For the Fiscal Year Ended November 30, 2008

TABLE OF CONTENTS



|         |  |                                                                                                              |  |         
|-------- |  | ------------------------------------------------------------------------------------------------------------ |  | --------
|         |  |                                                                                                              |  | Page No.
|PART I  
|         |  |                                                                                                             
|ITEM 1.  |  | BUSINESS                                                                                                     |  | 1       
|         |  |                                                                                                             
|ITEM 1A. |  | RISK FACTORS                                                                                                 |  | 5       
|         |  |                                                                                                             
|ITEM 1B. |  | UNRESOLVED STAFF COMMENTS                                                                                    |  | 14      
|         |  |                                                                                                             
|ITEM 2.  |  | PROPERTIES                                                                                                   |  | 14      
|         |  |                                                                                                             
|ITEM 3.  |  | LEGAL PROCEEDINGS                                                                                            |  | 15      
|         |  |                                                                                                             
|ITEM 4.  |  | SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                                                          |  | 15      
|        
|PART II 
|         |  |                                                                                                             
|ITEM 5.  |  | MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES |  | 16      
|         |  |                                                                                                             
|ITEM 6.  |  | SELECTED FINANCIAL DATA                                                                                      |  | 19      
|         |  |                                                                                                             
|ITEM 7.  |  | MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS                        |  | 21      
|         |  |                                                                                                             
|ITEM 7A. |  | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                                                   |  | 39      
|         |  |                                                                                                             
|ITEM 8.  |  | FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA                                                                  |  | 40      
|         |  |                                                                                                             
|ITEM 9.  |  | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE                         |  | 40      
|         |  |                                                                                                             
|ITEM 9A. |  | CONTROLS AND PROCEDURES                                                                                      |  | 40      
|         |  |                                                                                                             
|ITEM 9B. |  | OTHER INFORMATION                                                                                            |  | 41      
|        
|PART III
|         |  |                                                                                                             
|ITEM 10. |  | DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE                                                       |  | 42      
|         |  |                                                                                                             
|ITEM 11. |  | EXECUTIVE COMPENSATION                                                                                       |  | 44      
|         |  |                                                                                                             
|ITEM 12. |  | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS               |  | 44      
|         |  |                                                                                                             
|ITEM 13. |  | CERTAIN RELATIONSHIPS, RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE                                        |  | 44      
|         |  |                                                                                                             
|ITEM 14. |  | PRINCIPAL ACCOUNTING FEES AND SERVICES                                                                       |  | 45      
|        
|PART IV 
|         |  |                                                                                                             
|ITEM 15. |  | EXHIBITS AND FINANCIAL STATEMENT SCHEDULES                                                                   |  | 46      
|         |  |                                                                                                             
|         |  | SIGNATURES                                                                                                   |  | II-1    



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Forward-Looking Statements

This Annual Report on Form 10-K contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the Securities Act) and Section 21E of the
Securities Exchange Act of 1934, as amended (the Exchange Act). Forward-looking statements relate to expectations concerning matters that are not historical facts. Words such as projects, believes,
anticipates, plans, expects, intends, strategy, continue, will, estimate, forecast and similar words and expressions are intended to identify
forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements contained herein are reasonable, these expectations or any of the forward-looking statements could prove to be incorrect, and actual
results could differ materially from those projected or assumed in the forward-looking statements. Our future financial condition and results of operations, as well as any forward-looking statements, are subject to risks and uncertainties,
including, but not limited to, the factors set forth under Item 1A. Risk Factors. All forward-looking statements and reasons why results may differ included in this Annual Report on Form 10-K are made as of the date hereof, and we
assume no obligation to update any such forward-looking statements or reasons why actual results may differ.

PART I



|ITEM 1. | BUSINESS
|------- | --------

Overview

TIBCO Software Inc. (TIBCO, the Company, we or us),
a Delaware corporation, is a leading provider of infrastructure software. We provide a broad range of standards-based infrastructure software solutions that help organizations achieve the benefits of real-time business. Our infrastructure software
gives customers the ability to constantly innovate by connecting incompatible information technology assets in a service-oriented architecture and streamlining activities through business process management. We give customers the information and
intelligence tools they need to make faster and smarter decisionswhat we call The Power of Now®.

As the basis of the real-time movement of data across the enterprise, TIBCOs software is uniquely capable of correlating information in real-time about an organizations operations and performance with
information about expected behavior and business rules so a company can anticipate and respond to threats and opportunities before they occur. Our software enables our customers to leverage and extend the capabilities of their own information
technology applications and assets to move towards a new way of doing business that lets organizations anticipate customer needs, create opportunities and avoid potential problems.

We are the successor to a portion of the business of Teknekron Software Systems, Inc.
(Teknekron). Teknekron developed software, known as The Information Bus® (TIB) technology, for the integration and delivery of market data, such as stock quotes,
news and other financial information, in trading rooms of large banks and financial services institutions. In 1992, Teknekron expanded its development efforts to include solutions designed to enable complex and disparate manufacturing equipment and
software applications, primarily in the semiconductor fabrication market, to communicate within the factory environment. Teknekron was acquired by Reuters Group PLC (Reuters), the global information company, in 1994. Following the
acquisition, continued development of the TIB® technology was undertaken to expand its use in the financial services markets.

In January 1997, TIBCO was established as an entity separate from Teknekron. We were formed to create and market software solutions for use in the
integration of business information, processes and applications. In connection with our establishment as a separate entity, Reuters transferred to us certain assets and liabilities related to our business and granted to us a royalty-free license to
the intellectual property from which some of our messaging software products originated.



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Trademarks

TIBCO, TIBCO Software, The Information Bus, TIB, The Power of Now and Spotfire are the trademarks or registered trademarks of TIBCO Software Inc. in the United States and other countries. This Annual Report on Form 10-K also refers to the
trademarks of other companies.

Products

We offer a wide range of software products that can be sold individually to solve specific technical challenges, but the emphasis of our product development and sales efforts is to create products that interoperate and can be sold together
as a suite to enable businesses to be more cost-effective, agile and efficient. These products can help organizations achieve success in three areas: service-oriented architecture (SOA), business optimization and business process
management (BPM).



| |  |  | SOA: Our software helps organizations migrate to an IT infrastructure made up of services that can be assembled, orchestrated and reused. SOA turns
information and functions into discrete and reusable components that can be invoked from across the business and aggregated with other such services to create composite applications. This helps companies streamline the integration and
orchestration of assets across technological, organizational and geographical boundaries. Our software enables the creation, management and virtualization of heterogeneous services and provides a unified environment for policy and service
management. It also delivers capabilities in the areas of service mediation, orchestration and communication and the development of rich internet applications. Our products give companies the flexibility to do these things using the standards or
technologies that best meet their needs in specific situations (such as HTTP, e-mail, J2EE, EDI, Messaging, .NET, Web Services, etc.) without replacing existing technologies or committing to any one technology across the enterprise.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Business optimization: Our software helps organizations convert and analyze data to create meaningful information and deliver it to employees, customers and
partners. Our software also tracks large volumes of real-time events as they occur and applies sophisticated rules in order to identify patterns that signify problems, threats and opportunities, and can automatically initiate appropriate
notifications or adaptations of processes. This helps line-level employees perform their jobs, helps managers identify and analyze problems and opportunities, and gives customers the ability to get accurate and consistent information directly or
through salespeople, service personnel or customer care representatives.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | BPM: Our software helps organizations better coordinate the process flows that control how their assets work together. This software can coordinate the human
and electronic resources inside a business and its network of customers and partners. Our products not only automate routine tasks and exception handling, but orchestrate long-lived activities and transactions that cut across organizational and
geographical boundaries. Our software enables organizations to provide a higher level of customer satisfaction, retain customers, maximize partnerships with other businesses and out-execute their competitors.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Our products are currently licensed by companies worldwide in diverse industries such as financial services, telecommunications, retail, healthcare,
manufacturing, energy, transportation, logistics, government and insurance. We sell our products through a direct sales force and through alliances with leading software vendors and systems integrators.

Services

Professional Services

Our professional services offerings include a wide range of consulting services such as systems planning and design, installation and systems integration
for the rapid deployment of TIBCO products. We offer our professional services with the initial deployment of our products as well as on an ongoing basis to address the



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continuing needs of our customers. Our professional services staff is located throughout the Americas; Europe, the Middle East and Africa (EMEA);
and Asia Pacific and Japan (APJ) enabling us to perform installations and respond to customer demands rapidly across our global customer base. Many of our professional services employees have advanced degrees, substantial TIBCO
experience and industry expertise in systems architecture and design; additionally, many also have domain expertise in financial services, telecommunications, manufacturing, energy, logistics, healthcare and other industries.

We also have relationships with resellers, professional service organizations and system integrators including Accenture, Atos Origin, BearingPoint, Cap
Gemini, Deloitte Consulting, Electronic Data Systems, HCL Technologies and Infosys Technologies, which include their participation in the deployment of our products to customers. These relationships help promote TIBCO products and provide additional
technical expertise to enable us to provide the full range of professional services our customers require to deploy our products.

Maintenance and Support

We offer a suite of software support and maintenance options that are designed to meet the needs of
our diverse customer base. These support options include 24 hour coverage that is available seven days a week, 365 days a year, to meet the needs of our global customers. To accomplish this level of support we have established a worldwide support
organization with major support centers in Palo Alto, California; London and Swindon, England; Woy Woy, Australia; Beijing, China; and Pune, India. These centers, working in conjunction with several smaller support offices located throughout the
Americas, EMEA and APJ, provide seamless support using a follow-the-sun support model.

In addition to support teams around the
globe, we have a customer support website that provides our customers with the ability to submit service requests, receive confirmation that a service request has been opened and obtain current status on these requests. Additionally, the customer
support website provides access to our support procedures, escalation numbers and late breaking news (LBN). LBN is used to provide updates and new information about our products. It also provides customers with information on generally
known problems and suggested solutions or workarounds that may be available.

Training

We provide a comprehensive and global training program for customers and partners. Training is available at our main office in Palo Alto, California and
at major training centers in Houston, Texas; Maidenhead, England; Munich, Germany; and Tokyo, Japan. We also deliver training on-site at customer locations. Our educational services group has the capability to develop solutions to address the
specific needs of individual customers and partners. Our curriculum leads to an industry recognized technical certification in TIBCO technologies.

Sales

We currently market our software and services primarily through a direct sales organization complemented by indirect
sales channels. Our direct sales force is located throughout the Americas, EMEA and APJ and operates globally through our foreign subsidiaries.

Our revenue consists of license and service and maintenance fees from our customers and distributors. License fees represented approximately 42%, 45% and 46% of our total revenue in fiscal years 2008, 2007 and 2006, respectively. Revenue
from service and maintenance represented approximately 58%, 55% and 54% of our total revenue in fiscal years 2008, 2007 and 2006, respectively.

Sales to customers outside the United States totaled $342.5 million, representing 53% of our total revenue in fiscal year 2008. For a geographic breakdown of our revenue and property and equipment, see Note 21 to our Consolidated Financial
Statements included in this Annual Report on Form 10-K.



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Marketing

We use a mix of market research, analyst updates, seminars, direct mail, print advertising, trade shows, speaking engagements, public relations, customer newsletters and web marketing in order to achieve our marketing goals. Our marketing
department also produces collateral material for distribution to potential customers including presentation materials, white papers, brochures, magazines and fact sheets. We also host annual user conferences for our customers and provide support to
our channel partners with a variety of programs, training and product marketing support materials.

Seasonality

Our business is subject to variations throughout the year due to seasonal factors in the United States and worldwide. These factors include fewer selling
days during the summer vacation season (which has a disproportionate effect on sales in Europe), the impact of the December holidays and a slow down in capital expenditures by our customers after calendar year-end (during our first fiscal quarter).
These factors typically constrain sales activity in our first and third fiscal quarters compared to the rest of the year, and they make quarter-to-quarter comparisons of our operating results less meaningful.

Competition

The market for our products and services
is extremely competitive and subject to rapid change. While we offer a comprehensive suite of integration solutions and believe we are the market leader among infrastructure software companies, we compete with various providers of infrastructure
software including IBM, Microsoft, Oracle, Pegasystems, SAP and Software AG. We offer a complete suite of infrastructure software products, but IBM, Microsoft, Oracle and SAP offer products outside our segment and routinely bundle their broader set
of products with their infrastructure software products. We expect additional competition from other established and emerging companies. In addition, we may face pricing pressures from our current competitors and new market entrants in the future.
We believe that the competitive factors affecting the market for our products and services include product functionality and features, quality of professional services offerings, performance and price, ease of product implementation, quality of
customer support services, customer training and documentation, and vendor and product reputation. The relative importance of each of these factors depends upon the specific customer environment. We believe that our products and services currently
compete favorably with respect to such factors. However, we may not be able to maintain our competitive position against current and potential competitors.

Research and Development

Our success is heavily dependent upon our ability to develop new products and technologies and to
enhance our existing products. We expect that a majority of our research and development activities will focus on enhancing and extending our TIBCO products and that such enhancements and new products will be developed internally. However, as part
of our development strategy, we may also license or acquire externally developed technologies for inclusion in our product lines. We expect that we will continue to commit significant resources to product development in the future. Product
development costs are recorded as research and development expenses. Our research and development expenses, including stock-based compensation expense, were $106.6 million, $92.9 million and $85.9 million in fiscal years 2008, 2007 and 2006,
respectively. To date, all product development costs have been expensed as incurred, because the time period between achieving technological feasibility for a product and the general availability of such product has typically been very short.

Proprietary Technology

Our success is
dependent upon our proprietary software technology. We believe that factors such as the technological and creative skills of our personnel, product enhancements and new product developments are all essential to establishing and maintaining a
technology leadership position. We hold numerous United States and



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foreign patents and have several pending patent applications. We additionally license some patents from Reuters on a royalty-free basis. These patent rights
notwithstanding, we currently rely primarily on trade secret rights, copyright and trademark laws, and nondisclosure and other contractual agreements to protect our technology. We enter into confidentiality and/or license agreements with our
employees, distributors and customers, and limit access to and distribution of our software, documentation and other proprietary information. Despite these protective measures, third parties could still copy and use our products or otherwise
misappropriate our technology.

Furthermore, third parties might independently develop competing technologies that include the same
functionality or features, or otherwise are substantially equivalent or superior to our technologies. In addition, effective patent, copyright, trademark and trade secret protection may be unavailable or limited in certain foreign countries where we
operate. Our business could suffer serious harm if we fail to protect our proprietary technology.

Employees

As of November 30, 2008, we employed 2,070 persons, including 658 in sales and marketing, 551 in research and development, 246 in general and
administrative and 615 in professional services and technical support. Of our 2,070 employees, 1,137 were located in the Americas, 542 in EMEA and 391 in APJ. Our success is highly dependent on our ability to attract and retain qualified employees.
Competition for employees is intense in the software industry. To date, we believe we have been successful in our efforts to recruit qualified employees, but there is no assurance that we will continue to be as successful in the future.

Available Information

Our principal internet
address is www.tibco.com. Our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to reports filed pursuant to Sections 13(a) and 15(d) of the Securities Exchange Act of 1934,
as amended, are filed with the United States Securities and Exchange Commission (the SEC). Such reports and other information filed by us with the SEC are available on the Investor Information page of our website at
http://www.tibco.com/company/investor_info when such reports are available on the SEC website. The public may read and copy any materials we have filed with the SEC at the SECs Public Reference Room at 100 F Street, NE, Washington, DC
20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC maintains an Internet site that contains reports, proxy, and information statements and other information regarding
issuers that file electronically with the SEC at http://www.sec.gov. The contents of these websites are not incorporated into this filing. Further, the references to the URLs for these websites are intended to be inactive textual references
only.



|ITEM 1A. | RISK FACTORS
|-------- | ------------

The following risk factors, as
well as other factors of which we may be unaware or do not currently view as significant, could materially and adversely affect our future operating results and could cause actual events to differ materially from those predicted in the
forward-looking statements we make about our business.

Political and economic conditions are likely to materially adversely affect our revenue and
results of operations.

Our business has been and may continue to be affected by a number of factors that are beyond our control such as
general geopolitical economic and business conditions, conditions in the financial services markets, and changes in the overall demand for enterprise software and services. A severe and/or prolonged economic downturn could adversely affect our
customers financial condition and the levels of business activity of our customers. Uncertainty about current global economic conditions could cause businesses to postpone spending in



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response to tighter credit, negative financial news and/or declines in income or asset values, which could have a material negative effect on the demand for
enterprise software and services. Reduced demand for enterprise software could result in a reduction in our future license revenue and a reduction in the rate at which our customers renew their maintenance agreements and procure consulting services.

The current economic crisis affecting the banking system and financial markets and the current uncertainty in global economic conditions
have resulted in a tightening in the credit markets, a low level of liquidity in many financial markets, and extreme volatility in credit, equity, currency and fixed income markets. There could be a number of follow-on effects from these economic
developments and negative economic trends on our business, including the inability of customers to obtain credit to finance purchases of our products; customer insolvencies; decreased customer confidence to make purchasing decisions; decreased
customer demand; and decreased customer ability to pay their trade obligations.

If conditions in the global economy, U.S. economy or other
key vertical or geographic markets remain uncertain or weaken further, such conditions could have a material adverse impact on our business, operating results and financial condition. In addition, if we are unable to successfully anticipate changing
economic and political conditions, we may be unable to effectively plan for and respond to those changes, which could materially adversely affect our business and results of operations.

Our future revenue is unpredictable, and we expect our quarterly operating results to fluctuate, which may cause our stock price to decline.

As a result of the evolving nature of the markets in which we compete and the size of our customer agreements, we have difficulty accurately forecasting
our revenue in any given period. In addition to the factors discussed elsewhere in this section, a number of factors may cause our revenue to fall short of our expectations, or those of stock market analysts and investors, or cause fluctuations in
our operating results, including:



| |  |  | the relatively long sales cycles for many of our products;
| | - |  | ----------------------------------------------------------



| |  |  | the timing of our new products or product enhancements or any delays in such introductions;
| | - |  | -------------------------------------------------------------------------------------------



| |  |  | the delay or deferral of customer implementations of our products;
| | - |  | ------------------------------------------------------------------



| |  |  | changes in customer budgets and decision making processes that could affect both the timing and size of any transaction;
| | - |  | ------------------------------------------------------------------------------------------------------------------------



| |  |  | reduced spending in the industries that license our products;
| | - |  | -------------------------------------------------------------



| |  |  | our dependence on large deals, which, if such deals do not close, can greatly impact revenues for a particular quarter;
| | - |  | -----------------------------------------------------------------------------------------------------------------------



| |  |  | the timing, size and mix of orders from customers;
| | - |  | --------------------------------------------------



| |  |  | the deferral of license revenue to future periods due to the timing of the execution of an agreement or our ability to deliver the products;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the impact of our provision of services and customer-required contractual terms on our recognition of license revenue;
| | - |  | ----------------------------------------------------------------------------------------------------------------------



| |  |  | any unanticipated difficulty we encounter in integrating acquired businesses, products or technologies;
| | - |  | -------------------------------------------------------------------------------------------------------



| |  |  | the tendency of some of our customers to wait until the end of a fiscal quarter or our fiscal year in the hope of obtaining more favorable terms;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the amount and timing of operating costs and capital expenditures relating to the expansion of our operations and the evaluation of strategic transactions; and
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | changes in accounting rules, such as recording expenses for employee stock option grants and tax accounting, including accounting for uncertain tax positions.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------



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Period-to-period comparisons of our operating results may not be a good indication of our future
performance. Moreover, our operating results in some quarters have not in the past met, and may not in the future meet, the expectations of stock market analysts and investors.

In addition, while we may in future years record positive net income and/or increases in net income over prior periods, we may not show
period-over-period earnings per share growth or earnings per share growth that meets the expectations of stock market analysts and investors as a result of the number of our shares outstanding during such periods. In such case, our stock price may
decline.

Uneven growth and periods of contraction in the infrastructure software market have caused our revenue to decline in the past and could cause
our revenue or results of operations to fall below expectations in the future.

We earn a substantial portion of our revenue from
licenses of our infrastructure software, including application integration software and sales of related services. We expect to earn substantially all of our revenue in the foreseeable future from sales of these products and services. Our future
financial performance will depend on continued growth in the number of organizations demanding software and services for application integration and information delivery and companies seeking outside vendors to develop, manage and maintain this
software for their critical applications. Lower spending by corporate and governmental customers around the world, which has had a disproportionate impact on information technology spending, has led to a reduction in sales in the past and may
continue to do so in the future. Many of our potential customers have made significant investments in internally developed systems and would incur significant costs in switching to third-party products, which may substantially inhibit the growth of
the market for infrastructure software. If the market fails to grow, or grows more slowly than we expect, our sales will be adversely affected. Also, even if corporate and governmental spending increases and companies make greater investments in
information technology and infrastructure software, our revenue may not grow at the same pace.

If we fail to manage our exposure to financial and
securities market risk successfully, our operating results could be adversely impacted.

We are exposed to financial market risks,
including changes in interest rates, credit markets and prices of marketable equity and fixed-income securities. We do not use derivative financial instruments for speculative or trading purposes.

The primary objective of most of our investment activities is to preserve principal while at the same time maximizing yields without significantly
increasing risk. To achieve this objective, our marketable investments are primarily investment grade, liquid, fixed-income securities and money market instruments denominated in U.S. dollars. If the carrying value of our investments exceeds the
fair value, and the decline in fair value is deemed to be other-than-temporary, we will be required to further write down the value of our investments, which could materially harm our results of operations and financial condition. Moreover, the
performance of certain securities in our investment portfolio correlates with the credit condition of the United States financial sector. With the current unstable credit environment, we may incur significant realized, unrealized or impairment
losses associated with these investments.

Changes in foreign currency exchange rates could negatively affect our operating results.

A significant portion of our net revenue and expenses are transacted in U.S. dollars. In addition, we also conduct our business in approximately 20
foreign currencies in EMEA and APJ. As a response to the risks of changes in value of foreign currency denominated transactions, we may enter into foreign currency forward contracts or other instruments, the majority of which mature within
approximately one month. Our foreign currency forward contracts reduce, but do not eliminate, the impact of currency exchange rate movements. For example, we do not execute forward contracts in all currencies in which we conduct business. In
addition, our



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hedging program may not reduce the impact of short-term or long-term volatility in foreign exchange rates. Accordingly, amounts denominated in such foreign
currencies may fluctuate in value and produce significant earnings and cash flow volatility.

Any losses we incur as a result of our exposure to the
credit risk of our customers and partners could harm our results of operations.

We monitor individual customer payment capability in
granting credit arrangements, seek to limit credit to amounts we believe the customers can pay, and maintain reserves we believe are adequate to cover exposure for doubtful accounts. As we have grown our revenue and customer base, our exposure to
credit risk has increased. Any material losses to date as a result of customer defaults, could harm and have an adverse effect on our business, operating results and financial condition.

Our stock price may be volatile, which could cause investors to incur significant losses.

The stock
market in general and the stock prices of technology companies in particular, have experienced volatility which has often been unrelated to the operating performance of any particular company or companies. In addition, uncertainty about current
global economic conditions could also continue to increase the volatility of our stock price. During this fiscal year, our stock price has fluctuated between a high of $8.78 and a low of $3.45. If market or industry-based fluctuations continue, our
stock price could decline in the future regardless of our actual operating performance and investors could incur significant losses.

We may incur
impairments to goodwill, intangible or long-lived assets.

We review our goodwill, intangible and long-lived assets for impairment
annually in the fourth quarter or whenever events or changes in circumstances indicate that the carrying amount of these assets may not be recoverable.

Significant negative industry or economic trends, including the lack of recovery in the market price of our common stock, reduced estimates of future cash flows or disruptions to our business could indicate that
goodwill, intangible or long-lived assets might be impaired. If, in any period, our stock price decreases to the point where our market capitalization is less than our book value, this too could indicate a potential impairment and we may be required
to record an impairment charge in that period.

Our valuation methodology for assessing impairment requires management to make judgments
and assumptions based on historical experience and to rely on projections of future operating performance. We operate in highly competitive environments and projections of future operating results and cash flows may vary significantly from results.
Additionally, if our analysis results in an impairment to our goodwill, we would be required to record a non-cash charge to earnings in our financial statements during a period in which such impairment is determined to exist.

Our success depends on our ability to overcome significant competition and to offer products and enhancements that respond to emerging technological trends and
customers needs.

The market for our products and services is extremely competitive and subject to rapid change. We compete with a
variety of large and small providers of infrastructure software, SOA, business optimization and BPM, including companies such as IBM, Microsoft, Oracle, Pegasystems, SAP and Software AG. We believe that of these companies, IBM has the potential to
offer the most complete competitive set of products relative to our offerings. In addition, companies such as IBM, Microsoft, Oracle and SAP offer products outside our segment and routinely bundle their broader set of products with their
infrastructure software products. Further, some of our competitors are expanding their competitive product offerings and market position through acquisitions and internal research and development. We expect additional competition from other
established and emerging



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companies. We also face competition for certain aspects of our product and service offerings from major systems integrators. Further, we may face increasing
competition from open source software providers such as MuleSource that provide software and intellectual property, typically without charging license fees, or from other competitors offering products through alternative business models, such as
software as a service. If customers choose such alternatives over our proprietary software, our revenues and earnings could be adversely affected.

Many of our current and potential competitors have longer operating histories, significantly greater financial, technical, product development and marketing resources, greater name recognition, and larger customer bases than we do.
Continued consolidation in the software market may further strengthen our larger competitors. Our present or future competitors may be able to develop products comparable or superior to those we offer, adapt more quickly than we do to new
technologies, evolving industry trends or customer requirements, or devote greater resources to the development, promotion and sale of their products than we do. Accordingly, we may not be able to compete effectively in our markets or competition
may intensify and harm our business and operating results.

If we are not successful in developing enhancements to existing products and
new products in a timely manner, achieving customer acceptance for our existing and new product offerings or generating higher average selling prices, our gross margins may decline, and our business and operating results may
suffer. Furthermore, any of our new product offerings or significant enhancements to current product offerings could cause some customers to delay making new or additional purchases while they fully evaluate any new offerings we might have
introduced to the market, which in turn may slow sales and adversely affect operating results for an indeterminate period of time. Also, we may not execute successfully on our product plans because of errors in product planning or timing, technical
hurdles that we fail to overcome in a timely fashion or a lack of appropriate resources. This could result in competitors providing those solutions before we do and loss of market share, net sales and earnings.

Our strategy contemplates future acquisitions that may result in us incurring unanticipated expenses or additional debt, difficulty in integrating our operations and
dilution to our stockholders and may harm our operating results.

Our success depends in part on our ability to continually enhance and
broaden our product offerings in response to changing technologies, customer demands and competitive pressures. We expect to acquire complementary businesses, products or technologies in the future as part of our corporate strategy. In this regard,
we have made strategic acquisitions, including the acquisition of Insightful Corporation in fiscal 2008 and Spotfire Holdings, Inc. in fiscal 2007. We do not know if we will be able to complete any future acquisitions or that we will be able to
successfully integrate any acquired business, operate it profitably or retain its key employees. Integrating any newly acquired business, product or technology could be expensive and time-consuming, could disrupt our ongoing business and financial
performance and could distract our management. Therefore, we may not be able, either immediately post-acquisition or ever, to replicate the pre-acquisition revenues achieved by companies that we acquire or achieve the benefits of the acquisition we
anticipated in valuing the businesses, products or technologies we acquire. Furthermore, the costs of integrating acquired companies in international transactions can be particularly high, due to local laws and regulations. If we are unable to
integrate any newly acquired entity, products or technology effectively, our business, financial condition and operating results would suffer. In addition, any amortization or impairment of acquired intangible assets, stock-based compensation or
other charges resulting from the costs of acquisitions could harm our operating results.

In addition, we may face competition for
acquisition targets from larger and more established companies with greater financial resources. Also, in order to finance any acquisition, we may need to raise additional funds through public or private financings or use our cash reserves. In that
event, we could be forced to obtain equity or debt financing on terms that are not favorable to us or that result in dilution to our stockholders. Use of our cash reserves for acquisitions could limit our financial flexibility in the future. The
terms of existing loan agreements



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may place limits on our ability to incur additional debt to finance acquisitions. If we are not able to acquire strategically attractive businesses, products
or technologies, we may not be able to remain competitive in our industry or achieve our overall growth plans.

Increases in service revenues may
decrease overall margins.

We may in the future realize a higher percentage of our revenue from services, which has a lower profit
margin than license or maintenance revenue. As a result, if services revenue increase as a percentage of total revenue, our overall profit margin may decrease, which could impact our stock price.

Because the value of our equity incentive programs has diminished as a retention and recruiting tool, we may need to change our compensation packages in order to
remain competitive which in turn could negatively affect our profit margins.

We have historically used equity incentive programs, such
as employee stock options and stock purchase plans, as a part of overall employee compensation arrangements. We have changed our stock purchase plan, reduced the size and number of stock option grants we give to our employees, changed the form of
equity compensation we give to some of our employees and may make further changes to our equity compensation programs, all of which may decrease the effectiveness of our plans as employee retention and recruiting tools. In addition, the decline in
our stock price has negatively impacted, and may continue to negatively impact, the value of such equity incentives, thereby diminishing the value of such incentive programs to employees and decreasing the effectiveness of such programs as retention
and recruiting tools. Given this, we may need to change our compensation packages to employees to remain competitive which could negatively affect our profit margins.

If we cannot successfully recruit, retain and integrate highly skilled employees, we may not be able to execute our business strategy effectively.

If we fail to retain and recruit key management, sales and other skilled employees, our business and our ability to obtain new customers, develop new
products and provide acceptable levels of customer service could suffer. As we grow, we must invest significantly in building our sales, marketing and engineering groups. Competition for these people in the software industry is intense, and we may
not be able to successfully recruit, train or retain qualified personnel. We are competing against companies with greater financial resources and name recognition for these employees, and as such, there is no assurance that we will be able to meet
our hiring needs or hire the most qualified candidates. The success of our business is also heavily dependent on the leadership of our key management personnel, including Vivek Ranadivé, our Chairman and Chief Executive Officer. The loss of
one or more key employees could adversely affect our continued operations.

In addition, we must successfully integrate new employees into
our operations and generate sufficient revenues to justify the costs associated with these employees. If we fail to successfully integrate employees or to generate the revenue necessary to offset employee-related expenses, we may be forced to reduce
our headcount, which would force us to incur significant expenses and would harm our business and operating results.

The inability to upsell to our
current customers or the loss of any significant customer could harm our business and cause our stock price to decline.

We do not have
long-term sales contracts with any of our customers. Our customers may choose not to purchase our products or not to use our services in the future. As a result, a customer that generates substantial revenue for us in one period may not be a source
of revenue in subsequent periods. Any inability on our part to upsell to and generate revenues from our existing customers or the loss of a significant customer could adversely affect our business and operating results.



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Our products may infringe the intellectual property rights of others, which may cause us to incur unexpected costs or
prevent us from selling our products.

We cannot be certain that our products do not infringe issued patents or other intellectual
property rights of others. In addition, our use of open source software components in our products may make us vulnerable to claims that our products infringe third-party intellectual property rights, in particular because many of the open source
software components we may incorporate with our products may be developed by numerous independent parties over whom we exercise no supervision or control. Open source software is software that is covered by a license agreement which
permits the user to liberally copy, modify and distribute the software, typically free of charge. Further, because patent applications in the United States and many other countries are not publicly disclosed at the time of filing, applications
covering technology used in our software products may have been filed without our knowledge. We may be subject to legal proceedings and claims from time to time, including claims of alleged infringement of the patents, trademarks and other
intellectual property rights of third parties by us or our licensees in connection with their use of our products. Our software license agreements typically provide for indemnification of our customers for intellectual property infringement claims.
Intellectual property litigation is expensive and time consuming and could divert our managements attention away from running our business and seriously harm our business. If we were to discover that our products violated the intellectual
property rights of others, we would have to obtain licenses from these parties in order to continue marketing our products without substantial reengineering. We might not be able to obtain the necessary licenses on acceptable terms or at all, and if
we could not obtain such licenses, we might not be able to reengineer our products successfully or in a timely fashion. If we fail to address any infringement issues successfully, we would be forced to incur significant costs, including damages and
potentially satisfying indemnification obligations that we have with our customers, and we could be prevented from selling certain of our products.

Our
intellectual property or proprietary rights could be misappropriated, which could force us to become involved in expensive and time-consuming litigation.

We regard our intellectual property as critical to our success. Accordingly, we rely upon a combination of copyrights, service marks, trademarks, trade secret rights, patents, confidentiality agreements and licensing
agreements to protect our intellectual property. Despite these protections, a third party could misappropriate our intellectual property. Any misappropriation of our proprietary information by third parties could harm our business, financial
condition and operating results. In addition, the laws of some countries do not provide the same level of protection of our proprietary information as do the laws of the United States. If our proprietary information or material were misappropriated,
we might have to engage in litigation to protect it. We might not succeed in protecting our proprietary information if we initiate intellectual property litigation, and, in any event, such litigation would be expensive and time-consuming, could
divert our managements attention away from running our business and could seriously harm our business.

The use of open source software in our
products may expose us to additional risks.

Certain open source software is licensed pursuant to license agreements that require a user
who distributes the open source software as a component of the users software to disclose publicly part or all of the source code to the users software. This effectively renders what was previously proprietary software open source
software. As competition in our markets increases, we must strive to be cost-effective in our product development activities. Many features we may wish to add to our products in the future may be available as open source software and our development
team may wish to make use of this software to reduce development costs and speed up the development process. While we carefully monitor the use of all open source software and try to ensure that no open source software is used in such a way as to
require us to disclose the source code to the related product, such use could inadvertently occur. Additionally, if a third party has incorporated certain types of open source software into its software but has failed to disclose the presence of
such open source software and we embed that third party software into one or more of our products, we could, under certain circumstances, be required to disclose the source code to our product. This could have a material adverse effect on our
business.



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Market acceptance of new platforms, standards and technologies may require us to undergo the expense of developing and
maintaining compatible product lines.

Our software products can be licensed for use with a variety of platforms, standards and
technologies, and we are constantly evaluating the feasibility of adding new platforms, standards and technologies. There may be future or existing platforms, standards and technologies that achieve popularity in the marketplace which may not be
architecturally compatible with our software products. In addition, the effort and expense of developing, testing and maintaining software products will increase as more platforms, standards and technologies achieve market acceptance within our
target markets. If we are unable to achieve market acceptance of our software products or adapt to new platforms, standards and technologies, our sales and revenues will be adversely affected.

Developing and maintaining different software products could place a significant strain on our resources and software product release schedules, which
could harm our revenue and financial condition. If we are not able to develop software for accepted platforms, standards and technologies, our license and service revenues and our gross margins could be adversely affected. In addition, if the
platforms, standards and technologies we have developed software for are not accepted, our license and service revenues and our gross margins could be adversely affected.

We may have exposure to additional tax liabilities.

As a multinational corporation, we are subject
to income taxes as well as non-income based taxes, in both the United States and various foreign jurisdictions. Significant judgment is required in determining our global provision for income taxes and other tax liabilities. In the ordinary course
of a global business, there are many intercompany transactions and calculations where the ultimate tax determination is uncertain. We are regularly under audit by tax authorities.

Although we believe that our tax estimates are reasonable, we cannot assure you that the final determination of tax audits or tax disputes will not be
different from what is reflected in our historical income tax provisions and accruals.

We are also subject to non-income taxes, such as
payroll, sales, use, value-added, net worth, property and goods and services taxes, in both the United States and various foreign jurisdictions. We are regularly under audit by tax authorities with respect to these non-income taxes and may have
exposure to additional non-income tax liabilities.

We operate internationally and face risks attendant to those operations.

We earn a significant portion of our total revenues from international sales generated through our foreign direct and indirect operations. As a result of
these sales operations, we face risks arising from local political, legal and economic factors such as the general economic conditions in each country or region, varying regulatory requirements and compliance with international and local trade,
labor and other laws. We may also face difficulties in managing our international operations, collecting receivables in a timely fashion and repatriating earnings. Any of these factors, either individually or in combination, could materially impact
our international operations and adversely affect our business as a whole.

Our software may have defects and errors that could lead to a loss of
revenues or product liability claims.

Our products and platforms use complex technologies and, despite extensive testing and quality
control procedures, may contain defects or errors, especially when first introduced or when new versions or enhancements are released. If defects or errors are discovered after commercial release of either new versions or enhancements of our
products and platforms:



| |  |  | potential customers may delay purchases;
| | - |  | ----------------------------------------



| |  |  | customers may react negatively, which could reduce future sales;
| | - |  | ----------------------------------------------------------------



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| |  |  | our reputation in the marketplace may be damaged;
| | - |  | -------------------------------------------------



| |  |  | we may have to defend product liability claims;
| | - |  | -----------------------------------------------



| |  |  | we may be required to indemnify our customers, distributors, original equipment manufacturers or other resellers;
| | - |  | -----------------------------------------------------------------------------------------------------------------



| |  |  | we may incur additional service and warranty costs; and
| | - |  | -------------------------------------------------------



| |  |  | we may have to divert additional development resources to correct the defects and errors, which may result in the delay of new product releases or upgrades.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------

If any or all of the foregoing occur, we may lose revenues, incur higher operating expenses and lose market share, any
of which could severely harm our financial condition and operating results.

Any unauthorized, and potentially improper, actions of our personnel could
adversely affect our business, operating results and financial condition.

The recognition of our revenue depends on, among other
things, the terms negotiated in our contracts with our customers. Our personnel may act outside of their authority and negotiate additional terms without our knowledge. We have implemented policies to prevent and discourage such conduct, but there
can be no assurance that such policies will be followed. For instance, in the event that our sales personnel have negotiated terms that do not appear in the contract and of which we are unaware, whether the additional terms are written or verbal, we
could be prevented from recognizing revenue in accordance with our plans. Furthermore, depending on when we learn of unauthorized actions and the size of transactions involved, we may have to restate revenue for a previously reported period, which
would seriously harm our business, operating results and financial condition.

The outcome of litigation pending against us could require us to expend
significant resources and could harm our business and financial resources.

Note 12 to our Consolidated Financial Statements included in
this Annual Report on Form 10-K describes the litigation pending against us and our directors and officers. The uncertainty associated with substantial unresolved lawsuits could harm our business, financial condition and reputation. The defense of
the lawsuits could result in the diversion of our managements time and attention away from business operations, which could harm our business. Negative developments with respect to the lawsuits could cause our stock price to decline. In
addition, although we are unable to determine the amount, if any, that we may be required to pay in connection with the resolution of the lawsuits by settlement or otherwise, any such payment could seriously harm our financial condition and
liquidity.

Natural or other disasters could disrupt our business and result in loss of revenue or in higher expenses.

Natural disasters, terrorist activities and other business disruptions could seriously harm our revenue and financial condition and increase our costs and
expenses. Our corporate headquarters and many of our operations are located in California, a seismically active region. In addition, many of our current and potential customers are concentrated in a few geographic areas. A natural disaster in one of
these regions could have a material adverse impact on our U.S. and foreign operations, operating results and financial condition. Further, any unanticipated business disruption caused by Internet security threats, damage to global communication
networks or otherwise could have a material adverse impact on our operating results.

Any failure by us to meet the requirements of current or
newly-targeted customers may have a detrimental impact on our business or operating results.

We may wish to expand our customer base
into markets in which we have limited experience. In some cases, customers in different markets, such as financial services or government, have specific regulatory or other requirements which we must meet. For example, in order to maintain contracts
with the United States



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government, we must comply with specific rules and regulations relating to and that govern such contracts. Government contracts are generally subject to
audits and investigations which could result in various civil and criminal penalties and administrative sanctions, including termination of contracts, refund of a portion of fees received, forfeiture of profits, suspension of payments, fines and
suspensions or debarment from future government business. If we fail to meet such requirements in the future, we could be subject to civil or criminal liability or a reduction of revenue which could harm our business, operating results and financial
condition.

Reuters has a royalty free license to our products.

We license from Reuters the intellectual property that was incorporated into early versions of some of our software products. We do not own this licensed technology. Because Reuters has access to intellectual property
used in our products, it could use this intellectual property to compete with us. Reuters is not restricted from using the licensed technology it has licensed to us to produce products that compete with our products, and it can grant limited
licenses to the licensed technology to others who may compete with us. In addition, we must license to Reuters all of the products we own and the source code for one of our messaging products, through December 2012. This may place Reuters in a
position to more easily develop products that compete with ours.

Some provisions in our certificate of incorporation and bylaws, as well as a
stockholder rights plan, may have anti-takeover effects.

We have a stockholder rights plan providing for one right for each outstanding
share of our common stock. Each right, when exercisable, entitles the registered holder to purchase certain securities at a specified purchase price. The rights plan may have the anti-takeover effect of causing substantial dilution to a person or
group that attempts to acquire TIBCO on terms not approved by our Board of Directors. The existence of the rights plan could limit the price that certain investors might be willing to pay in the future for shares of our common stock and could
discourage, delay or prevent a merger or acquisition that stockholders may consider favorable. In addition, provisions of our current certificate of incorporation and bylaws, as well as Delaware corporate law, could make it more difficult for a
third party to acquire us without the support of our Board of Directors, even if doing so would be beneficial to our stockholders.



|ITEM 1B. | UNRESOLVED STAFF COMMENTS
|-------- | -------------------------

None.



|ITEM 2. | PROPERTIES
|------- | ----------

Our principal administrative, sales,
marketing, service and research and development facilities are located in a four building campus totaling approximately 292,000 square feet in Palo Alto, California, which we purchased in June 2003. In connection with the purchase, we entered into a
51-year lease of the land upon which the buildings are located. Further information on the terms of the building acquisition can be found in Managements Discussion and Analysis of Financial Condition and Results of Operation and
Note 6 to our Consolidated Financial Statements included in this Annual Report on Form 10-K.

In addition to our Palo Alto campus, we lease
field support offices in approximately 60 cities throughout the world. Lease terms range from month-to-month on certain offices to ten years on certain direct leases. We are continuously evaluating the adequacy of existing facilities and additional
facilities in new cities, and we believe that suitable additional space will be available in the future on commercially reasonable terms as needed.

We have certain facilities under lease that are in excess of our requirements that we no longer occupy and do not intend to occupy. Currently, the majority of these vacated facilities are occupied by our tenants; however, the subleases will
expire in various lengths. The estimated loss on excess facilities net of sublease income has been included in the accrued excess facilities costs on the Consolidated Balance Sheets as of November 30, 2008 and 2007.



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|ITEM 3. | LEGAL PROCEEDINGS
|------- | -----------------

See Note 12 to our Consolidated
Financial Statements included in this Annual Report on Form 10-K for information responsive to this item.



|ITEM 4. | SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
|------- | ---------------------------------------------------

No matters were submitted to a vote of security holders during the fourth quarter of fiscal year 2008.



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PART II



|ITEM 5. | MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
|------- | ------------------------------------------------------------------------------------------------------------

Market Information

Our common stock is quoted on the
NASDAQ Global Select Market (NASDAQ) under the symbol TIBX. The following table presents the high and low intra-day sale prices of our common stock on NASDAQ during the fiscal quarters indicated:



|                                       |  |      |       |     |   |     
|-------------------------------------- |  | ---- | ----- | --- | - | ----
|Fiscal Year 2008                       |  | High |       | Low
|First quarter ended February 2, 2008   |  | $    | 8.23  |     | $ | 6.50
|Second quarter ended June 1, 2008      |  | $    | 8.67  |     | $ | 6.76
|Third quarter ended August 31, 2008    |  | $    | 8.78  |     | $ | 6.89
|Fourth quarter ended November 30, 2008 |  | $    | 8.43  |     | $ | 3.45
|                                       |  |     
|Fiscal Year 2007                       |  |      |       |    
|First quarter ended March 4, 2007      |  | $    | 10.45 |     | $ | 8.61
|Second quarter ended June 3, 2007      |  | $    | 9.72  |     | $ | 8.18
|Third quarter ended September 2, 2007  |  | $    | 9.38  |     | $ | 6.97
|Fourth quarter ended November 30, 2007 |  | $    | 9.25  |     | $ | 6.72

Holders of Record

As of January 16, 2009, there were approximately 1,497 stockholders of record of our common stock.

Dividends

We have never declared or paid any cash dividends on our common stock, and we do not anticipate paying any cash dividends in the
foreseeable future.

Equity Compensation Plan Information

The following table sets forth information about our common stock that may be issued upon the exercise of options, warrants and rights under all of our existing equity compensation plans as of November 30, 2008.



|                                                              |  |                                                                                              |  |                                                                             |      |                                                                                                                                           |            |    
|------------------------------------------------------------- |  | -------------------------------------------------------------------------------------------- |  | --------------------------------------------------------------------------- | ---- | ----------------------------------------------------------------------------------------------------------------------------------------- | ---------- | ---
|Plan Category                                                 |  | Number of Securities to beIssued Upon Exercise ofOutstanding Options,Warrants, and
Rights(a) |  | Weighted-AverageExercise Price ofOutstanding Options,Warrants and Rights(b) |      | Number of SecuritiesRemaining Available forFuture Issuance
UnderEquity Compensation Plans(Excluding Securities Reflectedin Column (a))(c) |           
|Equity compensation plans approved by security holders        |  | 35,745,783                                                                                   |  | $                                                                           | 8.33 |                                                                                                                                           | 24,010,928 | (2)
|Equity compensation plans not approved by security holders(1) |  | 544,909                                                                                      |  | $                                                                           | 9.48 |                                                                                                                                           | 358,690    |    
|                                                              |  |                                                                                              |  |                                                                             |      |                                                                                                                                           |            |    
|Total                                                         |  | 36,290,692                                                                                   |  | $                                                                           | 8.34 |                                                                                                                                           | 24,369,618 |    
|                                                              |  |                                                                                              |  |                                                                             |      |                                                                                                                                           |            |    



|(1) | Represents options assumed in connection with our acquisitions.
|--- | ---------------------------------------------------------------

|(2) | This number includes 10.0 million shares available for future issuance under the 2008 Employee Stock Purchase Plan.
|--- | -------------------------------------------------------------------------------------------------------------------



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Performance Graph

The following graph compares the five-year cumulative total return to stockholders on our common stock for the period ending November 30, 2008, with the cumulative total return of the NASDAQ Composite Index and the S&P Information
Technology Index. The graph assumes that $100.00 was invested on November 30, 2003 in each of our common stock, the NASDAQ Composite Index and the S&P Information Technology Index, and that all dividends were reinvested. No cash dividends
have been declared or paid on our common stock. The comparisons in the table are required by the SEC and are not intended to forecast or be indicative of possible future performance of our common stock.

LOGO



|                                 |  |                    |        |      |   |        |  |      |        |      |   |        |  |   |        |  |   |      
|-------------------------------- |  | ------------------ | ------ | ---- | - | ------ |  | ---- | ------ | ---- | - | ------ |  | - | ------ |  | - | -----
|                                 |  | As of November 30,
|                                 |  | 2003               |        | 2004 |   | 2005   |  | 2006 |        | 2007 |   | 2008  
|TIBCO Software inc.              |  | $                  | 100.00 |      | $ | 196.58 |  | $    | 143.08 |      | $ | 159.15 |  | $ | 133.85 |  | $ | 82.74
|NASDAQ Composite Index           |  | $                  | 100.00 |      | $ | 109.02 |  | $    | 116.57 |      | $ | 129.92 |  | $ | 142.37 |  | $ | 80.42
|S&P Information Technology Index |  | $                  | 100.00 |      | $ | 102.36 |  | $    | 109.52 |      | $ | 116.82 |  | $ | 132.08 |  | $ | 74.92

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

In April 2007, our Board of Directors approved a stock repurchase program pursuant to which we could repurchase up to $300.0 million of our outstanding
common stock. In April 2008, our Board of Directors approved a new stock repurchase program pursuant to which we may repurchase up to $300.0 million of our outstanding common stock. In connection with approving the April 2008 stock repurchase
program, the April 2007 stock repurchase program was terminated and the remaining authorized amount of $69.6 million under the April 2007 stock repurchase program was canceled. The remaining authorized amount for stock repurchases under the April
2008 stock repurchase program was approximately $196.3 million as of the end of fiscal year 2008.



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The following table provides information about the repurchase of our common stock during the three months
ended November 30, 2008:



|                           |  |                                 |  |                             |      |                                                                              |           |                                                                                      |   |            
|-------------------------- |  | ------------------------------- |  | --------------------------- | ---- | ---------------------------------------------------------------------------- | --------- | ------------------------------------------------------------------------------------ | - | -----------
|                           |  | Total Number ofShares Purchased |  | Average PricePaid per Share |      | Total Number ofShares Purchasedas Part of PubliclyAnnounced Plans orPrograms |           | Approximate DollarValue of Shares thatMay Yet Be PurchasedUnder the Plansor Programs
|Period                     |  |                                 |  |                            
|September 1  September 30 |  | 501,144                         |  | $                           | 7.15 |                                                                              | 501,144   |                                                                                      | $ | 231,001,922
|October 1  October 31     |  | 4,808,575                       |  | $                           | 5.80 |                                                                              | 4,808,575 |                                                                                      | $ | 203,115,610
|November 1  November 30   |  | 1,592,000                       |  | $                           | 4.29 |                                                                              | 1,592,000 |                                                                                      | $ | 196,282,197
|                           |  |                                 |  |                             |      |                                                                              |           |                                                                                      |   |            
|Total                      |  | 6,901,719                       |  | $                           | 5.55 |                                                                              | 6,901,719 |                                                                                      |   |            
|                           |  |                                 |  |                             |      |                                                                              |           |                                                                                      |   |            



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|ITEM 6. | SELECTED FINANCIAL DATA
|------- | -----------------------

The selected
consolidated financial data below have been derived from our audited financial statements. The following table should be read in conjunction with Managements Discussion and Analysis of Financial Condition and Results of Operation
and our Consolidated Financial Statements and notes thereto included elsewhere in this Annual Report on Form 10-K. The historical results presented below are not indicative of any future results.

All amounts presented in the table below are stated in thousands, except for per share data.



|                                                     |  |                         |         |   |      |   |         |      |  |   |         |   |  |      |         |   |  |   |         |  
|---------------------------------------------------- |  | ----------------------- | ------- | - | ---- | - | ------- | ---- |  | - | ------- | - |  | ---- | ------- | - |  | - | ------- | -
|                                                     |  | Year Ended November 30, |        
|                                                     |  | 2008                    |         |   | 2007 |   |         | 2006 |  |   | 2005    |   |  | 2004 |        
|Selected Consolidated Statements of Operations Data: |  |                         |         |   |      |   |         |      |  |   |         |   |  |      |         |   |  |   |         |  
|Revenue:                                             |  |                         |         |   |      |   |         |      |  |   |         |   |  |      |         |   |  |   |         |  
|License revenue                                      |  | $                       | 273,415 |   |      | $ | 259,313 |      |  | $ | 240,071 |   |  | $    | 203,888 |   |  | $ | 214,086 |  
|Service and maintenance revenue                      |  |                         | 371,056 |   |      |   | 318,073 |      |  |   | 277,208 |   |  |      | 242,022 |   |  |   | 173,134 |  
|                                                     |  |                         |         |   |      |   |         |      |  |   |         |   |  |      |         |   |  |   |         |  
|Total revenue                                        |  |                         | 644,471 |   |      |   | 577,386 |      |  |   | 517,279 |   |  |      | 445,910 |   |  |   | 387,220 |  
|                                                     |  |                         |         |   |      |   |         |      |  |   |         |   |  |      |         |   |  |   |         |  
|Cost of revenue:                                     |  |                         |         |   |      |   |         |      |  |   |         |   |  |      |         |   |  |   |         |  
|License                                              |  |                         | 30,276  |   |      |   | 24,024  |      |  |   | 15,936  |   |  |      | 12,694  |   |  |   | 11,586  |  
|Service and maintenance                              |  |                         | 147,622 |   |      |   | 134,877 |      |  |   | 117,745 |   |  |      | 111,499 |   |  |   | 81,611  |  
|                                                     |  |                         |         |   |      |   |         |      |  |   |         |   |  |      |         |   |  |   |         |  
|Total cost of revenue                                |  |                         | 177,898 |   |      |   | 158,901 |      |  |   | 133,681 |   |  |      | 124,193 |   |  |   | 93,197  |  
|                                                     |  |                         |         |   |      |   |         |      |  |   |         |   |  |      |         |   |  |   |         |  
|Gross profit                                         |  |                         | 466,573 |   |      |   | 418,485 |      |  |   | 383,598 |   |  |      | 321,717 |   |  |   | 294,023 |  
|Operating expenses:                                  |  |                         |         |   |      |   |         |      |  |   |         |   |  |      |         |   |  |   |         |  
|Research and development                             |  |                         | 106,594 |   |      |   | 92,924  |      |  |   | 85,923  |   |  |      | 73,136  |   |  |   | 61,100  |  
|Sales and marketing                                  |  |                         | 224,641 |   |      |   | 197,397 |      |  |   | 172,768 |   |  |      | 140,370 |   |  |   | 123,486 |  
|General and administrative                           |  |                         | 53,046  |   |      |   | 51,538  |      |  |   | 44,139  |   |  |      | 37,320  |   |  |   | 29,048  |  
|Restructuring charges (adjustment)                   |  |                         |        |   |      |   | (1,095  | )    |  |   | (1,042  | ) |  |      | 3,905   |   |  |   | 2,186   |  
|Amortization of acquired intangible assets           |  |                         | 16,557  |   |      |   | 13,164  |      |  |   | 9,454   |   |  |      | 8,912   |   |  |   | 5,253   |  
|Acquired in-process research and development         |  |                         |        |   |      |   | 1,600   |      |  |   |        |   |  |      |        |   |  |   | 2,200   |  
|                                                     |  |                         |         |   |      |   |         |      |  |   |         |   |  |      |         |   |  |   |         |  
|Total operating expenses                             |  |                         | 400,838 |   |      |   | 355,528 |      |  |   | 311,242 |   |  |      | 263,643 |   |  |   | 223,273 |  
|                                                     |  |                         |         |   |      |   |         |      |  |   |         |   |  |      |         |   |  |   |         |  
|Income from operations                               |  |                         | 65,735  |   |      |   | 62,957  |      |  |   | 72,356  |   |  |      | 58,074  |   |  |   | 70,750  |  
|Interest and other income, net                       |  |                         | 8,333   |   |      |   | 17,266  |      |  |   | 21,373  |   |  |      | 11,718  |   |  |   | 5,736   |  
|Interest expense                                     |  |                         | (3,238  | ) |      |   | (2,824  | )    |  |   | (3,171  | ) |  |      | (2,711  | ) |  |   | (2,771  | )
|                                                     |  |                         |         |   |      |   |         |      |  |   |         |   |  |      |         |   |  |   |         |  
|Income before income taxes                           |  |                         | 70,830  |   |      |   | 77,399  |      |  |   | 90,558  |   |  |      | 67,081  |   |  |   | 73,715  |  
|Provision for (benefit from) income taxes            |  |                         | 18,314  |   |      |   | 25,401  |      |  |   | 17,694  |   |  |      | (5,474  | ) |  |   | 28,795  |  
|Minority interest, net of tax                        |  |                         | 105     |   |      |   | 110     |      |  |   |        |   |  |      |        |   |  |   |        |  
|                                                     |  |                         |         |   |      |   |         |      |  |   |         |   |  |      |         |   |  |   |         |  
|Net income                                           |  | $                       | 52,411  |   |      | $ | 51,888  |      |  | $ | 72,864  |   |  | $    | 72,555  |   |  | $ | 44,920  |  
|                                                     |  |                         |         |   |      |   |         |      |  |   |         |   |  |      |         |   |  |   |         |  
|Net income per share:                                |  |                         |         |   |      |   |         |      |  |   |         |   |  |      |         |   |  |   |         |  
|Basic                                                |  | $                       | 0.29    |   |      | $ | 0.26    |      |  | $ | 0.35    |   |  | $    | 0.34    |   |  | $ | 0.22    |  
|Diluted                                              |  | $                       | 0.29    |   |      | $ | 0.25    |      |  | $ | 0.33    |   |  | $    | 0.32    |   |  | $ | 0.20    |  
|Shares used in computing net income per share:       |  |                         |         |   |      |   |         |      |  |   |         |   |  |      |         |   |  |   |         |  
|Basic                                                |  |                         | 180,525 |   |      |   | 198,885 |      |  |   | 209,538 |   |  |      | 213,263 |   |  |   | 207,506 |  
|Diluted                                              |  |                         | 183,742 |   |      |   | 205,316 |      |  |   | 218,075 |   |  |      | 223,977 |   |  |   | 220,927 |  



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|                                                  |  |                    |           |      |   |           |  |      |           |      |   |           |  |   |          
|------------------------------------------------- |  | ------------------ | --------- | ---- | - | --------- |  | ---- | --------- | ---- | - | --------- |  | - | ---------
|                                                  |  | As of November 30,
|                                                  |  | 2008               |           | 2007 |   | 2006      |  | 2005 |           | 2004
|Selected Consolidated Balance Sheet Data:         |  |                    |           |      |   |           |  |      |           |      |   |           |  |   |          
|Cash, cash equivalents and short-term investments |  | $                  | 267,473   |      | $ | 265,771   |  | $    | 539,570   |      | $ | 477,638   |  | $ | 473,535  
|Working capital                                   |  |                    | 195,822   |      |   | 238,894   |  |      | 529,000   |      |   | 458,685   |  |   | 439,090  
|Total assets                                      |  |                    | 1,088,568 |      |   | 1,198,459 |  |      | 1,226,359 |      |   | 1,122,424 |  |   | 1,082,811
|Long-term debt                                    |  |                    | 44,558    |      |   | 46,482    |  |      | 48,345    |      |   | 50,143    |  |   | 51,851   
|Total stockholders equity                        |  |                    | 741,643   |      |   | 855,396   |  |      | 946,007   |      |   | 873,619   |  |   | 820,482  



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|ITEM 7. | MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|------- | -------------------------------------------------------------------------------------

The following contains forward- looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange
Act. Forward-looking statements relate to expectations concerning matters that are not historical facts. Words such as projects, believes, anticipates, plans, expects, intends,
strategy, continue, will, estimate, forecast and similar words and expressions are intended to identify forward-looking statements. Although we believe that the expectations reflected in
the forward-looking statements contained herein are reasonable, these expectations or any of the forward-looking statements could prove to be incorrect, and actual results could differ materially from those projected or assumed in the forward-
looking statements. Our future financial condition and results of operations, as well as any forward-looking statements, are subject to risks and uncertainties, including, but not limited, to the factors set forth under Item 1A. Risk
Factors. All forward-looking statements and reasons why results may differ included in this Annual Report on Form 10-K are made as of the date hereof, and we assume no obligation to update any such forward-looking statements or reasons why
actual results may differ.

Executive Overview

Our products are currently licensed by companies worldwide in diverse industries such as financial services, telecommunications, retail, healthcare, manufacturing, energy, transportation, logistics, government and
insurance. We sell our products through a direct sales force and through alliances with leading software vendors and system integrators.

Our revenue consists primarily of license and maintenance fees from our customers and distributors. In addition, we receive fees from our customers for providing consulting services. We also receive revenue from our strategic relationships
with business partners who embed our products in their hardware and networking systems as well as from systems integrators who resell our products.

First-year maintenance typically is sold with the related software license and renewed on an annual basis thereafter. Maintenance revenue is determined based on vendor-specific objective evidence (VSOE) of fair value and
amortized over the term of the maintenance contract, typically twelve months. Consulting and training revenues are typically recognized as the services are performed, usually on a time and materials basis. Such services primarily consist of
implementation services related to the installation of our products and generally do not include significant customization, or development of, the underlying software code.

Our revenue is generally derived from a diverse customer base. No single customer represented greater than 10% of total revenue in fiscal years 2008,
2007 or 2006. As of November 30, 2008 and 2007, no single customer had a balance in excess of 10% of our net accounts receivable. We establish allowances for doubtful accounts based on our evaluation of collectability and an allowance for
returns and discounts based on specifically identified credits and historical experience.

For the fiscal year ended November 30, 2008, we
recorded total revenue of $644 million, an increase of 12% over fiscal 2007. License revenue was $273 million, 5% higher than the previous year. In addition, we generated cash flow from operations of $152 million, for an increase of 49%
year-over-year. GAAP earnings per share were $0.29 in fiscal year 2008 as compared to $0.25 for the fiscal year 2007. We ended the year with $267 million in cash, cash equivalents and short term investments, while also having repurchased
approximately $149 million of our common stock during the year.

Critical Accounting Policies, Judgments and Estimates

The discussion and analysis of our financial condition and results of operations are based upon our Consolidated Financial Statements, which have been
prepared in accordance with generally accepted accounting principles in the United States of America. The preparation of these financial statements requires us to make estimates, assumptions and judgments that can have a significant impact on the
reported amounts of assets and



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liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities at the date of our financial statements. We base our
estimates, assumptions and judgments on historical experience and various other factors that we believe to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions. On a regular
basis we evaluate our estimates, assumptions and judgments and make changes accordingly. We also discuss our critical accounting estimates with the Audit Committee of our Board of Directors. We believe that the estimates, assumptions and judgments
involved in revenue recognition, allowances for doubtful accounts, returns and discounts, stock-based compensation, valuation and impairment of investments, impairment of goodwill, intangible assets and long-lived assets, restructuring and
integration costs and accounting for income taxes have the greatest potential impact on our Consolidated Financial Statements, so we consider these to be our critical accounting policies.

We discuss below the critical accounting estimates associated with these policies. Historically, our estimates, assumptions and judgments relative to our
critical accounting policies have not differed materially from actual results. For further information on our significant accounting policies, see the discussion in Note 2 to our Consolidated Financial Statements included in this Annual Report on
Form 10-K.

Revenue Recognition.    We recognize license revenue when a signed contract or other persuasive
evidence of an arrangement exists, the software has been shipped or electronically delivered, the license fee is fixed or determinable, and collection of the resulting receivable is probable. When contracts contain multiple elements wherein VSOE of
fair value exists for all undelivered elements, we account for the delivered elements in accordance with the Residual Method prescribed by the American Institute of Certified Public Accountants (AICPA) Statement of Position
(SOP) No. 98-9. We recognize revenue on shipments to resellers when evidence of an end-user arrangement exists. We record revenue net of related costs to the resellers. Provided all other revenue criteria are met, the up front,
minimum, non-refundable license fees from OEM customers are generally recognized upon delivery and on-going royalty fees are generally recognized upon reporting of units shipped.

We assess whether the fee is fixed or determinable, and collection is probable, at the time of the transaction. In determining whether the fee is fixed
or determinable, we compare the payment terms of the transaction to our standard payment terms. If a significant portion of the fee is considered extended payment terms, we account for the fee as not being fixed or determinable and recognize revenue
as the payments become due. We assess whether collection is probable based on a number of factors, including the customers past transaction history and credit-worthiness. Generally, we do not request collateral from our customers. If we
determine that collection of a fee is not probable, we defer the fee and recognize revenue at the time collection becomes probable, which is generally upon receipt of cash.

First-year maintenance typically is sold with the related software license and renewed on an annual basis thereafter. For such arrangements with multiple
elements, we allocate revenue to each element of the arrangement based on the Residual Method. In general, maintenance and support obligations are based on separately stated renewal rates in the arrangement that are deemed substantive and therefore
represent VSOE of fair value. Maintenance revenue is deferred and recognized ratably over the term of the maintenance and support period. For term licenses, we recognize the entire arrangement fee ratably over the license term when the renewal rate
or period is not substantive compared to the term license.

Many customers who license our software also enter into separate professional
services and training arrangements with us. In determining whether professional services revenue should be accounted for separately from license revenue, we evaluate (among other factors): the nature of our software products; whether they are ready
for use by the customer upon receipt; the nature of our implementation services (which typically do not involve significant customization to or development of the underlying software code); the availability of services from other vendors; whether
the timing of payments for license revenue is coincident with performance of services and whether milestones; acceptance criteria exist that affect the realizability of the software license fee. Substantially all of our professional services
arrangements are billed on a time and materials basis, and, accordingly, are recognized as the services are performed. Contracts with fixed or not-to-exceed fees are



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recognized on a percentage-of-completion basis. If there is significant uncertainty about the project completion or receipt of payment for professional
services, revenue is deferred until the uncertainty is sufficiently resolved. We recognize training revenue as training services are delivered. VSOE of fair value of services, for consulting or training, is based upon standalone sales of these
services.

For license and professional service arrangements that do not qualify for separate accounting, such as arrangements that involve
significant modification or customization of the software, arrangements that include milestones or customer specific acceptance criteria, or where payment for the software license is tied to the performance of professional services, software license
revenue is generally recognized together with the professional services revenue using either the percentage-of-completion or completed-contract method. Under the percentage-of-completion method, the revenue recognized is equal to the ratio of costs
expended to date to the anticipated total contract costs, based on current estimates of costs to complete the project. If the total estimated costs to complete a project exceed the total contract amount, indicating a loss, the entire anticipated
loss would be recognized in the current period.

Significant management judgments and estimates must be made in connection with
determination of the revenue to be recognized in any accounting period. If we made different judgments or utilized different estimates for any period, material differences in the amount and timing of revenue recognized could result.

Allowances for Doubtful Accounts, Returns and Discounts.    We establish allowances for doubtful accounts, returns and
discounts based on our review of credit profiles of our customers, contractual terms and conditions, current economic trends and historical payment, return and discount experience. We reassess the allowances for doubtful accounts, returns and
discounts each period. Historically, our actual losses and credits have been consistent with these provisions. However, unexpected events or significant future changes in trends could result in a material impact to our future statements of
operations and of cash flows. If we made different judgments or utilized different estimates for any period, material differences in the amount and timing of revenue or bad debt expense recognized could result. Our allowances for doubtful accounts,
returns and discounts as a percentage of net revenues were approximately 1% in fiscal years 2008, 2007 and 2006. See Note 5 to our Consolidated Financial Statements included in this Annual Report on Form 10-K for a summary of activities during the
years reported.

Stock-Based Compensation.    We account for stock-based compensation related to stock-based
transactions in accordance with the provisions of Statement of Financial Accounting Standards (SFAS) No. 123 (revised 2004), Share-Based Payment, (SFAS No. 123(R)). Under the fair value recognition provisions
of SFAS No. 123(R), stock-based payment expense is estimated at the grant date based on the fair value of the award and is recognized as expense ratably over the requisite service period of the award. Determining the appropriate fair value
model and calculating the fair value of stock-based awards requires judgment, including estimating stock price volatility, forfeiture rates and expected life.

Upon adoption of SFAS No. 123(R) on December 1, 2005, we selected the Black-Scholes option pricing model as the most appropriate method for determining the estimated fair value for stock-based awards. The
Black-Scholes model requires the use of highly subjective and complex assumptions which determine the fair value of stock-based awards, including the options expected term and the price volatility of the underlying stock. Our current estimate
of volatility is based on a blend of average historical and market-based implied volatilities of our stock price. To the extent volatility of our stock price increases in the future, our estimates of the fair value of options granted in the future
could increase, thereby increasing stock-based payment expense in future periods. In addition, we apply an expected forfeiture rate when amortizing stock-based payment expense. Our estimate of the forfeiture rate is based primarily upon our
historical experience. To the extent we revise this estimate in the future, our stock-based payment expense could be materially impacted in the quarter of revision, as well as in following quarters. We derived the expected term assumption based on
our historical settlement experience, while giving consideration to options that have life cycles less than the contractual terms and vesting schedules in accordance with guidance in SFAS No. 123(R) and Staff Accounting Bulletin
(SAB) No. 107. In



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the future, as empirical evidence regarding these input estimates is available to provide more directionally predictive results, we may change or refine our
approach of deriving these input estimates. These changes could impact our fair value of stock options granted in the future. See Note 2 and Note 14 to our Consolidated Financial Statements included in this Annual Report on Form 10-K for further
details.

Valuation and Impairment of Investments.    We determine the appropriate classification of marketable
securities at the time of purchase and evaluate such designation as of each balance sheet date. As of November 30, 2008, all our marketable securities have been classified as available-for-sale and are carried at fair value with unrealized
gains and losses, if any, included as a component of Accumulated Other Comprehensive Income in stockholders equity. Marketable securities are presented as current assets as they are subject to use within one year in current
operations. Realized gains and losses are recognized based on the specific identification method. As of November 30, 2008, gross unrealized gains on our investment portfolio totaled $26,000. The change in value of these investments
is primarily related to changes in interest rates and credit ratings of the issuers and is considered temporary in nature.

We have an
investment in a venture capital fund which invests in privately held companies. This investment is carried at cost basis and is included in Other Assets on the Balance Sheets. The fair value of the funds investments is dependent on the
performance of the companies in which the fund is invested, as well as the volatility inherent in external markets for these companies. In assessing potential impairment, we consider these factors as well as each of the companies cash
position, earnings/revenue outlook, liquidity and management/ownership. If we believe that an other-than-temporary decline exists, we would record the related write-down as a loss on investments in our Consolidated Statements of Operations. The
carrying value of our minority equity investments was $0.8 million and $0.9 million as of November 30, 2008 and 2007, respectively. During fiscal year 2006, we sold one of our private equity investments and realized a net gain of $0.7 million.
No impairment losses associated with our minority equity investment were incurred in the periods presented.

Significant management
judgment is required in determining whether an other-than-temporary decline in the value of our investments exists. Estimating the fair value of a venture capital fund which invests in non-marketable equity in early-stage technology companies is
inherently subjective. Changes in our assessment of the valuation of our investments could materially impact our operating results and financial position in future periods if anticipated events and key assumptions do not materialize or change.

Impairment of Goodwill, Intangible Assets and Long-Lived Assets.Our goodwill and intangible assets result
from our corporate acquisition transactions. In accordance with SFAS No. 142, Goodwill and Other Intangible Assets, which we adopted on December 1, 2002, goodwill and intangible assets with indefinite useful lives are no longer
amortized, but are instead tested for impairment at least annually or as circumstances indicate their value may no longer be recoverable. We do not carry any intangible assets with indefinite useful lives other than goodwill. We generally perform
our annual impairment test at the end of the fiscal year. As we operate our business in one reporting segment, our goodwill is tested for impairment at the enterprise level. Goodwill impairment testing is a two-step process. For the first step, we
screen for impairment, and if any possible impairment exists, we undertake a second step of measuring such impairment. We periodically re-evaluate our business and have determined that we continue to operate in one segment, which we consider our
sole reporting unit. If our assumptions change in the future, we may be required to record impairment charges to reduce the carrying value of our goodwill. Changes in the valuation of goodwill could materially impact our operating results and
financial position.

We evaluate the recoverability of our long-lived assets including amortizable intangible and tangible assets in
accordance with SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets. When events or changes in circumstances indicate that the carrying amount of long-lived assets may not be recoverable, we recognize such
impairment in the event the net book value of such assets exceeds the future undiscounted cash flows attributable to such assets. Our acquired intangible assets with definite useful lives are amortized on a straight line basis over their useful
lives, and periodically tested for impairment. We have not recorded any impairment losses to date. As of November 30, 2008, we had $343.9 million of goodwill, $103.5 million of



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property and equipment and $80.4 million of acquired intangible assets. If our estimates or the related assumptions change in the future, we may be required
to record impairment charges to reduce the carrying value of these assets. Changes in the valuation of long-lived assets could materially impact our operating results and financial position.

Restructuring and Integration Costs.    Our restructuring charges are comprised primarily of costs related to properties
abandoned in connection with facilities consolidation, related write-downs of leasehold improvements and severance and associated employee termination costs related to headcount reductions. For restructuring actions initiated prior to
December 31, 2002, we followed the guidance provided by Emerging Issues Task Force (EITF) Issue No. 94-3, Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity. We recorded
the liability related to these termination costs when the plan was approved; the termination benefits were determined and communicated to the employees; the number of employees to be terminated, their locations and job were specifically identified;
and the period of time to implement the plan was set. For restructuring actions initiated after January 1, 2003, we adopted SFAS No. 146, Accounting for Costs Associated with Exit or Disposal Activities, which requires that a
liability for costs associated with an exit or disposal activity be recognized and measured initially at fair value only when the liability is incurred.

Our restructuring charges included accruals for estimated losses on excess facility costs based on our contractual obligations net of estimated sublease income based on current comparable market rates for leases. We
reassess this liability periodically based on market conditions. Revisions to our estimates of this liability could materially impact our operating results and financial position in future periods if anticipated events and key assumptions, such as
the timing and amounts of sublease rental income, either do not materialize or change.

Accounting for Income
Taxes.    We make certain estimates and judgments in determining income tax expense for financial statement purposes. These estimates and judgments occur in the calculation of certain tax assets and liabilities, which arise
from differences in the timing of recognition of revenue and expense for tax and financial statement purposes.

As part of the process of
preparing our Consolidated Financial Statements, we are required to estimate our income taxes in each of the jurisdictions in which we operate. This process involves us estimating our current tax exposure under the most recent tax laws and assessing
temporary differences resulting from differing treatment of items for tax and accounting purposes. These differences result in deferred tax assets and liabilities, which are included in our Consolidated Balance Sheets.

We assess the likelihood that we will be able to recover our deferred tax assets. We consider all available evidence, both positive and negative,
including historical levels of income, expectations and risks associated with estimates of future taxable income and ongoing prudent and feasible tax planning strategies in assessing the need for a valuation allowance. If it is not more likely than
not that we will recover our deferred tax assets, we will increase our provision for taxes by recording a valuation allowance against the deferred tax assets that we estimate will not ultimately be recoverable. The available positive evidence at
November 30, 2008 included historical operating profits and a projection of future income sufficient to realize most of our remaining deferred tax assets. We recorded a valuation allowance release of $1.2 million in fiscal year 2008
related to the utilization of capital loss and foreign tax credit carryovers. As of November 30, 2008, it was considered more likely than not that our deferred tax assets would be realized with the exception of certain capital loss and foreign
tax credit carryovers as we cannot forecast sufficient future capital gains or foreign source income to realize these deferred tax assets. The remaining valuation allowance of approximately $7.9 million as of November 30, 2008 will result in an
income tax benefit if and when we conclude it is more likely than not that the related deferred tax assets will be realized.

As of
November 30, 2008, we believed that the amount of deferred tax assets recorded on our balance sheet would ultimately be recovered. However, should there be a change in our ability to recover our deferred tax assets, our tax provision would
increase in the period in which we determine that it is more likely than not that



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we cannot recover our deferred tax assets. If we have to re-establish a full valuation allowance against our deferred tax assets, it would result in an
increase of $38.6 million to income tax expense.

U.S. income taxes and foreign withholding taxes have not been provided on a cumulative
total of $38.9 million of undistributed earnings for certain non-U.S. subsidiaries. With the exception of our subsidiaries in the United Kingdom, net undistributed earnings of our foreign subsidiaries are generally considered to be indefinitely
reinvested, and accordingly, no provision for U.S. income taxes has been provided thereon. Upon distribution of these earnings in the form of dividends or otherwise, we will be subject to U.S. income taxes net of available foreign tax credits
associated with these earnings.

While we have not experienced and do not expect any impact to the effective tax rate for U.S.
non-qualified stock option or restricted stock expense due to the adoption of SFAS No. 123(R), the effective tax rate has been and may be negatively impacted by foreign stock option expense that may not be deductible in the foreign
jurisdictions. Also, SFAS No. 123(R) requires that the tax benefit of stock option deductions relating to incentive stock options be recorded in the period of disqualifying disposition. This could result in significant fluctuations in our
effective tax rate between accounting periods.

See Note 17 to our Consolidated Financial Statements included in this Annual Report on Form
10-K.

Results of Operations

The
following table presents certain Consolidated Statements of Operations data as percentages of total revenue for the periods indicated:



|                                             |  |                         |   |  |      |   |  |      |  
|-------------------------------------------- |  | ----------------------- | - |  | ---- | - |  | ---- | -
|                                             |  | Year Ended November 30, |  
|                                             |  | 2008                    |   |  | 2007 |   |  | 2006 |  
|Revenue:                                     |  |                         |   |  |      |   |  |      |  
|License revenue                              |  | 42                      | % |  | 45   | % |  | 46   | %
|Service and maintenance revenue              |  | 58                      |   |  | 55   |   |  | 54   |  
|                                             |  |                         |   |  |      |   |  |      |  
|Total revenue                                |  | 100                     |   |  | 100  |   |  | 100  |  
|                                             |  |                         |   |  |      |   |  |      |  
|Cost of revenue:                             |  |                         |   |  |      |   |  |      |  
|License                                      |  | 5                       |   |  | 4    |   |  | 3    |  
|Service and maintenance                      |  | 23                      |   |  | 24   |   |  | 23   |  
|                                             |  |                         |   |  |      |   |  |      |  
|Total cost of revenue                        |  | 28                      |   |  | 28   |   |  | 26   |  
|                                             |  |                         |   |  |      |   |  |      |  
|Gross profit                                 |  | 72                      |   |  | 72   |   |  | 74   |  
|                                             |  |                         |   |  |      |   |  |      |  
|Operating expenses:                          |  |                         |   |  |      |   |  |      |  
|Research and development                     |  | 17                      |   |  | 16   |   |  | 17   |  
|Sales and marketing                          |  | 35                      |   |  | 34   |   |  | 32   |  
|General and administrative                   |  | 8                       |   |  | 9    |   |  | 9    |  
|Restructuring adjustment                     |  |                        |   |  |     |   |  |     |  
|Amortization of acquired intangible assets   |  | 2                       |   |  | 2    |   |  | 2    |  
|Acquired in-process research and development |  |                        |   |  |     |   |  |     |  
|                                             |  |                         |   |  |      |   |  |      |  
|Total operating expenses                     |  | 62                      |   |  | 61   |   |  | 60   |  
|                                             |  |                         |   |  |      |   |  |      |  
|Income from operations                       |  | 10                      |   |  | 11   |   |  | 14   |  
|Interest income                              |  | 1                       |   |  | 3    |   |  | 4    |  
|Interest expense                             |  |                        |   |  | (1   | ) |  | (1   | )
|Other income (expense), net                  |  |                        |   |  |     |   |  |     |  
|                                             |  |                         |   |  |      |   |  |      |  
|Income before provision for income taxes     |  | 11                      |   |  | 13   |   |  | 17   |  
|Provision for income taxes                   |  | 3                       |   |  | 4    |   |  | 3    |  
|                                             |  |                         |   |  |      |   |  |      |  
|Net income                                   |  | 8                       | % |  | 9    | % |  | 14   | %
|                                             |  |                         |   |  |      |   |  |      |  



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In September 2008, we acquired Insightful Corporation (Insightful), a provider of statistical
data analysis and data mining solutions software. In June 2007, we acquired Spotfire Holdings, Inc. (Spotfire), a leading provider of next-generation business intelligence software. Insightful and Spotfire are now part of our business
optimization product line. Our Consolidated Results of Operations have included incremental revenue and costs related to the Insightful and Spotfire operations since the date of acquisition. In connection with these acquisitions, we have incurred
additional expenses, including amortization of intangible assets and acquired technology; stock-based compensation; personnel and related costs; facility and infrastructure costs; and other charges.

All amounts presented in the tables in the Results of Operations are stated in thousands of dollars, except percentages and unless otherwise stated.

Total Revenue

Our
total revenue consisted primarily of license, service and maintenance fees from our customers and partners.



|              |  |                         |         |                   |   |         |  |             |         |  |             |   |  |    |  
|------------- |  | ----------------------- | ------- | ----------------- | - | ------- |  | ----------- | ------- |  | ----------- | - |  | -- | -
|              |  | Year Ended November 30, |         | Percentage Change |  
|              |  | 2008                    |         | 2007              |   | 2006    |  | 2007to 2008 |         |  | 2006to 2007 |  
|Total revenue |  | $                       | 644,471 |                   | $ | 577,386 |  | $           | 517,279 |  | 12          | % |  | 12 | %

Total revenue in fiscal year 2008 compared to fiscal year 2007 increased by $67.1 million or 12%.
The increase was primarily due to a $14.1 million or 5% increase in license revenue and a $53.0 million or 17% increase in service and maintenance revenue. Geographically, we experienced double-digit growth in total revenue from the Americas and
EMEA in fiscal year 2008. Our total revenue increased by $42.3 million or 15% in the Americas and $26.7 million or 11% in EMEA, which were partially offset by a $1.9 million or 3% decrease in APJ in fiscal year 2008. See Note 21 to our Consolidated
Financial Statements included in this Annual Report on Form 10-K for further details on total revenue by region.

We had no single customer
that accounted for more than 10% of total revenue in fiscal years 2008, 2007 or 2006. Our products are licensed by companies worldwide in diverse industries, and a high percentage of our revenue is from the financial services, telecommunications,
life sciences, government, and energy sectors.

Total revenue in fiscal year 2007 compared to fiscal year 2006 increased by $60.1 million
or 12%. The increase was primarily due to a $19.2 million or 8% increase in license revenue and a $40.9 million or 15% increase in service and maintenance revenue. Geographically, our total revenue increased by $14.4 million or 5% in the Americas,
$41.1 million or 21% in EMEA and $4.6 million or 7% in APJ in fiscal year 2007.

License Revenue and Costs



|                              |  |                         |         |   |                   |   |         |      |  |   |             |   |  |             |   |  |    |  
|----------------------------- |  | ----------------------- | ------- | - | ----------------- | - | ------- | ---- |  | - | ----------- | - |  | ----------- | - |  | -- | -
|                              |  | Year Ended November 30, |         |   | Percentage Change |  
|                              |  | 2008                    |         |   | 2007              |   |         | 2006 |  |   | 2007to 2008 |   |  | 2006to 2007 |  
|License revenue               |  | $                       | 273,415 |   |                   | $ | 259,313 |      |  | $ | 240,071     |   |  | 5           | % |  | 8  | %
|Percentage of total revenue   |  |                         | 42      | % |                   |   | 45      | %    |  |   | 46          | % |  |             |   |  |    |  
|Cost of license revenue       |  | $                       | 30,276  |   |                   | $ | 24,024  |      |  | $ | 15,936      |   |  | 26          | % |  | 51 | %
|Percentage of total revenue   |  |                         | 5       | % |                   |   | 4       | %    |  |   | 3           | % |  |             |   |  |    |  
|Percentage of license revenue |  |                         | 11      | % |                   |   | 9       | %    |  |   | 7           | % |  |             |   |  |    |  

We license a wide range of products to customers in various industries and geographic regions.
License revenue increased by $14.1 million or 5% in fiscal year 2008 compared to fiscal year 2007, primarily due to an increase in revenue from life sciences, government and manufacturing sectors. The increase was partially offset



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##### Table of Contents

by a decrease in revenue from the financial services sector. License revenue increased by $19.2 million or 8% in fiscal year 2007 compared to fiscal year
2006, primarily due to an increase in revenue from the financial services, life sciences, and retail sectors. The increase was partially offset by a decrease in revenue from the government sector.

Our license revenue in fiscal years 2008, 2007 and 2006 was derived from the following three product lines: SOA, business optimization and BPM. The
increases in the percentage of license revenue derived from business optimization in fiscal years 2008 and 2007 were primarily attributable to the Spotfire acquisition.



|                      |  |                         |   |  |      |   |  |      |  
|--------------------- |  | ----------------------- | - |  | ---- | - |  | ---- | -
|                      |  | Year Ended November 30, |  
|                      |  | 2008                    |   |  | 2007 |   |  | 2006 |  
|SOA                   |  | 56                      | % |  | 65   | % |  | 71   | %
|Business optimization |  | 32                      |   |  | 19   |   |  | 11   |  
|BPM                   |  | 12                      |   |  | 16   |   |  | 18   |  

Our license revenue in a particular period is dependent upon the timing and number of license
deals and their relative size. Selected data about our license revenue deals recognized for the respective periods is summarized as follows:



|                                                              |  |                         |     |      |   |      |  |   |    
|------------------------------------------------------------- |  | ----------------------- | --- | ---- | - | ---- |  | - | ---
|                                                              |  | Year Ended November 30,
|                                                              |  | 2008                    |     | 2007 |   | 2006
|Number of license deals of $1.0 million or more               |  |                         | 55  |      |   | 54   |  |   | 59 
|Number of license deals over $0.1 million                     |  |                         | 414 |      |   | 376  |  |   | 334
|Average size of license deals over $0.1 million (in millions) |  | $                       | 0.6 |      | $ | 0.6  |  | $ | 0.7

Cost of license revenue mainly consisted of royalty costs and amortization of developed
technologies acquired through corporate acquisitions. Cost of license revenue increased by $6.3 million or 26% in fiscal year 2008 compared to fiscal year 2007, and increased by $8.1 million or 51% in fiscal year 2007 compared to fiscal year 2006.
The increase in fiscal year 2008 was primarily due to a $5.4 million increase in amortization of acquired technologies, mainly associated with the Spotfire acquisition, and a $1.0 million increase in royalty costs. The increase in fiscal year 2007
was primarily due to a $5.0 million increase in amortization of acquired technologies, mainly associated with the Spotfire acquisition, and a $2.7 million increase in royalty costs.

Service and Maintenance Revenue and Costs



|                                              |  |                         |         |   |                   |   |         |      |  |   |             |   |  |             |   |  |    |  
|--------------------------------------------- |  | ----------------------- | ------- | - | ----------------- | - | ------- | ---- |  | - | ----------- | - |  | ----------- | - |  | -- | -
|                                              |  | Year Ended November 30, |         |   | Percentage Change |  
|                                              |  | 2008                    |         |   | 2007              |   |         | 2006 |  |   | 2007to 2008 |   |  | 2006to 2007 |  
|Service and maintenance revenue               |  | $                       | 371,056 |   |                   | $ | 318,073 |      |  | $ | 277,208     |   |  | 17          | % |  | 15 | %
|Percentage of total revenue                   |  |                         | 58      | % |                   |   | 55      | %    |  |   | 54          | % |  |             |   |  |    |  
|Cost of service and maintenance revenue       |  | $                       | 147,622 |   |                   | $ | 134,877 |      |  | $ | 117,745     |   |  | 9           | % |  | 15 | %
|Percentage of total revenue                   |  |                         | 23      | % |                   |   | 24      | %    |  |   | 23          | % |  |             |   |  |    |  
|Percentage of service and maintenance revenue |  |                         | 40      | % |                   |   | 42      | %    |  |   | 42          | % |  |             |   |  |    |  

Service and maintenance revenue increased $53.0 million or 17% in fiscal year 2008 compared to
fiscal year 2007, and increased $40.9 million or 15% in fiscal year 2007 compared to fiscal year 2006. The increase in fiscal year 2008 was the result of a $14.5 million increase in consulting and training services revenue and a $38.5 million
increase in maintenance revenue. The increase in fiscal year 2007 was due to a $13.1 million increase in consulting and training services revenue and a $27.8 million increase in maintenance revenue. Consulting revenue increased due to an increase in
both the number and breadth of engagements, reflecting our increased focus on providing more services to customers. Maintenance revenue increased primarily due to continued growth in our installed software base and to the Spotfire acquisition.



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Cost of service and maintenance revenue consisted primarily of compensation and other related expenses
for consultants, customer support personnel and third-party contractors associated with providing consulting services and stock-based compensation expense. The cost of service and maintenance revenue decreased as a percentage of total revenue in
fiscal year 2008 compared to fiscal year 2007, as a result of efforts to increase utilization of our consulting staff as well as an increase in the relative proportion of maintenance revenue. The cost of service and maintenance revenue as a
percentage of total revenue increased in fiscal year 2007 compared to fiscal year 2006, as the relative proportion of consulting revenue increased. The $12.7 million or 9% increase in fiscal year 2008 compared to fiscal year 2007 resulted primarily
from an increase of $8.7 million in employee-related expenses, an increase of $2.2 million in subcontractors costs, an increase of $1.2 million in travel expenses and an increase of $0.7 million in facilities expenses. This increase was partially
offset by a $0.3 million decrease in information technology-related expenses. The $17.1 million or 15% increase in fiscal year 2007 compared to fiscal year 2006 resulted primarily from an increase of $11.0 million in employee-related expenses, an
increase of $3.7 million in subcontractors costs, an increase of $1.1 million in information technology-related expenses and an increase of $1.0 million in facilities expenses. Increased employee-related expenses were primarily due to an increase in
professional services and customer support staff during fiscal years 2008, 2007 and 2006. Increased subcontractors costs were also directly related to increased service revenue in fiscal years 2008 and 2007.

Research and Development Expenses

Research and development expenses consisted primarily of employee-related expenses, including salary, bonus, benefits, stock-based compensation expenses, recruiting expense and office support, third-party contractor fees and related costs
associated with the development and enhancement of our products.



|                                  |  |                         |         |   |                   |   |        |      |  |   |             |   |  |             |   |  |   |  
|--------------------------------- |  | ----------------------- | ------- | - | ----------------- | - | ------ | ---- |  | - | ----------- | - |  | ----------- | - |  | - | -
|                                  |  | Year Ended November 30, |         |   | Percentage Change |  
|                                  |  | 2008                    |         |   | 2007              |   |        | 2006 |  |   | 2007to 2008 |   |  | 2006to 2007 |  
|Research and development expenses |  | $                       | 106,594 |   |                   | $ | 92,924 |      |  | $ | 85,923      |   |  | 15          | % |  | 8 | %
|Percentage of total revenue       |  |                         | 17      | % |                   |   | 16     | %    |  |   | 17          | % |  |             |   |  |   |  

Total research and development expenses increased by $13.7 million or 15% in fiscal year 2008
compared to fiscal year 2007 and was primarily due to a $10.2 million increase in employee-related expenses primarily attributable to the Spotfire acquisition, a $2.4 million increase in contractor expenses and a $0.5 million increase in facilities
expenses.

The $7.0 million or 8% increase in research and development expenses in fiscal year 2007 compared to fiscal year 2006 was
primarily due to a $3.4 million increase in employee-related expenses primarily attributable to the Spotfire acquisition, a $1.8 million increase in contractor expenses, a $1.1 million increase in facilities expenses and a $0.6 million increase in
information technology-related expenses.

Sales and Marketing Expenses

Sales and marketing expenses consisted primarily of employee-related expenses, including sales commissions, salary, bonus, benefits, stock-based
compensation expenses, recruiting expense and office support, related costs of our direct sales force and marketing staff, and the cost of marketing programs, including customer conferences, promotional materials, trade shows, advertising and
related travel expenses.



|                             |  |                         |         |   |                   |   |         |      |  |   |             |   |  |             |   |  |    |  
|---------------------------- |  | ----------------------- | ------- | - | ----------------- | - | ------- | ---- |  | - | ----------- | - |  | ----------- | - |  | -- | -
|                             |  | Year Ended November 30, |         |   | Percentage Change |  
|                             |  | 2008                    |         |   | 2007              |   |         | 2006 |  |   | 2007to 2008 |   |  | 2006to 2007 |  
|Sales and marketing expenses |  | $                       | 224,641 |   |                   | $ | 197,397 |      |  | $ | 172,768     |   |  | 14          | % |  | 14 | %
|Percentage of total revenue  |  |                         | 35      | % |                   |   | 34      | %    |  |   | 32          | % |  |             |   |  |    |  



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##### Table of Contents

Total sales and marketing expenses increased by $27.2 million or 14% in fiscal year 2008 compared to
fiscal year 2007 and was primarily due to a $21.5 million increase in employee-related expenses, a $2.8 million increase in marketing programs, a $1.6 million increase in referral fees and a $0.7 million increase in travel expenses. The increase in
employee-related expenses was due to an increase in headcount mainly attributable to the Spotfire acquisition and an increase in quota carrying sales representatives. The increases in travel expenses and marketing programs were due to increased
marketing activities and their related travel costs.

The $24.6 million or 14% increase in sales and marketing expenses in fiscal year 2007
compared to fiscal year 2006 was primarily due to a $22.1 million increase in employee-related expenses, a $2.1 million increase in travel expenses and a $0.4 million increase in marketing programs. The increase in employee-related expenses was due
to an increase in headcount mainly attributable to the Spotfire acquisition and an increase in compensation programs. The increases in travel expenses and marketing programs were due to increased marketing activities and their related travel costs.
Our fiscal year 2007 sales and marketing expenses included incremental costs attributable to the Spotfire acquisition.

General and
Administrative Expenses

General and administrative expenses consisted primarily of employee-related expenses, including salary, bonus,
benefits, stock-based compensation expenses, recruiting expense and office support and related costs for general corporate functions including executive, legal, finance, accounting and human resources, and also included accounting, tax and legal
fees and charges.



|                                    |  |                         |        |   |                   |   |        |      |  |   |             |   |  |             |   |  |    |  
|----------------------------------- |  | ----------------------- | ------ | - | ----------------- | - | ------ | ---- |  | - | ----------- | - |  | ----------- | - |  | -- | -
|                                    |  | Year Ended November 30, |        |   | Percentage Change |  
|                                    |  | 2008                    |        |   | 2007              |   |        | 2006 |  |   | 2007to 2008 |   |  | 2006to 2007 |  
|General and administrative expenses |  | $                       | 53,046 |   |                   | $ | 51,538 |      |  | $ | 44,139      |   |  | 3           | % |  | 17 | %
|Percentage of total revenue         |  |                         | 8      | % |                   |   | 9      | %    |  |   | 9           | % |  |             |   |  |    |  

Total general and administrative expenses increased by $1.5 million or 3% in fiscal year 2008
compared to fiscal year 2007 and was primarily due to a $3.5 million increase in employee-related expenses and a $1.0 million increase in fees and charges, partially offset by a $3.1 million decrease in consulting expenses. The increase in
employee-related expenses was due to increased headcount and annual salary adjustments. Our fiscal year 2008 general and administrative expenses included incremental costs attributable to the Spotfire acquisition.

The $7.4 million or 17% increase in general and administrative expenses in fiscal year 2007 compared to fiscal year 2006 was primarily due to a $3.2
million increase in employee-related expenses, a $3.0 million increase in consulting expenses and a $1.1 million increase in fees and charges. The increase in employee-related expenses was due to increased headcount and annual salary adjustments.
The increase in consulting expenses was primarily due to the increased use of contractors associated with the Spotfire integration and terminated acquisition activities.

Restructuring Adjustment



|                            |  |                         |   |   |                   |   |        |      |  |   |             |   |             |     |  |   |  
|--------------------------- |  | ----------------------- | - | - | ----------------- | - | ------ | ---- |  | - | ----------- | - | ----------- | --- |  | - | -
|                            |  | Year Ended November 30, |   |   | Percentage Change |  
|                            |  | 2008                    |   |   | 2007              |   |        | 2006 |  |   | 2007to 2008 |   | 2006to 2007 |    
|Restructuring adjustment    |  | $                       |  |   |                   | $ | (1,095 | )    |  | $ | (1,042      | ) |             | n/a |  | 5 | %
|Percentage of total revenue |  |                         |  | % |                   |   |       | %    |  |   |            | % |             |     |  |   |  



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In the third quarter of fiscal year 2007 and the fourth quarter of fiscal year 2006, we recorded $1.1
million and $1.0 million credit adjustments to the restructuring charge related to properties vacated in connection with the consolidation of our facilities in fiscal year 2002. The adjustments resulted from revised estimates of future sublease
income due to the recovery of the applicable real estate market and the additions of new tenants. Currently, the majority of our previously vacated facilities under prior restructuring programs are now occupied by tenants. The estimated excess
facilities expenses were based on our contractual obligations, net of estimated sublease income, based on current comparable rates for leases in their respective markets.

Also see Note 8 to our Consolidated Financial Statements included in this Annual Report on Form 10-K for further discussion on restructuring charges.

Amortization of Acquired Intangible Assets

Intangible assets acquired through corporate acquisitions are comprised of the estimated value of developed technologies, patents, trademarks, established customer bases and non-compete agreements, as well as maintenance and OEM customer
royalty agreements. Amortization of developed technologies is recorded as a cost of revenue, and amortization of other acquired intangibles is included in operating expenses.



|                                            |  |                         |        |   |                   |   |        |      |  |   |             |   |  |             |   |  |    |  
|------------------------------------------- |  | ----------------------- | ------ | - | ----------------- | - | ------ | ---- |  | - | ----------- | - |  | ----------- | - |  | -- | -
|                                            |  | Year Ended November 30, |        |   | Percentage Change |  
|                                            |  | 2008                    |        |   | 2007              |   |        | 2006 |  |   | 2007to 2008 |   |  | 2006to 2007 |  
|Amortization of acquired intangible assets: |  |                         |        |   |                   |   |        |      |  |   |             |   |  |             |   |  |    |  
|In cost of revenue                          |  | $                       | 15,745 |   |                   | $ | 10,326 |      |  | $ | 5,322       |   |  |             |   |  |    |  
|In operating expenses                       |  |                         | 16,557 |   |                   |   | 13,164 |      |  |   | 9,454       |   |  |             |   |  |    |  
|                                            |  |                         |        |   |                   |   |        |      |  |   |             |   |  |             |   |  |    |  
|Total amortization expenses                 |  | $                       | 32,302 |   |                   | $ | 23,490 |      |  | $ | 14,776      |   |  | 38          | % |  | 59 | %
|                                            |  |                         |        |   |                   |   |        |      |  |   |             |   |  |             |   |  |    |  
|Percentage of total revenue                 |  |                         | 5      | % |                   |   | 4      | %    |  |   | 3           | % |  |             |   |  |    |  

The increases in amortization expenses in fiscal years 2008 and 2007 were primarily due to the
additional amortization related to intangible assets acquired in the acquisition of Insightful in the fourth quarter of fiscal year 2008 and Spotfire in the third quarter of fiscal year 2007. See Note 7 to our Consolidated Financial Statements
included in this Annual Report on Form 10-K for further details on acquired intangible assets.

Acquired In-Process Research and
Development



|                                             |  |                         |   |   |                   |   |       |      |  |   |             |   |             |     |  |    
|-------------------------------------------- |  | ----------------------- | - | - | ----------------- | - | ----- | ---- |  | - | ----------- | - | ----------- | --- |  | ---
|                                             |  | Year Ended November 30, |   |   | Percentage Change
|                                             |  | 2008                    |   |   | 2007              |   |       | 2006 |  |   | 2007to 2008 |   | 2006to 2007
|Acquired in-process research and development |  | $                       |  |   |                   | $ | 1,600 |      |  | $ |            |   |             | n/a |  | n/a
|Percentage of total revenue                  |  |                         |  | % |                   |   |      | %    |  |   |            | % |             |     |  |    

In the third quarter of fiscal year 2007, in conjunction with our acquisition of Spotfire, we
recorded acquired IPR&D charges of $1.6 million. Our methodology for allocating the purchase price relating to acquired IPR&D was determined through established valuation techniques. Acquired IPR&D was expensed upon acquisition as
technological feasibility had not been established and no future alternate use existed.



31



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##### Table of Contents

Stock-Based Compensation

The stock-based compensation expenses included in our Consolidated Statements of Operations corresponding to the same functional lines as cash
compensation paid to the same employees in the respective departments are as follows:



|                                   |  |                         |        |   |                   |   |        |      |  |   |             |   |  |             |   |  |    |  
|---------------------------------- |  | ----------------------- | ------ | - | ----------------- | - | ------ | ---- |  | - | ----------- | - |  | ----------- | - |  | -- | -
|                                   |  | Year Ended November 30, |        |   | Percentage Change |  
|                                   |  | 2008                    |        |   | 2007              |   |        | 2006 |  |   | 2007to 2008 |   |  | 2006to 2007 |  
|Stock-based compensation expenses: |  |                         |        |   |                   |   |        |      |  |   |             |   |  |             |   |  |    |  
|Cost of license                    |  | $                       | 33     |   |                   | $ | 31     |      |  | $ | 36          |   |  |             |   |  |    |  
|Cost of service and maintenance    |  |                         | 2,579  |   |                   |   | 2,434  |      |  |   | 2,076       |   |  |             |   |  |    |  
|                                   |  |                         |        |   |                   |   |        |      |  |   |             |   |  |             |   |  |    |  
|Total in cost of revenue           |  |                         | 2,612  |   |                   |   | 2,465  |      |  |   | 2,112       |   |  | 6           | % |  | 17 | %
|Research and development           |  |                         | 4,584  |   |                   |   | 3,712  |      |  |   | 3,612       |   |  |             |   |  |    |  
|Sales and marketing                |  |                         | 6,963  |   |                   |   | 5,695  |      |  |   | 4,617       |   |  |             |   |  |    |  
|General and administrative         |  |                         | 6,813  |   |                   |   | 5,691  |      |  |   | 5,477       |   |  |             |   |  |    |  
|                                   |  |                         |        |   |                   |   |        |      |  |   |             |   |  |             |   |  |    |  
|Total in operating expenses        |  |                         | 18,360 |   |                   |   | 15,098 |      |  |   | 13,706      |   |  | 22          | % |  | 10 | %
|                                   |  |                         |        |   |                   |   |        |      |  |   |             |   |  |             |   |  |    |  
|Total                              |  | $                       | 20,972 |   |                   | $ | 17,563 |      |  | $ | 15,818      |   |  | 19          | % |  | 11 | %
|                                   |  |                         |        |   |                   |   |        |      |  |   |             |   |  |             |   |  |    |  
|Percentage of total revenue        |  |                         | 3      | % |                   |   | 3      | %    |  |   | 3           | % |  |             |   |  |    |  

On December 1, 2005, we adopted SFAS No. 123(R), which requires recognition of
compensation expense for all stock-based awards made to employees in our Consolidated Statements of Operations. See Note 14 to our Consolidated Financial Statements included in this Annual Report on Form 10-K for further details on stock-based
compensation.

We utilize the Black-Scholes option pricing model to value equity instruments. The Black-Scholes model was developed for use
in estimating the value of traded options that have no vesting or hedging restrictions and are fully transferable. Because our employee stock options have certain characteristics that are significantly different from traded options, and because
changes in the subjective assumptions can materially affect the estimated value, in managements opinion, the existing valuation model may not provide an accurate measure of the fair value of our employee stock options. Although the fair value
of employee stock options is determined in accordance with SFAS No. 123(R) and SAB No. 107 using an option-pricing model, that value may not be indicative of the fair value observed in a willing buyer/willing seller market transaction.

Interest Income



|                            |  |                         |       |   |                   |   |        |      |  |   |             |   |  |             |    |  |    |   
|--------------------------- |  | ----------------------- | ----- | - | ----------------- | - | ------ | ---- |  | - | ----------- | - |  | ----------- | -- |  | -- | --
|                            |  | Year Ended November 30, |       |   | Percentage Change |  
|                            |  | 2008                    |       |   | 2007              |   |        | 2006 |  |   | 2007to 2008 |   |  | 2006to 2007 |   
|Interest income             |  | $                       | 9,115 |   |                   | $ | 18,447 |      |  | $ | 19,936      |   |  | (51         | )% |  | (7 | )%
|Percentage of total revenue |  |                         | 1     | % |                   |   | 3      | %    |  |   | 4           | % |  |             |    |  |    |   

The decreases in interest income in fiscal year 2008 compared to fiscal year 2007 and in fiscal
year 2007 compared to fiscal year 2006 were primarily due to lower average investment portfolio balances primarily as a result of the use of cash for the Spotfire acquisition and our stock repurchase program, as well as lower returns due to our mix
of investments.

Interest Expense



|                            |  |                         |        |   |                   |   |        |      |  |   |             |    |  |             |   |  |     |   
|--------------------------- |  | ----------------------- | ------ | - | ----------------- | - | ------ | ---- |  | - | ----------- | -- |  | ----------- | - |  | --- | --
|                            |  | Year Ended November 30, |        |   | Percentage Change |  
|                            |  | 2008                    |        |   | 2007              |   |        | 2006 |  |   | 2007to 2008 |    |  | 2006to 2007 |  
|Interest expense            |  | $                       | (3,238 | ) |                   | $ | (2,824 | )    |  | $ | (3,171      | )  |  | 15          | % |  | (11 | )%
|Percentage of total revenue |  |                         |       | % |                   |   | (1     | )%   |  |   | (1          | )% |  |             |   |  |     |   



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Interest expense was primarily related to a $54.0 million mortgage note issued in connection with the
purchase of our corporate headquarters. The mortgage note payable carries a 20-year amortization, and in the second quarter of fiscal year 2007, we amended the mortgage note payable such that it now carries a fixed annual interest rate of 5.50%. The
balance of the mortgage note as of November 30, 2008, was $44.6 million. The $34.4 million principal balance that will remain at the end of the ten-year term will be due as a final lump sum payment on July 1, 2013. See Note 9 to our
Consolidated Financial Statements included in this Annual Report on Form 10-K for further detail on the mortgage note payable.

Other
Income (Expense), net

Other income (expense), net, included realized gains and losses on investments, foreign exchange gain (loss) and
other miscellaneous income and expense items.



|                                               |  |                         |        |   |                   |   |        |      |  |   |             |   |  |             |    |  |      |   
|---------------------------------------------- |  | ----------------------- | ------ | - | ----------------- | - | ------ | ---- |  | - | ----------- | - |  | ----------- | -- |  | ---- | --
|                                               |  | Year Ended November 30, |        |   | Percentage Change |  
|                                               |  | 2008                    |        |   | 2007              |   |        | 2006 |  |   | 2007to 2008 |   |  | 2006to 2007 |   
|Other income (expense):                        |  |                         |        |   |                   |   |        |      |  |   |             |   |  |             |    |  |      |   
|Foreign exchange gain (loss)                   |  | $                       | (1,081 | ) |                   | $ | (1,502 | )    |  | $ | 763         |   |  |             |    |  |      |   
|Realized gain (loss) on short-term investments |  |                         | 235    |   |                   |   | (312   | )    |  |   | 45          |   |  |             |    |  |      |   
|Realized gain on other investments             |  |                         | 125    |   |                   |   | 64     |      |  |   | 738         |   |  |             |    |  |      |   
|Other income (expense), net                    |  |                         | (61    | ) |                   |   | 569    |      |  |   | (109        | ) |  |             |    |  |      |   
|                                               |  |                         |        |   |                   |   |        |      |  |   |             |   |  |             |    |  |      |   
|Total other income (expense), net              |  | $                       | (782   | ) |                   | $ | (1,181 | )    |  | $ | 1,437       |   |  | (34         | )% |  | (182 | )%
|                                               |  |                         |        |   |                   |   |        |      |  |   |             |   |  |             |    |  |      |   
|Percentage of total revenue                    |  |                         |       | % |                   |   |       | %    |  |   |            | % |  |             |    |  |      |   

The increase in other income (expense) in absolute dollars in fiscal year 2008 compared to fiscal
year 2007 was primarily due to a $0.4 million in foreign exchange improvement compared to losses in the prior year, a $0.2 million gain from the sale of a short-term investment and a $0.1 million gain from the sale of a long-term private equity
investment.

The decrease in other income (expense) in absolute dollars in fiscal year 2007 compared to fiscal year 2006 was primarily due
to exchange rates fluctuation on foreign currency transactions in fiscal year 2007.

Income Taxes



|                                        |  |                         |        |   |                   |   |        |      |  |   |             |   |  |             |    |  |    |  
|--------------------------------------- |  | ----------------------- | ------ | - | ----------------- | - | ------ | ---- |  | - | ----------- | - |  | ----------- | -- |  | -- | -
|                                        |  | Year Ended November 30, |        |   | Percentage Change |  
|                                        |  | 2008                    |        |   | 2007              |   |        | 2006 |  |   | 2007to 2008 |   |  | 2006to 2007 |   
|Provision for (benefit from) income tax |  | $                       | 18,314 |   |                   | $ | 25,401 |      |  | $ | 17,694      |   |  | (28         | )% |  | 44 | %
|Effective tax rate                      |  |                         | 26     | % |                   |   | 33     | %    |  |   | 20          | % |  |             |    |  |    |  

The effective tax rate was 26%, 33% and 20% in fiscal years 2008, 2007 and 2006, respectively. The
effective tax rate in fiscal year 2008 differed from the statutory rate of 35% primarily due to the benefits resulting from the reorganization of certain foreign entities, a higher proportion of foreign income taxed at rates lower than the U.S.
statutory rate, research and development credits and the tax benefit from the release of valuation allowance resulting from the ability to claim capital loss and foreign tax credit carryovers; which was partially offset by the tax impact of certain
stock compensation charges under SFAS No. 123(R) and state income tax expense. The effective tax rate in fiscal year 2007 differed from the statutory rate of 35% primarily due to research and development credits and the tax benefit from the
release of valuation allowance resulting from the ability to claim foreign tax credits against our foreign source income; which was partially offset by the tax impact of certain stock compensation charges under SFAS No. 123(R) and state income
tax expense. The effective tax rate in fiscal year 2006 differed from the statutory rate of 35% primarily due to the tax benefit from the release of valuation allowance and the tax benefit from the Extraterritorial Income Exclusion; which was
partially offset by the tax impact of certain stock compensation charges under SFAS No. 123(R) and state income tax expense.



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In connection with the acquisition of Insightful in fiscal year 2008, we have recorded current deferred
tax assets of $0.6 million, current deferred tax liabilities of $0.1 million, long-term deferred tax assets of $3.2 million and long-term deferred tax liabilities of $0.4 million; with a corresponding adjustment to goodwill. These deferred taxes
were related to the acquired tangible and intangible assets, deferred revenue and certain tax attributes of Insightful.

In connection with
the acquisition of Spotfire in fiscal year 2007, we recorded current deferred tax assets of $4.1 million, current deferred tax liabilities of $17.3 million, long-term deferred tax assets of $11.9 million and long-term deferred tax liabilities of
$18.7 million with a corresponding adjustment to goodwill. These deferred taxes were related to the acquired tangible and intangible assets, deferred revenue, pre-acquisition receivable and certain tax attributes of Spotfire. The IPR&D of $1.6
million that was expensed in fiscal year 2007 is not deductible for income tax purposes. This resulted in an unfavorable effective tax rate impact of 0.8% for the fiscal year ended November 30, 2007.

We make certain estimates and judgments in determining income tax expense for financial statement purposes. These estimates and judgments occur in the
calculation of certain tax assets and liabilities, which arise from differences in the timing of recognition of revenue and expense for tax and financial statement purposes.

As part of the process of preparing our Consolidated Financial Statements, we are required to estimate our income taxes in each of the jurisdictions in
which we operate. This process involves us estimating our current tax exposure under the most recent tax laws and assessing temporary differences resulting from differing treatment of items for tax and accounting purposes. These differences result
in deferred tax assets and liabilities, which are included in our Consolidated Balance Sheets.

We assess the likelihood that we will be
able to recover our deferred tax assets. We consider all available evidence, both positive and negative, including historical levels of income, expectations and risks associated with estimates of future taxable income and ongoing prudent and
feasible tax planning strategies in assessing the need for the valuation allowance. If it is not more likely than not that we will recover our deferred tax assets, we will increase our provision for taxes by recording a valuation allowance against
the deferred tax assets that we estimate will not ultimately be recoverable. The available positive evidence at November 30, 2008, included five years of historical operating profits and a projection of future income sufficient to realize most
of our remaining deferred tax assets. We recorded a valuation allowance release of $1.2 million in fiscal year 2008, related to the utilization of capital loss and foreign tax credit. As of November 30, 2008, it was considered more likely
than not that our deferred tax assets would be realized with the exception of certain capital loss and foreign tax credit carryovers as we cannot forecast sufficient future capital gains or foreign source income to realize these deferred tax assets.
The remaining valuation allowance of approximately $7.9 million as of November 30, 2008 will result in an income tax benefit if and when we conclude it is more likely than not that the related deferred tax assets will be realized.

As of November 30, 2008, we believed that the amount of deferred tax assets recorded on our balance sheet would ultimately be
recovered. However, should there be a change in our ability to recover our deferred tax assets, our tax provision would increase in the period in which we determine that it is more likely than not that we cannot recover our deferred tax assets. If
we have to re-establish a full valuation allowance against our deferred tax assets, it would result in an increase of $38.6 million to income tax expense.

Our income taxes payable for federal purposes have been reduced by the tax benefits associated with the exercise of employee stock options during the fiscal year and utilization of net operating loss carryover
applicable to stock options. The benefits applicable to stock options were credited directly to stockholders equity when realized and amounted to $27.0 million and $19.5 million for fiscal years 2008 and 2007, respectively.

As of November 30, 2008, our federal and state net operating loss carryforwards for income tax purposes were $313.1 million and $59.9 million,
respectively, which expire in 2027. As of November 30, 2008, our federal



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and state tax credit carryforwards for income tax purposes were $36.8 million and $29.0 million, respectively. The federal tax credit carryforwards expire in
2028 and the state tax credits can be carried forward indefinitely.

U.S. income taxes and foreign withholding taxes have not been provided
on a cumulative total of $38.9 million of undistributed earnings for certain non-U.S. subsidiaries. With the exception of our subsidiaries in the United Kingdom, net undistributed earnings of our foreign subsidiaries are generally considered to be
indefinitely reinvested, and accordingly, no provision for U.S. income taxes has been provided thereon. Upon distribution of these earnings in the form of dividends or otherwise, we will be subject to U.S. income taxes net of available foreign tax
credits associated with these earnings.

While we have not experienced and do not expect any impact to the effective tax rate for U.S.
non-qualified stock option or restricted stock expense due to the adoption of SFAS No. 123(R), the effective tax rate has been and may be negatively impacted by foreign stock option expense that may not be deductible in the foreign
jurisdictions. Also, SFAS No. 123(R) requires that the tax benefit of stock option deductions relating to incentive stock options be recorded in the period of disqualifying disposition. This could result in significant fluctuations in our
effective tax rate between accounting periods.

We have elected to track the portion of our federal and state net operating loss and tax
credit carryforwards attributable to stock option benefits in a separate memo account pursuant to SFAS No. 123(R). Therefore, these amounts are no longer included in our gross or net deferred tax assets. Pursuant to SFAS No. 123(R),
footnote 82, the benefit of these net operating loss and tax credit carryforwards will only be recorded to equity when they reduce cash taxes payable.

As of November 30, 2008, our federal and state net operating loss carryforwards being accounted for in the memo account were $208.6 million and $29.7 million, respectively. As of November 30, 2008, our
federal and state tax credit carryforwards being accounted for in the memo account were $34.2 million and $19.6 million, respectively.

In
the event of a change in ownership, as defined under federal and state tax laws, our net operating loss and tax credit carryforwards may be subject to annual limitations. The annual limitations may result in the expiration of the net operating loss
and tax credit carryforwards before utilization.

Liquidity and Capital Resources

Current Cash Flows

As of
November 30, 2008, we had cash, cash equivalents and short-term investments totaling $267.5 million, representing an increase of $1.7 million from November 30, 2007. Our total cash and cash equivalent balance was $254.4 million as of
November 30, 2008. As of November 30, 2008, our short-term available-for-sale investments totaled $13.1 million, primarily consisting of U.S. government debt securities and high investment grade corporate debt, asset-backed and
mortgage-backed securities.

Net cash provided by operating activities in fiscal year 2008 was $152.5 million, resulting from net
income of $52.4 million, adjusted for $46.3 million in non-cash charges and $53.8 million net change in assets and liabilities. The non-cash charges included depreciation and amortization, tax benefits related to stock benefit plans,
stock-based compensation, other non-cash adjustments, minority interest and acquired IPR&D, less deferred income tax and excess tax benefits from stock-based compensation recorded in financing activities following the adoption of
SFAS No. 123(R) in fiscal year 2006. Net change in assets and liabilities included a decrease in accounts receivable due to significant cash collections for fiscal year 2008, a decrease in prepaid expenses and other assets, an increase in
accrued liabilities and excess facilities costs, an increase in deferred revenue and an increase in accounts payable.



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To the extent that non-cash items increase or decrease our future operating results, there will be no
corresponding impact on our cash flows. After excluding the effects of these non-cash charges, the primary changes in cash flows relating to operating activities result from changes in working capital. Our primary source of operating cash flows is
the collection of accounts receivable from our customers, including maintenance which is typically billed annually in advance. Our operating cash flows are also impacted by the timing of payments to our vendors for accounts payable and other
liabilities. We generally pay our vendors and service providers in accordance with the invoice terms and conditions. The timing of cash payments in future periods will be impacted by the terms of accounts payable arrangements.

Net cash provided by investing activities was $58.9 million in fiscal year 2008, resulting primarily from the net cash proceeds from short-term
investments of $87.0 million, which was partially offset by cash used, net of cash acquired, of $20.1 million for the Insightful acquisition and cash used of $8.9 million in capital expenditures. In addition, we used part of the net proceeds from
sales of short-term investments to finance our stock repurchase program.

Net cash used for financing activities was $115.6 million in
fiscal year 2008, resulting primarily from our $149.0 million repurchase of shares of our common stock on the open market and $1.9 million repayment of long-term debts, less $10.6 million cash received from the exercise of stock options and the sale
of stock under our Employee Stock Purchase Program, and $24.7 million excess tax benefits from stock-based compensation in accordance with the requirements of SFAS No. 123(R).

In April 2007, our Board of Directors approved a stock repurchase program pursuant to which we could repurchase up to $300.0 million of our outstanding
common stock. In April 2008, our Board of Directors approved a new stock repurchase program pursuant to which we may repurchase up to $300.0 million of our outstanding common stock from time to time in the open market or through privately negotiated
transactions. In connection with approving the April 2008 stock repurchase program, the April 2007 stock repurchase program was terminated and the remaining authorized amount of $69.6 million under the April 2007 stock repurchase program was
canceled. In fiscal year 2008, we repurchased approximately 21.3 million shares of our outstanding common stock at an average price of $7.00 per share pursuant to the programs.

We currently anticipate that our operating expenses will grow in absolute dollars for the foreseeable future, and we intend to fund our operating
expenses primarily through cash flows from operations. We believe that our current cash, cash equivalents and short-term investments together with expected cash flows from operations will be sufficient to meet our anticipated cash requirements for
working capital, capital expenditures, and currently approved stock repurchases for at least the next twelve months. However, we may require or desire additional funds to support our operating expenses and capital requirements or for other purposes,
such as acquisitions, and may seek to raise such additional funds through public or private equity or debt financing or from other sources.

Fair Value Inputs

Beginning in fiscal year 2008, we adopted SFAS No. 157. See Note 2 to the Consolidated
Financial Statements included in this Annual Report on Form 10-K. Fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. The use of fair value
to measure investment instruments, with related unrealized and realized gains or losses on investment is a component to our consolidated results of operations.

We value our cash, cash equivalents, and investment instruments by using quoted market prices, broker or dealer quotations, or alternative pricing sources with reasonable levels of price transparency. The types of
instruments valued based on quoted market prices in active markets include most U.S. government and agency securities, sovereign government obligations, and money market securities. We do not adjust the quoted price for such instruments. The
types of instruments valued based on quoted prices in markets that are not active, broker or dealer quotations, or alternative pricing sources with reasonable levels of price transparency include investment-



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grade corporate bonds, mortgage-backed and asset-backed products, state, municipal and provincial obligations. The price for each security at the measurement
date is derived from various sources. Periodically, management assesses the reasonableness of these sourced prices by comparing them to the prices provided by our portfolio managers to derive the fair value of these financial instruments.
Historically, we have not experienced significant deviation between the sourced prices and our portfolio managers prices. Management assesses the inputs of the pricing in order to categorize the financial instruments into the appropriate
hierarchy levels.

Commitments

In June 2003, we purchased our corporate headquarters with a $54.0 million mortgage note to lower our operating costs. The mortgage note payable carries a 20-year amortization and, as amended in the second quarter of fiscal year 2007, a
fixed annual interest rate of 5.50%. The principal balance of $34.4 million that will be remaining at the end of the 10-year term will be due as a final lump sum payment on July 1, 2013. Under the applicable terms of the mortgage note
agreements, we are prohibited from acquiring another company without prior consent from the lender unless we maintain at least $50.0 million of cash or cash equivalents and meet other non-financial terms as defined in the agreements. In addition, we
are subject to certain non-financial covenants as defined in the agreements. We were in compliance with all covenants as of November 30, 2008.

In conjunction with the purchase of our corporate headquarters, we entered into a 51-year lease of the land upon which the property is located. The lease was paid in advance for a total of $28.0 million, but is subject to adjustments every
ten years based upon changes in fair market value of the land. Should it become necessary, we have the option to prepay any rent increases due as a result of a change in fair market value.

We have a $20.0 million revolving line of credit that matures on June 18, 2009. The revolving line of credit is available for cash borrowings and
for the issuance of letters of credit up to $20.0 million. As of November 30, 2008, no borrowings were outstanding under the facility and a $13.0 million irrevocable letter of credit was outstanding, leaving $7.0 million of available credit for
additional letters of credit or cash borrowings. The $13.0 million irrevocable letter of credit outstanding was issued in connection with the mortgage note payable. The letter of credit automatically renews for successive one-year periods, until the
mortgage note payable has been satisfied in full. We are required to maintain a minimum of $40.0 million in unrestricted cash, cash equivalents and short-term investments, net of total current and long-term indebtedness, as well as comply with other
non-financial covenants defined in the agreement. As of November 30, 2008, we were in compliance with all covenants under the revolving line of credit.

In connection with a facility lease, we have an irrevocable letter of credit in the amount of $4.5 million. The letter of credit automatically renews annually for the duration of the lease term, which expires in
December 2010. We are subject to certain financial covenants as defined in the letter of credit agreement. As of November 30, 2008, we were in compliance with all covenants under the letter of credit.

As of November 30, 2008, we had $3.0 million in restricted cash in connection with bank guarantees issued by some of our international subsidiaries.
The cash collateral is presented as restricted cash and included in Other Assets in our Consolidated Balance Sheet.



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As of November 30, 2008, our contractual commitments associated with indebtedness, lease obligations
and restructuring are as follows (in thousands):



|                                   |  |       |        |   |      |   |        |      |  |   |        |   |  |      |        |      |  |            |       |  |   |        |  |   |      
|---------------------------------- |  | ----- | ------ | - | ---- | - | ------ | ---- |  | - | ------ | - |  | ---- | ------ | ---- |  | ---------- | ----- |  | - | ------ |  | - | -----
|                                   |  | Total |        |   | 2009 |   |        | 2010 |  |   | 2011   |   |  | 2012 |        | 2013 |  | Thereafter
|Operating commitments:             |  |       |        |   |      |   |        |      |  |   |        |   |  |      |        |      |  |            |       |  |   |        |  |   |      
|Debt principal                     |  | $     | 44,558 |   |      | $ | 2,033  |      |  | $ | 2,148  |   |  | $    | 2,269  |      |  | $          | 2,397 |  | $ | 35,711 |  | $ |     
|Debt interest                      |  |       | 10,168 |   |      |   | 2,400  |      |  |   | 2,285  |   |  |      | 2,164  |      |  |            | 2,036 |  |   | 1,283  |  |   |     
|Operating leases                   |  |       | 31,406 |   |      |   | 10,302 |      |  |   | 7,447  |   |  |      | 5,342  |      |  |            | 3,227 |  |   | 2,382  |  |   | 2,706
|                                   |  |       |        |   |      |   |        |      |  |   |        |   |  |      |        |      |  |            |       |  |   |        |  |   |      
|                                   |  |       | 86,132 |   |      |   | 14,735 |      |  |   | 11,880 |   |  |      | 9,775  |      |  |            | 7,660 |  |   | 39,376 |  |   | 2,706
|                                   |  |       |        |   |      |   |        |      |  |   |        |   |  |      |        |      |  |            |       |  |   |        |  |   |      
|Restructuring-related commitments: |  |       |        |   |      |   |        |      |  |   |        |   |  |      |        |      |  |            |       |  |   |        |  |   |      
|Gross lease obligations            |  |       | 15,941 |   |      |   | 7,237  |      |  |   | 8,008  |   |  |      | 652    |      |  |            | 9     |  |   | 9      |  |   | 26   
|Estimated sublease income          |  |       | (6,578 | ) |      |   | (3,243 | )    |  |   | (3,096 | ) |  |      | (239   | )    |  |            |      |  |   |       |  |   |     
|                                   |  |       |        |   |      |   |        |      |  |   |        |   |  |      |        |      |  |            |       |  |   |        |  |   |      
|                                   |  |       | 9,363  |   |      |   | 3,994  |      |  |   | 4,912  |   |  |      | 413    |      |  |            | 9     |  |   | 9      |  |   | 26   
|                                   |  |       |        |   |      |   |        |      |  |   |        |   |  |      |        |      |  |            |       |  |   |        |  |   |      
|Total commitments                  |  | $     | 95,495 |   |      | $ | 18,729 |      |  | $ | 16,792 |   |  | $    | 10,188 |      |  | $          | 7,669 |  | $ | 39,385 |  | $ | 2,732
|                                   |  |       |        |   |      |   |        |      |  |   |        |   |  |      |        |      |  |            |       |  |   |        |  |   |      

Future minimum lease payments under restructured non-cancelable operating leases as of
November 30, 2008, are included in Accrued Restructuring and Excess Facilities Costs on our Consolidated Balance Sheets. See also Note 8 to our Consolidated Financial Statements included in this Annual Report on Form 10-K for further details on
accrued restructuring costs.

The above commitment table does not include approximately $12.4 million of long-term income tax liabilities
recorded in accordance with FIN 48 due to the fact that we are unable to reasonably estimate the timing of these potential future payments.

Indemnification

Our software license agreements typically provide for indemnification of customers for intellectual
property infringement claims. To date, no such claims have been filed against us. We also warrant to customers that our software products operate substantially in accordance with the software products specifications. Historically, minimal
costs have been incurred related to product warranties, and, as such, no accruals for warranty costs have been made. In addition, we indemnify our officers and directors under the terms of indemnity agreements entered into with them, as well as
pursuant to our certificate of incorporation, bylaws and applicable provisions of Delaware law.

To date, we have incurred costs for the
payment of legal fees in connection with the legal proceedings detailed in Note 12 to our Consolidated Financial Statements included in this Annual Report on Form 10-K.

Off-Balance Sheet Arrangements

As of November 30, 2008, we had no off-balance sheet
arrangements as defined in Item 303(a)(4) of Regulation S-K.

Recent Accounting Pronouncements

Recent accounting pronouncements are detailed in Note 2 to our Consolidated Financial Statements included in this Annual Report on Form 10-K.



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|ITEM 7A. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|-------- | ----------------------------------------------------------

We are exposed to the impact of foreign currency fluctuations, interest rate changes and uncertainties in the credit market.

Interest Rate
Risk

Our exposure to market rate risk for changes in interest rates relates primarily to our investment portfolio. We invest
excess cash in marketable debt instruments of the United States government and its agencies, high-quality corporate debt securities, asset-backed and mortgage-backed debt securities and, by policy, limit the amount of credit exposure to any one
issuer. Our investment policy is intended to protect and preserve invested funds by limiting default, market and investment risk.

Investments in both fixed rate and floating rate interest earning instruments carry a degree of interest rate risk. Fixed rate securities may have their fair market value adversely impacted due to a rise in interest rates, while
floating rate securities may produce less income than expected if interest rates fall. Due in part to these factors, our future investment income may fall short of expectations due to changes in interest rates, or we may suffer losses in
principal if forced to sell securities which have declined in market value due to changes in interest rates or other factors in the current unstable credit environment. As of November 30, 2008, we had an investment portfolio of fixed
income securities totaling $13.1 million, excluding those classified as cash and cash equivalents. These securities are classified as available-for-sale and are recorded on the balance sheets at fair market value with unrealized gains or losses
reported under Accumulated Other Comprehensive Income (Loss), a separate component of stockholders equity. Unrealized losses are charged against income when a decline in fair market value is determined to be other-than-temporary. The specific
identification method is used to determine the cost of securities sold.

As of November 30, 2008, a hypothetical 100 basis point
increase in interest rates would result in an approximate $47,000 decrease in the fair value of our available-for-sale debt securities.

Foreign
Currency Risk

We conduct business in the Americas, EMEA and APJ. As a result, our financial results could be affected by factors such
as changes in foreign currency exchange rates or changes in economic conditions in foreign markets. The majority of our sales are currently made in U.S. dollars. In addition, we transact business in approximately 20 foreign currencies worldwide, of
which the most significant to our operations in fiscal year 2008 was the EURO. We enter into forward contracts with financial institutions to manage our currency exposure related to net assets and liabilities denominated in foreign currencies, and
these forward contracts are generally settled monthly. We do not enter into derivative financial instruments for trading purposes.

We are
also exposed to foreign exchange rate fluctuations as we convert the financial statements of our foreign subsidiaries into U.S. dollars in consolidation. If there is a change in foreign currency exchange rates, the conversion of the foreign
subsidiaries financial statements into U.S. dollars will lead to translation gains or losses, which are recorded net as a component of other comprehensive income.



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As of November 30, 2008, we had seven outstanding forward contracts with a total notional amount of
$51.6 million, which are summarized as follows (in thousands):



|                        |  |                             |  |                  |        |                          |   |     |  
|----------------------- |  | --------------------------- |  | ---------------- | ------ | ------------------------ | - | --- | -
|                        |  | NotionalValueLocal Currency |  | NotionalValueUSD |        | Fair ValueGain (Loss)USD |  
|Forward contracts sold: |  |                             |  |                  |        |                          |   |     |  
|EURO                    |  | 29,800                      |  | $                | 38,204 |                          | $ | 555 |  
|Australian dollar       |  | 1,200                       |  |                  | 775    |                          |   | 1   |  
|British pound           |  | 2,500                       |  |                  | 3,805  |                          |   | 43  |  
|Japanese yen            |  | 82,000                      |  |                  | 860    |                          |   | 5   |  
|South African rand      |  | 64,000                      |  |                  | 6,397  |                          |   | 74  |  
|Swiss franc             |  | 1,100                       |  |                  | 913    |                          |   | 16  |  
|New Taiwan dollar       |  | 22,000                      |  |                  | 659    |                          |   | (6  | )
|                        |  |                             |  |                  |        |                          |   |     |  
|                        |  |                             |  | $                | 51,613 |                          | $ | 688 |  
|                        |  |                             |  |                  |        |                          |   |     |  



|ITEM 8. | FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|------- | -------------------------------------------

Reference is made to the Index to Consolidated Financial Statements that appears on page F-1 of this Annual Report on Form 10-K. The Report of Independent Registered Public Accounting Firm from PricewaterhouseCoopers LLP, the Consolidated
Financial Statements and the Notes to Consolidated Financial Statements listed in the Index to Consolidated Financial Statements, which appear beginning on page F-2 of this Annual Report on Form 10-K, are incorporated by reference into this
Item 8.



|ITEM 9. | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|------- | ------------------------------------------------------------------------------------

Not applicable.



|ITEM 9A. | CONTROLS AND PROCEDURES
|-------- | -----------------------

Evaluation of
Disclosure Controls and Procedures.     We maintain disclosure controls and procedures, as such term is defined in Rule 13a-15(e) under the Exchange Act, that are designed to ensure that information required to be
disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and that such information is accumulated and communicated to our
management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. In designing and evaluating our disclosure controls and procedures, management recognized that
disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met. Additionally, in designing disclosure controls
and procedures, our management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible disclosure controls and procedures. The design of any disclosure controls and procedures also is based in part upon
certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

Based on their evaluation as of the end of the period covered by this Annual Report on Form 10-K, our Chief Executive Officer and Chief Financial Officer
have concluded that our disclosure controls and procedures were effective.

Managements Report on Internal Control over Financial
Reporting.    Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) of the Exchange Act. Because of its inherent limitations, internal
control over financial reporting may not prevent or



40



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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.

We assessed the
effectiveness of our internal control over financial reporting as of November 30, 2008. In making this assessment, we used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal
ControlIntegrated Framework. Based on our assessment using those criteria, we concluded that our internal control over financial reporting was effective as of November 30, 2008.

The effectiveness of our internal control over financial reporting as of November 30, 2008, has been audited by PricewaterhouseCoopers LLP, an
independent registered public accounting firm, as stated in their report that appears herein.

Changes in Internal Control over
Financial Reporting.    There was no change in our internal control over financial reporting that occurred during the fourth quarter of fiscal year 2008 that has materially affected, or is reasonably likely to materially
affect, our internal control over financial reporting.



|ITEM 9B. | OTHER INFORMATION
|-------- | -----------------

On January 23, 2009, Troy
Mitchell, our Vice President of Worldwide Accounting was appointed to the position of Vice President, Corporate Controller, effective February 1, 2009. In this role, Mr. Mitchell will act as our Principal Accounting Officer. Mr. Mitchell, age 48,
joined TIBCO in September 2004. From April 2002 to August 2004, Mr. Mitchell held a number of positions at Portal Software, including Corporate Controller. In connection with the appointment, Mr. Mitchells annual salary will be increased to
$238,000 and he will continue to participate in our Executive Incentive Compensation Plan.



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PART III



|ITEM 10. | DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
|-------- | ------------------------------------------------------

Except as set forth below, the information required by this Item is incorporated by reference to the sections entitled Board of Directors, Election of Directors, and Section 16 Beneficial Ownership
Reporting Compliance in our Proxy Statement for the 2009 Annual Meeting of Stockholders to be filed with the SEC within 120 days after the end of our fiscal year ended November 30, 2008.

Executive Officers

The name of and certain
information regarding each of our current executive officers are set forth below.

Vivek Y. Ranadivé, age 51, has
served as our Chairman and Chief Executive Officer since our inception. Mr. Ranadivé founded Teknekron Software Systems, Inc., our predecessor company, in 1985.

Sydney L. Carey, age 44, our Executive Vice President, Chief Financial Officer, joined TIBCO in January 2004. From February 2002 to January
2004, Ms. Carey was Chief Financial Officer of Vernier Networks. From December 2000 until February 2002, Ms. Carey was Chief Financial Officer of Pacific Broadband Communications.

William R. Hughes, age 48, our Executive Vice President, General Counsel and Secretary, joined TIBCO in 1999. Between 1989 and his joining
TIBCO in 1999, Mr. Hughes held several in-house legal positions in the technology industry in Europe and the United States. Prior to 1989, Mr. Hughes worked in private practice in the areas of corporate, finance and intellectual property
law.

Thomas Laffey, age 53, our Executive Vice President, Products and Technology, joined TIBCO in April 2002. Prior to
joining TIBCO, Mr. Laffey was a co-founder of Talarian Corporation, a provider of middleware, where he was responsible for engineering and product direction.

Ram Menon, age 43, our Executive Vice President, Worldwide Marketing, joined TIBCO in July 1999. Prior to joining TIBCO, Mr. Menon was with Accenture, a global consulting firm, where he specialized
in supply chain and e-commerce strategy consulting with Global 1000 companies.

Murray D. Rode, age 44, our Chief Operating
Officer, joined TIBCO in February 1995. Prior to joining TIBCO, Mr. Rode was a management consultant with a major international consulting firm, where he specialized in the areas of technology strategy and planning, business process
re-engineering and project management.

Murat Sonmez, age 45, our Executive Vice President, Global Field Operations, has been
with TIBCO since October 2003 and from January 1994 to July 2002. From August 2002 to September 2003, Mr. Sonmez served as Executive Vice President, Operations at Centrata, a utility computing software firm.

Christopher Ahlberg, age 40, our Executive Vice President, President Spotfire Division, joined TIBCO in 2007. Prior to joining TIBCO,
Dr. Ahlberg was the founder of Spotfire, Inc. a provider of enterprise analytics software for next generation business intelligence, and served as its Chief Executive Officer from 1996 to 2007. Dr. Ahlberg has announced his resignation
effective on March 1, 2009.

Code of Ethics

We have adopted a Code of Ethics for Chief Executive and Senior Financial Officers that applies to our Chief Executive Officer, Chief Financial Officer, Chief Accounting Officer, Corporate Controller and all others
performing similar functions. The Code of Ethics is available on our website at http://www.tibco.com/company/



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investor_info/corporate_governance/code_ethics. If we make any substantive amendments to the Code of Ethics or grant any waiver, including any
implicit waiver, from a provision of the code to our Chief Executive Officer, Chief Financial Officer, Chief Accounting Officer, Corporate Controller or others providing similar functions, we will disclose the nature of such amendment or waiver on
our website or in a current report on Form 8-K.

Amendment to Bylaws for Director Nomination Process

On June 14, 2008, our Board of Directors amended certain provisions of our bylaws including changes to the procedures by which a stockholder may
nominate an individual to stand for election to the Board of Directors. The Nominating and Governance Committee reviews, evaluates and proposes prospective candidates for our Board of Directors and considers nominees properly recommended by
stockholders. Stockholders wishing to submit nominations must submit timely written notice in proper form to TIBCO Software Inc., ATTN: Corporate Secretary, 3303 Hillview Ave., Palo Alto, CA 94304. To be timely, a stockholders notice must be
delivered to or mailed and received by our corporate secretary at our principal executive offices not later than the close of business on the 90th day, nor earlier than the close of business on the 120th day, prior to the anniversary date of the
immediately preceding annual meeting; provided, however, that in the event that no annual meeting was held in the previous year or the annual meeting is called for a date that is not within thirty (30) days before or more than sixty
(60) days after such anniversary date, notice by the stockholder to be timely must be so received not earlier than the close of business on the 120th day prior to such annual meeting and not later than the close of business on the later of
(i) the 90th day prior to such annual meeting and (ii) the tenth day following the day on which public announcement of the date of such annual meeting is first made. The adjournment of a stockholders meeting does not commence a new time
period for the giving of a stockholders notice as described above. To be in proper form, a stockholders notice must provide the following information:



| |  |  | the stockholders intent to nominate one or more persons for election as a director of the corporation, the name of each such nominee proposed by the
stockholder giving the notice, and the reason for making such nomination at the annual meeting;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the name and address, as they appear on the corporations books, of the stockholder of record proposing such business and of each beneficial owner or other
person, if any, on whose behalf the stockholder of record is delivering the notice (each such stockholder, beneficial owner and other person, a Nominating Person);
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the class and number of shares of the corporation that are owned beneficially or of record by each Nominating Person;
| | - |  | ---------------------------------------------------------------------------------------------------------------------



| |  |  | whether or not any hedging or other transaction or series of related transactions has been entered into by or on behalf of, or any other agreement, arrangement or
understanding (including any short position or any borrowing of shares) has been made, the effect or intent of which is to mitigate loss or manage the risk or benefit of share price changes for, or to increase or decrease the voting power of, such
Nominating Person with respect to any securities of the corporation;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | any material interest of the Nominating Person in such nomination;
| | - |  | ------------------------------------------------------------------



| |  |  | a description of all arrangements or understandings between or among any of any Nominating Person, each nominee, and any other person or persons (naming such person
or persons) pursuant to which the nomination or nominations are to be made by a Nominating Person;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | such other information regarding each Nominating Person and each nominee proposed by the Nominating Person as would be required to be disclosed in a proxy statement
or other filings required to be made in connection with the solicitations or proxies for election of directors, or would be otherwise required, in each case pursuant to Section 14 of the 1934 Act and the rules and regulations promulgated
thereunder;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the signed consent of each nominee proposed by the stockholder giving the notice to serve as a director of the corporation if so elected and a written statement
executed by such nominee acknowledging that,
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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| | as a director of such corporation, such person will owe a fiduciary duty, under the General Corporation Law of the State of Delaware, exclusively to the
corporation and its stockholders; and
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | as to each person, if any, whom the Nominating Person proposes to nominate for election or re-election as a director: the name, age, business address and residence
address of such person, the principal occupation or employment of such person, the class and number of shares of the corporation which are beneficially owned by such person, a description in reasonable detail of any hedging or other transaction or
series of related transactions has been entered into by or on behalf of, or any other agreement, arrangement or understanding (including any short position or any borrowing of shares) has been made, the effect or intent of which is to mitigate loss
or manage the risk or benefit of share price changes for, or to increase or decrease the voting power of, such person with respect to any securities of the corporation, and any material interest of the nominee in such nomination.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Additionally, we have the right to request that a proposing person or a Nominating Person update the information
required to be provided pursuant to the bylaws as of the record date for the applicable meeting of stockholders.

The foregoing description
of the bylaw amendments is qualified in its entirety by reference to the full text of our bylaws, as amended, which was filed with the SEC on June 18, 2008 on Form 8-K. Our bylaws which contain a complete description of the procedures for
recommending a nominee to the Board of Directors are also available on our website under Corporate Governance at http://www.tibco.com/company/investor_info/corporate_governance/bylaws.



|ITEM 11. | EXECUTIVE COMPENSATION
|-------- | ----------------------

The information required by
this item is incorporated by reference to the sections entitled Compensation Discussion & Analysis, Election of DirectorsFiscal Year 2008 Director Compensation, Compensation Committee
MattersCommittee Interlocks and Insider Participation and Compensation Committee MattersCompensation Committee Report in our Proxy Statement for the 2009 Annual Meeting of Stockholders to be filed with the SEC within
120 days after the end of our fiscal year ended November 30, 2008.



|ITEM 12. | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
|-------- | ----------------------------------------------------------------------------------------------

The information required by this item regarding security ownership of certain beneficial owners and management is incorporated by reference to the section
entitled Security Ownership of Certain Beneficial Owners and Management in our Proxy Statement for the 2009 Annual Meeting of Stockholders to be filed with the SEC within 120 days after the end of our fiscal year ended November 30,
2008.

The information required by this item regarding equity compensation plans is incorporated by reference to the section entitled
Equity Compensation Plan Information set forth in Item 5 of this Annual Report on Form 10-K.



|ITEM 13. | CERTAIN RELATIONSHIPS, RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE
|-------- | ---------------------------------------------------------------------

Certain Relationships and Related Party Transactions

The information required by this item regarding certain relationships
and related party transactions is incorporated by reference to the section entitled Certain Relationships and Related Party Transactions Disclosure in our Proxy Statement for the 2009 Annual Meeting of Stockholders to be filed with the
SEC within 120 days after the end of our fiscal year ended November 30, 2008.



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Director Independence

The information required by this item regarding director independence is incorporated by reference to the section entitled Election of Directors in our Proxy Statement for the 2009 Annual Meeting of
Stockholders to be filed with the SEC within 120 days after the end of our fiscal year ended November 30, 2008.



|ITEM 14. | PRINCIPAL ACCOUNTING FEES AND SERVICES
|-------- | --------------------------------------

The
information required by this item is incorporated by reference to the section entitled Audit Committee MattersFees Paid to the Independent Auditors and Audit Committee MattersAudit Committee Pre-Approval of Audit and
Non-Audit Services of the Independent Auditor in our Proxy Statement for the 2009 Annual Meeting of Stockholders to be filed with the SEC within 120 days after the end of our fiscal year ended November 30, 2008.



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PART IV



|ITEM 15. | EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
|-------- | ------------------------------------------

(a) The
following documents are filed as part of this Annual Report on Form 10-K:

1. Financial
Statements.    Please see the accompanying Index to Consolidated Financial Statements, which appears on page F-1 of the Annual Report on Form 10-K. The Report of Independent Registered Public Accounting Firm, the Consolidated
Financial Statements and the Notes to Consolidated Financial Statements listed in the Index to Consolidated Financial Statements, which appear beginning on page F-2 of this Annual Report on Form 10-K, are incorporated by reference into Item 8
above.

2. Financial Statement Schedules.    Financial Statement Schedules have been omitted
because the information required to be set forth therein is either not applicable or is included in the Consolidated Financial Statements or the Notes to Consolidated Financial Statements.

3. Exhibits.    See Item 15(b) below. Each management contract and compensatory plan or arrangement
required to be filed has been identified.

(b) Exhibits.    The exhibits listed on the accompanying Exhibit
Index immediately following the signature page are filed as part of, or are incorporated by reference into, this Annual Report on Form 10-K.

(c) Financial Statement Schedules.    Reference is made to Item 15(a)(2) above.



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TIBCO SOFTWARE INC.

INDEX TO THE CONSOLIDATED FINANCIAL STATEMENTS



|                                                                                |  |     
|------------------------------------------------------------------------------- |  | ----
|                                                                                |  | Page
|                                                                                | 
|Report of Independent Registered Public Accounting Firm                         |  | F-2 
|                                                                                | 
|Consolidated Balance Sheets                                                     |  | F-3 
|                                                                                | 
|Consolidated Statements of Operations                                           |  | F-4 
|                                                                                | 
|Consolidated Statements of Stockholders Equity and Comprehensive Income (Loss) |  | F-5 
|                                                                                | 
|Consolidated Statements of Cash Flows                                           |  | F-6 
|                                                                                | 
|Notes to Consolidated Financial Statements                                      |  | F-7 



F-1



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##### Table of Contents

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of

TIBCO Software Inc.:

In our opinion, the accompanying Consolidated Balance Sheets and the related Consolidated Statements of Operations, Consolidated
Statements of Stockholders Equity and Comprehensive Income (Loss) and Consolidated Statements of Cash Flows listed in the Index to the Consolidated Financial Statements of TIBCO Software Inc., present fairly, in all material respects, the
financial position of TIBCO Software Inc. and its subsidiaries at November 30, 2008 and November 30, 2007, and the results of their operations and their cash flows for each of the three years in the period ended November 30, 2008 in
conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of November 30, 2008, 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 these financial statements, for
maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in Managements Report on Internal Control over Financial Reporting appearing
under Item 9A of this Annual Report on Form 10-K. Our responsibility is to express opinions on these financial statements and on the Companys internal control over financial reporting based on our integrated 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 audits to obtain reasonable assurance about whether the financial statements are free of
material misstatement and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the financial statements included examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our audit of internal control over financial reporting
included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk.
Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

As discussed in Note 2 to the Consolidated Financial Statements, effective December 1, 2007, the Company changed the manner in which it accounts for
uncertain tax positions and its methods of accounting for fair value measurements.

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 (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the
assets of the company; (ii) 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 (iii) 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.

/s/    PRICEWATERHOUSECOOPERS
LLP

San Jose, California

January 27, 2009



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##### Table of Contents

TIBCO SOFTWARE INC.

CONSOLIDATED BALANCE SHEETS

(In
thousands, except par value)



|                                                                                                                                    |  |              |           |   |      |   |          
|----------------------------------------------------------------------------------------------------------------------------------- |  | ------------ | --------- | - | ---- | - | ---------
|                                                                                                                                    |  | November 30,
|                                                                                                                                    |  | 2008         |           |   | 2007
|Assets                                                                                                                              |  |              |           |   |      |   |          
|Current assets:                                                                                                                     |  |              |           |   |      |   |          
|Cash and cash equivalents                                                                                                           |  | $            | 254,400   |   |      | $ | 170,237  
|Short-term investments                                                                                                              |  |              | 13,073    |   |      |   | 95,534   
|Accounts receivable, net of allowances of $4,369 in 2008 and $4,259 in 2007                                                         |  |              | 133,191   |   |      |   | 161,730  
|Prepaid expenses and other current assets                                                                                           |  |              | 49,994    |   |      |   | 53,540   
|                                                                                                                                    |  |              |           |   |      |   |          
|Total current assets                                                                                                                |  |              | 450,658   |   |      |   | 481,041  
|Property and equipment, net                                                                                                         |  |              | 103,531   |   |      |   | 111,390  
|Goodwill                                                                                                                            |  |              | 343,942   |   |      |   | 412,256  
|Acquired intangible assets, net                                                                                                     |  |              | 80,437    |   |      |   | 110,930  
|Long-term deferred income tax assets                                                                                                |  |              | 70,135    |   |      |   | 35,307   
|Other assets                                                                                                                        |  |              | 39,865    |   |      |   | 47,535   
|                                                                                                                                    |  |              |           |   |      |   |          
|Total assets                                                                                                                        |  | $            | 1,088,568 |   |      | $ | 1,198,459
|                                                                                                                                    |  |              |           |   |      |   |          
|Liabilities and Stockholders Equity                                                                                                |  |              |           |   |      |   |          
|Current liabilities:                                                                                                                |  |              |           |   |      |   |          
|Accounts payable                                                                                                                    |  | $            | 15,030    |   |      | $ | 12,076   
|Accrued liabilities                                                                                                                 |  |              | 90,980    |   |      |   | 95,526   
|Accrued restructuring and excess facilities costs                                                                                   |  |              | 6,572     |   |      |   | 5,421    
|Deferred revenue                                                                                                                    |  |              | 140,221   |   |      |   | 127,200  
|Current portion of long-term debt                                                                                                   |  |              | 2,033     |   |      |   | 1,924    
|                                                                                                                                    |  |              |           |   |      |   |          
|Total current liabilities                                                                                                           |  |              | 254,836   |   |      |   | 242,147  
|Accrued excess facilities costs, less current portion                                                                               |  |              | 5,594     |   |      |   | 10,811   
|Long-term deferred revenue                                                                                                          |  |              | 12,007    |   |      |   | 14,319   
|Long-term deferred income tax liabilities                                                                                           |  |              | 15,329    |   |      |   | 25,821   
|Long-term income tax liabilities                                                                                                    |  |              | 12,439    |   |      |   |         
|Long-term debt, less current portion                                                                                                |  |              | 42,525    |   |      |   | 44,558   
|Other long-term liabilities                                                                                                         |  |              | 3,837     |   |      |   | 5,006    
|                                                                                                                                    |  |              |           |   |      |   |          
|Total liabilities                                                                                                                   |  |              | 346,567   |   |      |   | 342,662  
|                                                                                                                                    |  |              |           |   |      |   |          
|Commitments and contingencies (Note 11)                                                                                             |  |              |           |   |      |   |          
|                                                                                                                                    |  |             
|Minority interest                                                                                                                   |  |              | 358       |   |      |   | 401      
|                                                                                                                                    |  |             
|Stockholders' equity:                                                                                                               |  |              |           |   |      |   |          
|Common stock, $0.001 par value; 1,200,000 shares authorized; 174,296 shares and 191,150 shares issued and outstanding,
respectively |  |              | 174       |   |      |   | 191      
|Additional paid-in capital                                                                                                          |  |              | 761,743   |   |      |   | 794,568  
|Accumulated other comprehensive income (loss)                                                                                       |  |              | (44,425   | ) |      |   | 32,993   
|Retained earnings                                                                                                                   |  |              | 24,151    |   |      |   | 27,644   
|                                                                                                                                    |  |              |           |   |      |   |          
|Total stockholders' equity                                                                                                          |  |              | 741,643   |   |      |   | 855,396  
|                                                                                                                                    |  |              |           |   |      |   |          
|Total liabilities and stockholders equity                                                                                          |  | $            | 1,088,568 |   |      | $ | 1,198,459
|                                                                                                                                    |  |              |           |   |      |   |          

See accompanying Notes to Consolidated Financial Statements



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TIBCO SOFTWARE INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)



|                                               |  |                         |         |   |      |   |         |      |  |   |         |  
|---------------------------------------------- |  | ----------------------- | ------- | - | ---- | - | ------- | ---- |  | - | ------- | -
|                                               |  | Year Ended November 30, |        
|                                               |  | 2008                    |         |   | 2007 |   |         | 2006 | 
|Revenue:                                       |  |                         |         |   |      |   |         |      |  |   |         |  
|License revenue                                |  | $                       | 273,415 |   |      | $ | 259,313 |      |  | $ | 240,071 |  
|Service and maintenance revenue                |  |                         | 371,056 |   |      |   | 318,073 |      |  |   | 277,208 |  
|                                               |  |                         |         |   |      |   |         |      |  |   |         |  
|Total revenue                                  |  |                         | 644,471 |   |      |   | 577,386 |      |  |   | 517,279 |  
|                                               |  |                         |         |   |      |   |         |      |  |   |         |  
|Cost of revenue:                               |  |                         |         |   |      |   |         |      |  |   |         |  
|License                                        |  |                         | 30,276  |   |      |   | 24,024  |      |  |   | 15,936  |  
|Service and maintenance                        |  |                         | 147,622 |   |      |   | 134,877 |      |  |   | 117,745 |  
|                                               |  |                         |         |   |      |   |         |      |  |   |         |  
|Total cost of revenue                          |  |                         | 177,898 |   |      |   | 158,901 |      |  |   | 133,681 |  
|                                               |  |                         |         |   |      |   |         |      |  |   |         |  
|Gross profit                                   |  |                         | 466,573 |   |      |   | 418,485 |      |  |   | 383,598 |  
|Operating expenses:                            |  |                         |         |   |      |   |         |      |  |   |         |  
|Research and development                       |  |                         | 106,594 |   |      |   | 92,924  |      |  |   | 85,923  |  
|Sales and marketing                            |  |                         | 224,641 |   |      |   | 197,397 |      |  |   | 172,768 |  
|General and administrative                     |  |                         | 53,046  |   |      |   | 51,538  |      |  |   | 44,139  |  
|Restructuring adjustment                       |  |                         |        |   |      |   | (1,095  | )    |  |   | (1,042  | )
|Amortization of acquired intangible assets     |  |                         | 16,557  |   |      |   | 13,164  |      |  |   | 9,454   |  
|Acquired in-process research and development   |  |                         |        |   |      |   | 1,600   |      |  |   |        |  
|                                               |  |                         |         |   |      |   |         |      |  |   |         |  
|Total operating expenses                       |  |                         | 400,838 |   |      |   | 355,528 |      |  |   | 311,242 |  
|                                               |  |                         |         |   |      |   |         |      |  |   |         |  
|Income from operations                         |  |                         | 65,735  |   |      |   | 62,957  |      |  |   | 72,356  |  
|Interest income                                |  |                         | 9,115   |   |      |   | 18,447  |      |  |   | 19,936  |  
|Interest expense                               |  |                         | (3,238  | ) |      |   | (2,824  | )    |  |   | (3,171  | )
|Other income (expense), net                    |  |                         | (782    | ) |      |   | (1,181  | )    |  |   | 1,437   |  
|                                               |  |                         |         |   |      |   |         |      |  |   |         |  
|Income before provision for income taxes       |  |                         | 70,830  |   |      |   | 77,399  |      |  |   | 90,558  |  
|Provision for income taxes                     |  |                         | 18,314  |   |      |   | 25,401  |      |  |   | 17,694  |  
|Minority interest, net of tax                  |  |                         | 105     |   |      |   | 110     |      |  |   |        |  
|                                               |  |                         |         |   |      |   |         |      |  |   |         |  
|Net income                                     |  | $                       | 52,411  |   |      | $ | 51,888  |      |  | $ | 72,864  |  
|                                               |  |                         |         |   |      |   |         |      |  |   |         |  
|Net income per share:                          |  |                         |         |   |      |   |         |      |  |   |         |  
|Basic                                          |  | $                       | 0.29    |   |      | $ | 0.26    |      |  | $ | 0.35    |  
|                                               |  |                         |         |   |      |   |         |      |  |   |         |  
|Diluted                                        |  | $                       | 0.29    |   |      | $ | 0.25    |      |  | $ | 0.33    |  
|                                               |  |                         |         |   |      |   |         |      |  |   |         |  
|Shares used in computing net income per share: |  |                         |         |   |      |   |         |      |  |   |         |  
|Basic                                          |  |                         | 180,525 |   |      |   | 198,885 |      |  |   | 209,538 |  
|                                               |  |                         |         |   |      |   |         |      |  |   |         |  
|Diluted                                        |  |                         | 183,742 |   |      |   | 205,316 |      |  |   | 218,075 |  
|                                               |  |                         |         |   |      |   |         |      |  |   |         |  

See accompanying Notes to Consolidated Financial Statements



F-4



---

##### Table of Contents

TIBCO SOFTWARE INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY AND

COMPREHENSIVE INCOME (LOSS)

(In thousands)



|                                                                               |  |              |   |  |                          |     |   |                                 |   |          |                                            |  |   |                                      |   |  |                          |         |   |  |   |         |   |  |   |          |  
|------------------------------------------------------------------------------ |  | ------------ | - |  | ------------------------ | --- | - | ------------------------------- | - | -------- | ------------------------------------------ |  | - | ------------------------------------ | - |  | ------------------------ | ------- | - |  | - | ------- | - |  | - | -------- | -
|                                                                               |  | Common Stock |   |  | AdditionalPaid-inCapital |     |   | UnearnedStock-BasedCompensation |   |          | AccumulatedOtherComprehensiveIncome (Loss) |  |   | RetainedEarnings(AccumulatedDeficit) |   |  | TotalStockholdersEquity |        
|                                                                               |  |              |   |  |                         
|                                                                               |  | Shares       |   |  | Amount                   |     |   |                                 |   |          |                                           
|Balances, November 30, 2005                                                    |  | 210,548      |   |  | $                        | 211 |   |                                 | $ | 928,830  |                                            |  | $ | (123                                 | ) |  | $                        | (14,346 | ) |  | $ | (40,953 | ) |  | $ | 873,619  |  
|Components of comprehensive income:                                            |  |              |   |  |                          |     |   |                                 |   |          |                                            |  |   |                                      |   |  |                          |         |   |  |   |         |   |  |   |          |  
|Net income                                                                     |  |             |   |  |                          |    |   |                                 |   |         |                                            |  |   |                                     |   |  |                          |        |   |  |   | 72,864  |   |  |   | 72,864   |  
|Foreign currency translation adjustment, net of $(5,759) tax effects           |  |             |   |  |                          |    |   |                                 |   |         |                                            |  |   |                                     |   |  |                          | 23,451  |   |  |   |        |   |  |   | 23,451   |  
|Unrealized gain on investments, no tax                                         |  |             |   |  |                          |    |   |                                 |   |         |                                            |  |   |                                     |   |  |                          | 1,704   |   |  |   |        |   |  |   | 1,704    |  
|                                                                               |  |              |   |  |                          |     |   |                                 |   |          |                                            |  |   |                                      |   |  |                          |         |   |  |   |         |   |  |   |          |  
|Comprehensive income                                                           |  |              |   |  |                          |     |   |                                 |   |          |                                            |  |   |                                      |   |  |                          |         |   |  |   |         |   |  |   | 98,019   |  
|                                                                               |  |              |   |  |                          |     |   |                                 |   |          |                                            |  |   |                                      |   |  |                          |         |   |  |   |         |   |  |   |          |  
|Common stock repurchased and retired                                           |  | (9,893       | ) |  |                          | (10 | ) |                                 |   | (71,449  | )                                          |  |   |                                     |   |  |                          |        |   |  |   | (6,213  | ) |  |   | (77,672  | )
|Common stock options exercised                                                 |  | 9,115        |   |  |                          | 9   |   |                                 |   | 20,268   |                                            |  |   |                                     |   |  |                          |        |   |  |   |        |   |  |   | 20,277   |  
|Common stock issued for employee stock purchase program                        |  | 261          |   |  |                          |    |   |                                 |   | 1,966    |                                            |  |   |                                     |   |  |                          |        |   |  |   |        |   |  |   | 1,966    |  
|Tax benefits from employee stock option plans                                  |  |             |   |  |                          |    |   |                                 |   | 13,980   |                                            |  |   |                                     |   |  |                          |        |   |  |   |        |   |  |   | 13,980   |  
|Stock-based compensation, net                                                  |  |             |   |  |                          |    |   |                                 |   | 15,818   |                                            |  |   |                                     |   |  |                          |        |   |  |   |        |   |  |   | 15,818   |  
|Transfer of unearned stock-based compensation upon adoption of SFAS No. 123(R) |  |             |   |  |                          |    |   |                                 |   | (123     | )                                          |  |   | 123                                  |   |  |                          |        |   |  |   |        |   |  |   |         |  
|Restricted stock awards                                                        |  | 1,177        |   |  |                          | 1   |   |                                 |   | (1       | )                                          |  |   |                                     |   |  |                          |        |   |  |   |        |   |  |   |         |  
|                                                                               |  |              |   |  |                          |     |   |                                 |   |          |                                            |  |   |                                      |   |  |                          |         |   |  |   |         |   |  |   |          |  
|Balances, November 30, 2006                                                    |  | 211,208      |   |  |                          | 211 |   |                                 |   | 909,289  |                                            |  |   |                                     |   |  |                          | 10,809  |   |  |   | 25,698  |   |  |   | 946,007  |  
|Components of comprehensive income:                                            |  |              |   |  |                          |     |   |                                 |   |          |                                            |  |   |                                      |   |  |                          |         |   |  |   |         |   |  |   |          |  
|Net income                                                                     |  |             |   |  |                          |    |   |                                 |   |         |                                            |  |   |                                     |   |  |                          |        |   |  |   | 51,888  |   |  |   | 51,888   |  
|Foreign currency translation adjustment, net of $(3,904) tax effects           |  |             |   |  |                          |    |   |                                 |   |         |                                            |  |   |                                     |   |  |                          | 21,514  |   |  |   |        |   |  |   | 21,514   |  
|Unrealized gain on investments, no tax                                         |  |             |   |  |                          |    |   |                                 |   |         |                                            |  |   |                                     |   |  |                          | 670     |   |  |   |        |   |  |   | 670      |  
|                                                                               |  |              |   |  |                          |     |   |                                 |   |          |                                            |  |   |                                      |   |  |                          |         |   |  |   |         |   |  |   |          |  
|Comprehensive income                                                           |  |              |   |  |                          |     |   |                                 |   |          |                                            |  |   |                                      |   |  |                          |         |   |  |   |         |   |  |   | 74,072   |  
|                                                                               |  |              |   |  |                          |     |   |                                 |   |          |                                            |  |   |                                      |   |  |                          |         |   |  |   |         |   |  |   |          |  
|Common stock repurchased and retired                                           |  | (25,575      | ) |  |                          | (25 | ) |                                 |   | (176,965 | )                                          |  |   |                                     |   |  |                          |        |   |  |   | (49,942 | ) |  |   | (226,932 | )
|Common stock options exercised                                                 |  | 3,995        |   |  |                          | 4   |   |                                 |   | 22,763   |                                            |  |   |                                     |   |  |                          |        |   |  |   |        |   |  |   | 22,767   |  
|Common stock issued for employee stock purchase program                        |  | 398          |   |  |                          |    |   |                                 |   | 2,945    |                                            |  |   |                                     |   |  |                          |        |   |  |   |        |   |  |   | 2,945    |  
|Tax benefits from employee stock option plans                                  |  |             |   |  |                          |    |   |                                 |   | 19,456   |                                            |  |   |                                     |   |  |                          |        |   |  |   |        |   |  |   | 19,456   |  
|Stock-based compensation, net                                                  |  |             |   |  |                          |    |   |                                 |   | 17,563   |                                            |  |   |                                     |   |  |                          |        |   |  |   |        |   |  |   | 17,563   |  
|Substitute options fair value adjustment in acquisition                        |  |             |   |  |                          |    |   |                                 |   | 187      |                                            |  |   |                                     |   |  |                          |        |   |  |   |        |   |  |   | 187      |  
|Restricted stock withholding taxes net-settlement                              |  | (85          | ) |  |                          |    |   |                                 |   | (669     | )                                          |  |   |                                     |   |  |                          |        |   |  |   |        |   |  |   | (669     | )
|Restricted stock awards                                                        |  | 1,209        |   |  |                          | 1   |   |                                 |   | (1       | )                                          |  |   |                                     |   |  |                          |        |   |  |   |        |   |  |   |         |  
|                                                                               |  |              |   |  |                          |     |   |                                 |   |          |                                            |  |   |                                      |   |  |                          |         |   |  |   |         |   |  |   |          |  
|Balances, November 30, 2007                                                    |  | 191,150      |   |  |                          | 191 |   |                                 |   | 794,568  |                                            |  |   |                                     |   |  |                          | 32,993  |   |  |   | 27,644  |   |  |   | 855,396  |  
|Components of comprehensive income:                                            |  |              |   |  |                          |     |   |                                 |   |          |                                            |  |   |                                      |   |  |                          |         |   |  |   |         |   |  |   |          |  
|Net income                                                                     |  |             |   |  |                          |    |   |                                 |   |         |                                            |  |   |                                     |   |  |                          |        |   |  |   | 52,411  |   |  |   | 52,411   |  
|Foreign currency translation adjustment, net of $19,604 tax effects            |  |             |   |  |                          |    |   |                                 |   |         |                                            |  |   |                                     |   |  |                          | (77,087 | ) |  |   |        |   |  |   | (77,087  | )
|Unrealized loss on investments, no tax                                         |  |             |   |  |                          |    |   |                                 |   |         |                                            |  |   |                                     |   |  |                          | (331    | ) |  |   |        |   |  |   | (331     | )
|                                                                               |  |              |   |  |                          |     |   |                                 |   |          |                                            |  |   |                                      |   |  |                          |         |   |  |   |         |   |  |   |          |  
|Comprehensive loss                                                             |  |              |   |  |                          |     |   |                                 |   |          |                                            |  |   |                                      |   |  |                          |         |   |  |   |         |   |  |   | (25,007  | )
|                                                                               |  |              |   |  |                          |     |   |                                 |   |          |                                            |  |   |                                      |   |  |                          |         |   |  |   |         |   |  |   |          |  
|Adjustment to accumulated retained earnings upon adoption of FIN 48            |  |             |   |  |                          |    |   |                                 |   |         |                                            |  |   |                                     |   |  |                          |        |   |  |   | 605     |   |  |   | 605      |  
|Common stock repurchased and retired                                           |  | (21,271      | ) |  |                          | (21 | ) |                                 |   | (92,459  | )                                          |  |   |                                     |   |  |                          |        |   |  |   | (56,509 | ) |  |   | (148,989 | )
|Common stock options exercised                                                 |  | 2,059        |   |  |                          | 2   |   |                                 |   | 8,610    |                                            |  |   |                                     |   |  |                          |        |   |  |   |        |   |  |   | 8,612    |  
|Common stock issued for employee stock purchase program                        |  | 546          |   |  |                          |    |   |                                 |   | 3,555    |                                            |  |   |                                     |   |  |                          |        |   |  |   |        |   |  |   | 3,555    |  
|Tax benefits from employee stock option plans                                  |  |             |   |  |                          |    |   |                                 |   | 27,025   |                                            |  |   |                                     |   |  |                          |        |   |  |   |        |   |  |   | 27,025   |  
|Stock-based compensation, net                                                  |  |             |   |  |                          |    |   |                                 |   | 20,972   |                                            |  |   |                                     |   |  |                          |        |   |  |   |        |   |  |   | 20,972   |  
|Stock options assumed during the acquisition                                   |  |             |   |  |                          |    |   |                                 |   | 1,011    |                                            |  |   |                                     |   |  |                          |        |   |  |   |        |   |  |   | 1,011    |  
|Restricted stock withholding taxes net-settlement                              |  | (185         | ) |  |                          |    |   |                                 |   | (1,537   | )                                          |  |   |                                     |   |  |                          |        |   |  |   |        |   |  |   | (1,537   | )
|Restricted stock awards                                                        |  | 1,997        |   |  |                          | 2   |   |                                 |   | (2       | )                                          |  |   |                                     |   |  |                          |        |   |  |   |        |   |  |   |         |  
|                                                                               |  |              |   |  |                          |     |   |                                 |   |          |                                            |  |   |                                      |   |  |                          |         |   |  |   |         |   |  |   |          |  
|Balances, November 30, 2008                                                    |  | 174,296      |   |  | $                        | 174 |   |                                 | $ | 761,743  |                                            |  | $ |                                     |   |  | $                        | (44,425 | ) |  | $ | 24,151  |   |  | $ | 741,643  |  
|                                                                               |  |              |   |  |                          |     |   |                                 |   |          |                                            |  |   |                                      |   |  |                          |         |   |  |   |         |   |  |   |          |  

See accompanying Notes to Consolidated Financial Statements



F-5



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##### Table of Contents

TIBCO SOFTWARE INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)



|                                                                                  |  |                         |          |   |      |   |          |      |  |   |          |  
|--------------------------------------------------------------------------------- |  | ----------------------- | -------- | - | ---- | - | -------- | ---- |  | - | -------- | -
|                                                                                  |  | Year Ended November 30, |         
|                                                                                  |  | 2008                    |          |   | 2007 |   |          | 2006 | 
|Operating activities:                                                             |  |                         |          |   |      |   |          |      |  |   |          |  
|Net income                                                                        |  | $                       | 52,411   |   |      | $ | 51,888   |      |  | $ | 72,864   |  
|Adjustments to reconcile net income to net cash provided by operating activities: |  |                         |          |   |      |   |          |      |  |   |          |  
|Depreciation of property and equipment                                            |  |                         | 15,814   |   |      |   | 16,167   |      |  |   | 15,641   |  
|Amortization of acquired intangible assets                                        |  |                         | 32,302   |   |      |   | 23,490   |      |  |   | 14,776   |  
|Stock-based compensation                                                          |  |                         | 20,972   |   |      |   | 17,563   |      |  |   | 15,818   |  
|Acquired in-process research and development                                      |  |                         |         |   |      |   | 1,600    |      |  |   |         |  
|Deferred income tax                                                               |  |                         | (26,194  | ) |      |   | (6,077   | )    |  |   | (19,549  | )
|Tax benefits related to employee stock option plans                               |  |                         | 27,025   |   |      |   | 19,456   |      |  |   | 24,695   |  
|Excess tax benefits from stock-based compensation                                 |  |                         | (24,713  | ) |      |   | (17,980  | )    |  |   | (21,482  | )
|Minority interest, net of tax                                                     |  |                         | 105      |   |      |   | 110      |      |  |   |         |  
|Other non-cash adjustments, net                                                   |  |                         | 991      |   |      |   | (1,506   | )    |  |   | (799     | )
|Changes in assets and liabilities, net of effects of acquisitions:                |  |                         |          |   |      |   |          |      |  |   |          |  
|Accounts receivable                                                               |  |                         | 20,683   |   |      |   | (5,459   | )    |  |   | (28,002  | )
|Due from related parties, net                                                     |  |                         |         |   |      |   |         |      |  |   | 1,243    |  
|Prepaid expenses and other assets                                                 |  |                         | 9,060    |   |      |   | (4,778   | )    |  |   | (4,935   | )
|Accounts payable                                                                  |  |                         | 3,531    |   |      |   | (885     | )    |  |   | 3,008    |  
|Accrued liabilities and excess facilities costs                                   |  |                         | 12,528   |   |      |   | (8,613   | )    |  |   | 8,559    |  
|Deferred revenue                                                                  |  |                         | 7,977    |   |      |   | 17,304   |      |  |   | 24,113   |  
|                                                                                  |  |                         |          |   |      |   |          |      |  |   |          |  
|Net cash provided by operating activities                                         |  |                         | 152,492  |   |      |   | 102,280  |      |  |   | 105,950  |  
|                                                                                  |  |                         |          |   |      |   |          |      |  |   |          |  
|Investing activities:                                                             |  |                         |          |   |      |   |          |      |  |   |          |  
|Purchases of short-term investments                                               |  |                         | (37,047  | ) |      |   | (140,928 | )    |  |   | (407,639 | )
|Maturities and sales of short-term investments                                    |  |                         | 124,032  |   |      |   | 450,311  |      |  |   | 277,588  |  
|Acquisitions, net of cash acquired                                                |  |                         | (20,098  | ) |      |   | (182,912 | )    |  |   |         |  
|Purchases of private equity investments                                           |  |                         | (38      | ) |      |   | (63      | )    |  |   | (82      | )
|Proceeds from sales of private equity investments                                 |  |                         | 347      |   |      |   | 803      |      |  |   | 1,488    |  
|Purchases of property and equipment                                               |  |                         | (8,937   | ) |      |   | (12,599  | )    |  |   | (12,974  | )
|Restricted cash pledged as security                                               |  |                         | 652      |   |      |   | 368      |      |  |   | (1,506   | )
|                                                                                  |  |                         |          |   |      |   |          |      |  |   |          |  
|Net cash provided by (used in) investing activities                               |  |                         | 58,911   |   |      |   | 114,980  |      |  |   | (143,125 | )
|                                                                                  |  |                         |          |   |      |   |          |      |  |   |          |  
|Financing activities:                                                             |  |                         |          |   |      |   |          |      |  |   |          |  
|Proceeds from issuance of common stock                                            |  |                         | 12,167   |   |      |   | 25,712   |      |  |   | 22,243   |  
|Repurchases of the Companys common stock                                         |  |                         | (148,989 | ) |      |   | (226,932 | )    |  |   | (77,672  | )
|Withholding taxes related to restricted stock net share settlement                |  |                         | (1,537   | ) |      |   | (669     | )    |  |   |         |  
|Excess tax benefits from stock-based compensation                                 |  |                         | 24,713   |   |      |   | 17,980   |      |  |   | 21,482   |  
|Principal payments on long-term debt                                              |  |                         | (1,924   | ) |      |   | (6,277   | )    |  |   | (1,798   | )
|Proceeds from minority investors                                                  |  |                         |         |   |      |   | 189      |      |  |   |         |  
|                                                                                  |  |                         |          |   |      |   |          |      |  |   |          |  
|Net cash used in financing activities                                             |  |                         | (115,570 | ) |      |   | (189,997 | )    |  |   | (35,745  | )
|                                                                                  |  |                         |          |   |      |   |          |      |  |   |          |  
|Effect of foreign exchange rate changes on cash and cash equivalents              |  |                         | (11,670  | ) |      |   | 4,062    |      |  |   | 3,076    |  
|Net increase (decrease) in cash and cash equivalents                              |  |                         | 84,163   |   |      |   | 31,325   |      |  |   | (69,844  | )
|Cash and cash equivalents at beginning of year                                    |  |                         | 170,237  |   |      |   | 138,912  |      |  |   | 208,756  |  
|                                                                                  |  |                         |          |   |      |   |          |      |  |   |          |  
|Cash and cash equivalents at end of year                                          |  | $                       | 254,400  |   |      | $ | 170,237  |      |  | $ | 138,912  |  
|                                                                                  |  |                         |          |   |      |   |          |      |  |   |          |  
|Supplemental disclosures:                                                         |  |                         |          |   |      |   |          |      |  |   |          |  
|Interest paid                                                                     |  | $                       | 2,508    |   |      | $ | 2,489    |      |  | $ | 2,627    |  
|                                                                                  |  |                         |          |   |      |   |          |      |  |   |          |  
|Income taxes paid                                                                 |  | $                       | 12,604   |   |      | $ | 12,098   |      |  | $ | 15,083   |  
|                                                                                  |  |                         |          |   |      |   |          |      |  |   |          |  
|Supplemental disclosures of non-cash investing and financing activities:          |  |                         |          |   |      |   |          |      |  |   |          |  
|Non-cash contributions from minority investors                                    |  | $                       |         |   |      | $ | 85       |      |  | $ |         |  
|                                                                                  |  |                         |          |   |      |   |          |      |  |   |          |  

See accompanying Notes to Consolidated Financial Statements



F-6



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##### Table of Contents

TIBCO SOFTWARE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.    Business

TIBCO Software Inc.
(TIBCO, the Company, we or us) is a leading provider of infrastructure software. We provide a broad range of standards-based infrastructure software solutions that help organizations achieve the
benefits of real-time business. Our infrastructure software gives customers the ability to constantly innovate by connecting applications and data in a service-oriented architecture, streamlining activities through business process management, and
giving people the information and intelligence tools they need to make faster and smarter decisions, what we call The Power of Now®.

2.    Summary of Significant Accounting Policies

Principles of Consolidation

The Consolidated Financial Statements include the accounts of the Company and its
wholly-owned and majority-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. For majority-owned subsidiaries, we reflect the minority interest of the portion we do not own on our
Consolidated Balance Sheets between Total Liabilities and Stockholders Equity.

Fiscal Years

Our fiscal year is a twelve month period ending on November 30 of a stated year. For the purpose of presentation, we also refer to the fiscal years
ended November 30, 2008, 2007 and 2006, as our fiscal years 2008, 2007 and 2006, respectively.

Use of Estimates

The preparation of the Consolidated Financial Statements in conformity with generally accepted accounting principles in the United States of America
requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and
expenses during the reporting period. Actual results could differ from those estimates.

Revenue Recognition

License revenue consists principally of revenue earned under software license agreements. License revenue is generally recognized when a signed contract
or other persuasive evidence of an arrangement exists, the software has been shipped or electronically delivered, the license fee is fixed or determinable and collection of the resulting receivable is probable. When contracts contain multiple
elements wherein Vendor-Specific Objective Evidence (VSOE) exists for all undelivered elements, we account for the delivered elements in accordance with the Residual Method prescribed by the American Institute of Certified
Public Accountants (AICPA) Statement of Position (SOP) No. 98-9, Modification of SOP-97-2, Software Revenue Recognition, With Respect to Certain Transactions. Revenue from subscription license agreements,
which include software, rights to unspecified future products and maintenance, is recognized ratably over the term of the subscription period. For term licenses, we recognize the entire arrangement fee ratably over the license term when the renewal
rate or period is not substantive compared to the term license.

In general, maintenance and support obligations are based on separately
stated renewal rates in the arrangement that are deemed substantive and therefore represent VSOE of fair value. For arrangements that do not have a substantive stated renewal rate, we rely on VSOE of fair value of maintenance and support and
therefore we account for the delivered elements in accordance with the Residual Method.



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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)



Provided all other revenue criteria are met, the upfront, minimum, non-refundable license fees from
OEM customers are generally recognized upon delivery and on-going royalty fees are generally recognized upon reports of units shipped. Revenue on shipments to resellers is recognized when evidence of an end user arrangement exists and recorded net
of related costs to the resellers.

Professional services revenue consists primarily of revenue received for assisting with the
implementation of our software, on-site support, training and other consulting services. Many customers who license our software also enter into separate professional services arrangements with the Company. In determining whether professional
services revenue should be accounted for separately from license revenue, we evaluate, among other factors: the nature of our software products; whether they are ready for use by the customer upon receipt; the nature of our implementation services,
which typically do not involve significant customization to or development of the underlying software code; the availability of services from other vendors; whether the timing of payments for license revenue is coincident with performance of
services; and whether milestones or acceptance criteria exist that affect the realizability of the software license fee. Substantially all of our professional services arrangements are billed on a time and materials basis and, accordingly, are
recognized as the services are performed. Contracts with fixed or not-to-exceed fees are recognized on a proportional performance basis. If there is significant uncertainty about the project completion or receipt of payment for professional
services, revenue is deferred until the uncertainty is sufficiently resolved. Training revenue is recognized as training services are delivered. VSOE of fair value of consulting and training services is based upon stand-alone sales of those
services. Payments received in advance of consulting or training services performed are deferred and recognized when the related services are performed. Our service and maintenance revenue includes reimbursable expenses of $9.2 million, $7.6 million
and $7.3 million in fiscal years 2008, 2007 and 2006, respectively.

For arrangements that do not qualify for separate accounting for the
license and professional services revenues, including arrangements that involve significant modification or customization of the software, that include milestones or customer specific acceptance criteria that may affect collection of the software
license fees, or where payment for the software license is tied to the performance of professional services, software license revenue is generally recognized together with the professional services revenue using either the percentage-of-completion
or completed-contract method. Under the percentage-of-completion method, revenue recognized is equal to the ratio of costs expended to date to the anticipated total contract costs, based on current estimates of costs to complete the project. If the
total estimated costs to complete a project exceed the total contract amount, indicating a loss, the entire anticipated loss would be recognized currently.

Maintenance revenue consists of fees for providing software updates on a when and if available basis and technical support for software products (post-contract customer support or PCS).
Maintenance revenue is recognized ratably over the term of the agreement.

Payments received in advance of services performed are deferred.
Allowances for estimated future returns and discounts are provided for upon recognition of revenue.

Fair Value of Financial Instruments

Carrying amounts of our financial instruments including accounts receivable, accounts payable and accrued liabilities approximate fair
value due to their short maturities. The fair values of our cash equivalents, available-for-sale investments in marketable securities and derivative instruments are detailed further in Note 4.



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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)



Concentration of Credit Risk

Our cash, cash equivalents, short-term investments and accounts receivable are potentially subject to concentration of credit risk. Cash, cash equivalents
and investments are deposited with financial institutions that management believes are creditworthy. Our accounts receivable are derived from revenue earned from customers located primarily in the United States and Europe. We perform ongoing credit
evaluations of our customers financial condition and, generally, require no collateral from our customers. We maintain an allowance for doubtful accounts receivable based on various factors, including our review of credit profiles of our
customers, contractual terms and conditions, current economic trends and historical payment experience; see Note 5 for further details. We do not expect to incur material losses with respect to financial instruments that potentially subject the
Company to concentration of credit risk.

No customer accounted for more than 10% of total revenue in fiscal years 2008, 2007 or 2006. No
customer had a balance in excess of 10% of our net accounts receivable as of November 30, 2008 or 2007.

Cash, Cash Equivalents, and Short-Term
Investments

We consider all highly liquid investment securities with remaining maturities at the date of purchase of three months
or less to be cash equivalents. Management determines the appropriate classification of marketable securities at the time of purchase and evaluates such designation as of each balance sheet date. To date, all marketable securities have been
classified as available-for-sale and are carried at fair value with unrealized gains and losses, if any, included as a component of Accumulated Other Comprehensive Income (Loss) in Stockholders Equity. These available-for-sale investments are
presented as Current Assets as they are subject to use within one year in current operations. Interest, dividends, realized gains and losses and impairment losses are included in Interest Income and Other Income (Expense). Realized gains and losses
and impairment losses are recognized based on the specific identification method.

Valuation and Impairment of Short-Term Investments

We monitor our investment portfolio for impairment on a periodic basis. In the event that the carrying value of an investment
exceeds its fair value and the decline in value is determined to be other-than-temporary, an impairment charge is recorded and a new cost basis for the investment is established. In order to determine whether a decline in value is
other-than-temporary, we evaluate, among other factors: the duration and extent to which the fair value has been less than the carrying value; our financial condition and business outlook, including key operational and cash flow metrics, current
market conditions and future trends in the industry; our relative competitive position within the industry; and our intent and ability to retain the investment for a period of time sufficient to allow for any anticipated recovery in fair market
value.

Other Investments

We
have an investment in a venture capital fund which invests in privately held companies. This investment is carried at cost basis and is included in Other Assets on the Balance Sheets. The fair value of the funds investments is dependent on the
performance of the companies in which the fund is invested, as well as the volatility inherent in external markets for these companies. The determination of fair value is based on our assessment of the underlying portfolio held by the venture
capital fund. In assessing potential impairment, we consider these factors as well as each of the companies cash position, earnings/revenue outlook, liquidity and management/ownership. If we believe that an other-than-temporary decline exists,
we would record the related write-down as a loss on investments in our Consolidated Statements of Operations. The carrying value of our minority equity investments is $0.8 million and $0.9 million as of November 30, 2008 and 2007, respectively.



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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)



We believe the estimated fair value of the investment is approximately $1.3 million as of November 30, 2008. During the fiscal year 2006, we sold one of
our private equity investments and realized a net gain of $0.7 million. No impairment losses associated with our minority equity investment were incurred in the periods presented.

Property and Equipment

Property and equipment are stated at cost, net of accumulated
depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets as follows:



|                       |  |                                                       
|---------------------- |  | ------------------------------------------------------
|                       |  | Estimated useful lives                                
|Buildings              |  | 25 years                                              
|Equipment and software |  | 2  5 years                                           
|Furniture and fixtures |  | 5 years                                               
|Leasehold improvements |  | Shorter of the lease term or the estimated useful life

Depreciation expense for property and equipment was $15.8 million, $16.2 million and $15.6 million
in fiscal years 2008, 2007 and 2006, respectively.

Goodwill

In accordance with Statement of Financial Accounting Standards (SFAS) No. 142, Goodwill and Other Intangible Assets, (SFAS No. 142) goodwill and intangible assets with
indefinite useful lives are not amortized, but are tested for impairment at least annually or as circumstances indicate their value may no longer be recoverable. We do not have intangible assets with indefinite useful lives other than goodwill.
Goodwill impairment testing is a two-step process: first, we screen for impairment, and if any possible impairment exists, we then undertake a second step of measuring such impairment. We generally perform our goodwill impairment test annually in
our fourth fiscal quarter, and the last impairment test was completed for the fiscal year ended November 30, 2008. SFAS No. 142 requires impairment testing based on reporting units. We periodically re-evaluate our business and have
determined that we continue to operate in one segment, which we consider our sole reporting unit. Therefore, goodwill was tested and will continue to be tested for impairment at the enterprise level. To date, we have determined that there has been
no impairment of goodwill.

Impairment of Long-Lived Assets

We evaluate the recoverability of our long-lived assets which includes amortizable intangible and tangible assets in accordance with SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived
Assets. Our acquired intangible assets with definite useful lives are amortized over their useful lives. We evaluate long-lived assets, other than goodwill, for impairment whenever events or changes in circumstances indicate that the carrying
value of long-lived assets may not be recoverable. We recognize such impairment in the event the net book value of such assets exceeds the future undiscounted cash flows attributable to such assets. No long-lived assets impairment losses were
incurred in the fiscal years presented.

Restructuring and Integration Costs

Our restructuring charges are comprised primarily of costs related to properties abandoned in connection with facilities consolidation, related
write-downs of leasehold improvements and severance and associated employee termination costs related to headcount reductions. For restructuring actions initiated prior to December 31, 2002, we followed the guidance provided by Emerging Issues
Task Force (EITF) Issue No. 94-3, Liability Recognition for Certain Employee Termination Benefits and Other Costs To Exit an Activity



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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)



(Including Certain Costs Associated with a Restructuring) and EITF Issue No. 88-10, Costs Associated with Lease Modification or Termination.We recorded the liability related to these termination costs when the plan was approved and the period of time to implement the plan was set. For restructuring actions initiated after January 1, 2003, we adopted SFAS No. 146,
Accounting for Costs Associated with Exit or Disposal Activities, which requires that a liability for costs associated with an exit or disposal activity be recognized and measured initially at fair value only when the liability is incurred.

Our restructuring charges included accruals for estimated losses on excess facility costs based on our contractual obligations net of
estimated sublease income based on current comparable market rates for leases. We reassess this liability periodically based on market conditions. Revisions to our estimates of this liability could materially impact our operating results and
financial position in future periods if anticipated events and key assumptions, such as the timing and amounts of sublease rental income, either change or do not materialize.

Stock-Based Compensation

On December 1, 2005, the beginning of our fiscal year 2006, we
adopted SFAS No. 123 (revised 2004), Share-Based Payment(SFAS No. 123(R)), which requires the measurement and recognition of compensation expense for all stock-based awards based on estimated fair values. We elected to
use the modified prospective transition method as permitted by SFAS No. 123(R). Under this transition method, the post adoption stock-based compensation expense also includes expense for all stock-based awards granted prior to, but not yet
vested as of December 1, 2005, and the estimated fair values of which were established on the grant dates in accordance with the original provisions of SFAS No. 123, Accounting for Stock-Based Compensation. SFAS No. 123(R)
supersedes previous accounting under Accounting Principles Board Opinion (APB) No. 25, Accounting for Stock Issued to Employees, and also amends SFAS No. 95, Statement of Cash Flows.

Upon adoption of SFAS No. 123(R), we selected the Black-Scholes option pricing model as the most appropriate method for determining the estimated
fair value for stock-based awards. The Black-Scholes model requires the use of highly subjective and complex assumptions which determine the fair value of stock-based awards, including the options expected term and the price volatility of the
underlying stock. We determined that a blend of implied volatility and historical volatility is more reflective of the market conditions and a better indicator of expected volatility than solely using historical volatility. The value of the portion
of the post adoption award that is ultimately expected to vest is recognized as expense over the requisite service (vesting) periods on a straight-line basis in our Consolidated Statements of Operations and the expense has been reduced for estimated
forfeitures. SFAS No. 123(R) requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates.

Upon adoption of SFAS No. 123(R), we have elected the long form method for calculating the tax effects of stock-based compensation
pursuant to SFAS No. 123(R), paragraph 81. Under the long form method, we determined the beginning balance of the additional paid-in capital pool (APIC pool) related to the tax effects of the employee stock-based
compensation as if we had adopted the recognition provisions of SFAS No. 123 since its effective date of January 1, 1995. We also determined the subsequent impact on the APIC pool and Consolidated Statement of Cash Flows of the
tax effect of employee stockbased compensation awards that were issued after the adoption of SFAS No. 123(R) and outstanding at the adoption date.

Consistent with prior years, we use the with and without approach as described in EITF Topic No. D-32 in determining the order in which our tax attributes are utilized. The with and without
approach results in the recognition of the windfall stock option tax benefits only after all other tax attributes, except for pre-acquisition tax attributes of acquired entities, have been considered in the annual tax accrual computation. Also
consistent



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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)



with prior years, we consider the indirect effects of the windfall deduction on the computation of other tax attributes, such as the R&D credit
deduction, as an additional component of equity. This incremental tax effect is recorded to additional paid in capital when realized.

Income Taxes

We make certain estimates and judgments in determining income tax expense for financial statement purposes. These estimates and
judgments occur in the calculation of certain tax assets and liabilities, which arise from differences in the timing of recognition of revenue and expense for tax and financial statement purposes.

We assess the likelihood that we will be able to recover our deferred tax assets. We consider all available evidence, both positive and negative,
including historical levels of income, expectations and risks associated with estimates of future taxable income and ongoing prudent and feasible tax planning strategies in assessing the need for the valuation allowance. If it is not more likely
than not that we will recover our deferred tax assets, we will increase our provision for taxes by recording a valuation allowance against the deferred tax assets that we estimate will not ultimately be recoverable.

Foreign Currency

Our foreign subsidiaries,
with a few exceptions, use the local currency of their respective countries as their functional currency. Assets and liabilities of these subsidiaries are translated into U.S. dollars at exchange rates at the balance sheet date. Income and
expense items are translated at average exchange rates for the period. Cumulative translation adjustments are included as a component of Accumulated Other Comprehensive Income (Loss) in Stockholders Equity. Foreign currency exchange gains
and losses, derived from monetary assets and liabilities stated in a currency other than the functional currency, are recorded in the Consolidated Statements of Operations. We recorded foreign currency exchange gains and (losses) of $(1.1) million,
$(1.5) million and $0.8 million in fiscal years 2008, 2007 and 2006, respectively, in Other Income (Expense) in our Consolidated Statements of Operations.

Capitalized Software Development Costs

Costs related to research and development are generally charged to expense as
incurred. Capitalization of material software development costs begins when a products technological feasibility has been established in accordance with the provisions of SFAS No. 86, Accounting for the Costs of Computer Software to be
Sold, Leased, or Otherwise Marketed. To date, the period between achieving technological feasibility, which we have defined as the establishment of a working model, and which typically occurs when beta testing commences, and the general
availability of such software has been very short. Accordingly, software development costs have been expensed as incurred.

Costs related
to software acquired, developed or modified solely to meet our internal requirements and for which there are no substantive plans to market are capitalized in accordance with the provisions of AICPA SOP No. 98-1, Accounting for the Costs of
Computer Software Developed or Obtained for Internal Use. Costs incurred after the preliminary planning stage of the project and after management has authorized and committed funds to the project are capitalized. Costs capitalized for computer
software developed or obtained for internal use are included in Property and Equipment on the Consolidated Balance Sheets.

Advertising Expense

Advertising costs are expensed as incurred and totaled approximately $2.7 million, $1.1 million and $1.2 million in fiscal years
2008, 2007 and 2006, respectively.



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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)



Derivative Financial Instruments

We account for derivative instruments and hedging activities under SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities.
This statement establishes accounting and reporting standards for derivative instruments and requires recognition of all derivatives as assets or liabilities in the statement of financial position and measurement of those instruments at fair value.
Derivatives that are not hedges must be adjusted to fair value through earnings. If the derivative is a hedge, depending on the nature of the hedge, its change in fair value will either be offset against the change in fair value of the hedged asset
or liability, firm commitment through earnings or recognized in other comprehensive income (loss) until the hedged item is recognized in earnings.

To manage currency exposure related to net assets and liabilities denominated in foreign currencies, we enter into forward contracts for certain foreign denominated assets or liabilities. We do not enter into derivative financial
instruments for trading purposes. We had seven outstanding forward contracts with a total notional amount of $51.6 million as of November 30, 2008. These derivative instruments are not designed for hedge accounting and are adjusted to fair
value through Other Income (Expense) under the Consolidated Statements of Operations. The gain on fair value of these forward contracts as of November 30, 2008, was approximately $0.7 million.

The gains and losses on these derivative instruments are intended to offset the impact of foreign exchange rate changes on the underlying foreign
currency denominated assets and liabilities subject to remeasurement and transaction exposures, and therefore, these forward contracts do not subject us to material balance sheet risk. As of November 30, 2008, the outstanding balance sheet
hedging derivatives had maturities of approximately 30 days.

Recent Accounting Pronouncements

In May 2008, the Financial Accounting Standards Board (FASB) issued SFAS No. 162, The Hierarchy of Generally Accepted Accounting
Principles (SFAS No. 162). SFAS No. 162 identifies the sources of accounting principles and the framework for selecting the principles used in the preparation of financial statements of nongovernmental entities that are
presented in conformity with generally accepted accounting principles (the GAAP hierarchy). SFAS No. 162 will become effective 60 days following the SECs approval of the Public Company Accounting Oversight Board amendments to
AU Section 411, The Meaning of Present Fairly in Conformity With Generally Accepted Accounting Principles. We do not expect the adoption of SFAS No. 162 to have a material effect on our consolidated results of operations and
financial condition.

In March 2008, the FASB issued SFAS No. 161, Disclosures about Derivative Instruments and Hedging Activities,
an amendment of FASB Statement No. 133(SFAS No. 161). SFAS No. 161 applies to all derivative instruments and related hedged items accounted for under SFAS No. 133, Accounting for Derivative Instruments and
Hedging Activities. SFAS No. 161 requires entities to provide greater transparency about (a) how and why an entity uses derivative instruments, (b) how derivative instruments and related hedged items are accounted for under
SFAS No. 133 and its related interpretations, and (c) how derivative instruments and related hedged items affect an entitys financial position, results of operations and cash flows. SFAS No. 161 is effective for financial
statements issued for fiscal years and interim periods beginning after November 15, 2008, and will be adopted by us in the first quarter of fiscal 2009. We do not expect the adoption of SFAS No. 161 to have a material effect on our
consolidated results of operations and financial condition.

In December 2007, the FASB issued SFAS No. 141 (revised 2007),
Business Combinations (SFAS No. 141(R)). SFAS No. 141(R) establishes principles and requirements for how an acquirer recognizes and measures in its financial statements the identifiable assets acquired, the liabilities
assumed, any noncontrolling



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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)



interest in the acquiree and the goodwill acquired. SFAS No. 141(R) also establishes disclosure requirements to enable the evaluation of the nature and
financial effects of the business combination. SFAS No. 141(R) is effective for fiscal years beginning after December 15, 2008, and will be adopted by us in the first quarter of fiscal 2010. We continue to evaluate the potential impact of
the adoption of SFAS No. 141(R) on our consolidated results of operations and financial condition.

In December 2007, the FASB issued
SFAS No. 160, Noncontrolling Interests in Consolidated Financial Statements (SFAS No. 160). SFAS No. 160 amends Accounting Research Bulletin No. 51 to establish accounting and reporting standards for the
noncontrolling interest in a subsidiary. SFAS No. 160 also establishes accounting and reporting standards for the amount of consolidated net income attributable to the parent and to the noncontrolling interest, changes in a parents
ownership interest, and the valuation of retained noncontrolling equity investments when a subsidiary is deconsolidated. SFAS No. 160 also establishes disclosure requirements that identify and distinguish between the interests of the parent and
the interests of the noncontrolling owners. SFAS No. 160 is effective for fiscal years beginning after December 15, 2008, and will be adopted by us in the first quarter of fiscal 2010. We are currently evaluating the potential impact of
the adoption of SFAS No. 160 on our consolidated results of operations and financial condition.

In February 2007, the FASB issued
SFAS No. 159, The Fair Value Option for Financial Assets and Financial LiabilitiesIncluding an amendment of FASB Statement No. 115 (SFAS No. 159). SFAS No. 159 expands the use of fair value accounting but
does not affect existing standards which require assets or liabilities to be carried at fair value. The objective of SFAS No. 159 is to improve financial reporting by providing companies with the opportunity to mitigate volatility in reported
earnings caused by measuring related assets and liabilities differently without having to apply complex hedge accounting provisions. Under SFAS No. 159, a company may elect to use fair value to measure eligible items at specified election dates
and report unrealized gains and losses on items for which the fair value option has been elected in earnings at each subsequent reporting date. Eligible items include, but are not limited to, accounts and loans receivable, available-for-sale and
held-to-maturity securities, equity method investments, accounts payable, guarantees, issued debt and firm commitments. If elected, SFAS No. 159 is effective for fiscal years beginning after November 15, 2007. Currently, we have not
expanded our eligible items subject to the fair value option under SFAS No. 159. The adoption of SFAS 159 has not impacted our consolidated results of operations and financial condition.

In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements (SFAS No. 157). SFAS No. 157 defines fair
value, establishes a framework and gives guidance regarding the methods used for measuring fair value, and expands disclosures about fair value measurements. SFAS No. 157 is effective for financial statements issued for fiscal years beginning
after November 15, 2007, and interim periods of those fiscal years. In February 2008, the FASB released a FASB Staff Position No. 157, Effective Date of FASB Statement No. 157, which delays the effective date of SFAS
No. 157 for all nonfinancial assets and nonfinancial liabilities, except those that are recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually) to fiscal years beginning after November 15,
2008. We do not expect the adoption of SFAS No. 157 for nonfinancial assets and liabilities to have a material effect on our consolidated results of operations and financial condition. The partial adoption of SFAS No. 157 for financial
assets and liabilities did not have a material impact on our condensed consolidated financial position, results of operations or cash flows. See Note 4 Investment in Marketable Securities and Fair Value Measurements.

In November 2008, the FASB ratified EITF Issue No. 08-7, Accounting for Defensive Intangible Assets (EITF No. 08-7).
EITF No. 08-7 applies to defensive intangible assets, which are acquired intangible assets that the acquirer does not intend to actively use but intends to hold to prevent its competitors from obtaining access to them. As these assets are
separately identifiable, EITF No. 08-7 requires an acquiring entity to account for defensive intangible assets as a separate unit of accounting. Defensive intangible assets must be recognized at



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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)



fair value in accordance with SFAS No. 141(R) and SFAS No. 157. EITF No. 08-7 is effective for defensive intangible assets acquired in fiscal
years beginning on or after December 15, 2008 and will be adopted by us in the first quarter of fiscal 2010. We are currently evaluating the potential impact, if any, of the adoption of EITF No. 08-7 on its consolidated results of
operations and financial condition.

In April 2008, the FASB issued FASB Staff Position No. 142-3 (FSP No. 142-3),Determination of the Useful Life of Intangible Assets. FSP No. 142-3 amends the factors an entity should consider in developing renewal or extension assumptions used in determining the useful life of recognized intangible assets under SFAS
No. 142, Goodwill and Other Intangible Assets. This new guidance applies prospectively to intangible assets that are acquired individually or with a group of other assets in business combinations and asset acquisitions. FSP
No. 142-3 is effective for financial statements issued for fiscal years and interim periods beginning after December 15, 2008. FSP No. 142-3 will be adopted by us in the first quarter of fiscal 2010. We are currently evaluating the
effect that the adoption of FSP No. 142-3 will have on our consolidated results of operations and financial condition.

In June 2007,
the FASB ratified EITF Issue No. 07-3, Accounting for Nonrefundable Advance Payments for Goods or Services Received for Use in Future Research and Development Activities (EITF No. 07-3). EITF No. 07-3 requires that
nonrefundable advance payments for goods or services that will be used or rendered for future research and development activities be deferred and capitalized and recognized as an expense as the goods are delivered or the related services are
performed. EITF No. 07-3 is effective, on a prospective basis, for fiscal years beginning after December 15, 2007. We are currently evaluating the effect that the adoption of EITF No. 07-3 will have on our consolidated results of
operations and financial condition.

On December 1, 2007, we adopted FASB Interpretation No. 48, Accounting for Uncertainty in
Income Taxesan interpretation of FASB Statement No. 109(FIN 48). FIN 48 clarifies the accounting for uncertainty in income taxes by prescribing the recognition threshold a tax position is required to meet before
being recognized in the financial statements. FIN 48 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. See Note 17 Income Taxes.

3.    Business Combination

Acquisition in
Fiscal Year 2008

Insightful Corporation

On September 3, 2008, we acquired Insightful Corporation (Insightful), a provider of statistical data analysis and data mining solutions software. Pursuant to the Agreement and Plan of Merger (the
Insightful Merger Agreement) entered into on June 19, 2008, we acquired all the outstanding equity of Insightful. We paid $25.4 million, consisting of $24.7 million of cash and the assumption of certain stock options with
a fair value of $0.8 million, to acquire the outstanding common stock and certain stock options of Insightful. In connection with the acquisition, we also incurred transaction costs of $0.9 million.

The acquisition was accounted for using the purchase method of accounting. A summary of the purchase price of the acquisition is as follows (in
thousands):



|                                                    |  |   |       
|--------------------------------------------------- |  | - | ------
|Cash paid                                           |  | $ | 24,669
|Consideration associated with assumed stock options |  |   | 778   
|Direct transaction costs                            |  |   | 938   
|                                                    |  |   |       
|Total purchase price                                |  | $ | 26,385
|                                                    |  |   |       



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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)



The preliminary allocation of the purchase price for this acquisition, as of the date of the
acquisition, is as follows (in thousands):



|                                 |  |   |        |  
|-------------------------------- |  | - | ------ | -
|Cash acquired                    |  | $ | 5,305  |  
|Short-term investments           |  |   | 5,050  |  
|Other assets acquired            |  |   | 3,099  |  
|Deferred income tax assets       |  |   | 3,789  |  
|Identifiable intangible assets   |  |   | 16,200 |  
|Goodwill                         |  |   | 2,533  |  
|                                 |  |   |        |  
|Total assets acquired            |  |   | 35,976 |  
|Liabilities assumed              |  |   | (8,697 | )
|Deferred income tax liabilities  |  |   | (483   | )
|Long-term income tax liabilities |  |   | (411   | )
|                                 |  |   |        |  
|Total liabilities assumed        |  |   | (9,591 | )
|                                 |  |   |        |  
|Net assets acquired              |  | $ | 26,385 |  
|                                 |  |   |        |  

The amount of the total purchase price allocated to the tangible assets acquired was assigned
based on the fair values as of the date of the acquisition. The fair value assigned to identifiable intangible assets acquired was determined using the income approach which discounts expected future cash flows to present value using estimated
assumptions determined by management. We believe that these identified intangible assets will have no residual value after their estimated economic useful lives. These identifiable intangible assets are subject to amortization on a straight line
basis as this best approximates the benefit period related to these assets (in thousands, except amortization period):



|                        |  |                                |        |                                    |          
|----------------------- |  | ------------------------------ | ------ | ---------------------------------- | ---------
|                        |  | Gross Amountat AcquisitionDate |        | Weighted AverageAmortizationPeriod
|Existing technology     |  | $                              | 8,600  |                                    | 4.0 years
|Customer base           |  |                                | 1,200  |                                    | 5.0 years
|Patents/core technology |  |                                | 700    |                                    | 3.0 years
|Trademarks              |  |                                | 100    |                                    | 3.0 years
|Service agreements      |  |                                | 500    |                                    | 2.0 years
|Maintenance agreements  |  |                                | 5,100  |                                    | 5.0 years
|                        |  |                                |        |                                    |          
|                        |  | $                              | 16,200 |                                    |          
|                        |  |                                |        |                                    |          

The excess of the purchase price over the identified tangible and intangible assets was recorded
as goodwill. We anticipate that none of the goodwill recorded in connection with the Insightful acquisition will be deductible for income tax purposes.

As part of the transaction, we assumed Insightful Corporation Amended and Restated 2001 Stock Option and Incentive Plan (the 2001 Insightful Plan).As of September 3, 2008, there were
approximately 0.5 million shares reserved for grant and approximately 0.5 million shares underlying stock options outstanding under the 2001 Insightful Plan. Each outstanding and unexercised option under the plan was converted into an
option to purchase our common stock based on the option exchange ratio set forth in the Insightful Merger Agreement. Such assumed options had a weighted average fair value of $2.47 per share valued using the Black-Scholes model. The total fair value
of the options assumed was $1.3 million, of which approximately 0.3 million fully



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TIBCO SOFTWARE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)



vested options with $0.8 million fair value was included in the purchase price. The remaining approximately 0.2 million unvested options with
$0.5 million fair value will be expensed on a straight-line basis over the remaining requisite service period of the underlying awards.

Acquisition in Fiscal Year 2007

Spotfire Holdings, Inc.

On June 5, 2007, we acquired Spotfire Holdings, Inc. (Spotfire), a privately held company headquartered in Massachusetts and a leading
provider of next generation business intelligence software, which is now part of our business optimization product line. Pursuant to the Agreement and Plan of Merger (the Merger Agreement), we acquired all the outstanding equity
excluding the unvested options of Spotfire for approximately $190.4 million in cash plus transaction costs. In addition, pursuant to the Merger Agreement, each unvested option of Spotfire was canceled and substituted with an option to purchase our
common stock (each, a Substitute Option). We granted approximately 887,000 shares of Substitute Options on the closing date of the acquisition. Substitute Options were valued using the Black-Scholes model on the date of the acquisition
with a fair value of $5.4 million and will be expensed as stock-based compensation on a straight-line basis over the remaining vesting period of the underlying awards.

The acquisition was accounted for using the purchase method of accounting. A summary of the purchase price of the acquisition is as follows (in thousands):



|                         |  |   |        
|------------------------ |  | - | -------
|Cash paid                |  | $ | 190,430
|Direct transaction costs |  |   | 3,226  
|                         |  |   |        
|Total purchase price     |  | $ | 193,656
|                         |  |   |        

The allocation of the estimated purchase price for this acquisition, as of the date of the
acquisition, is as follows (in thousands):



|                                             |  |   |         |  
|-------------------------------------------- |  | - | ------- | -
|Cash acquired                                |  | $ | 10,408  |  
|Other assets acquired                        |  |   | 43,371  |  
|Deferred income tax assets                   |  |   | 11,908  |  
|Identifiable intangible assets               |  |   | 72,300  |  
|Acquired in-process research and development |  |   | 1,600   |  
|Goodwill                                     |  |   | 121,447 |  
|                                             |  |   |         |  
|Total assets acquired                        |  |   | 261,034 |  
|Liabilities assumed                          |  |   | (35,394 | )
|Deferred income tax liabilities              |  |   | (31,984 | )
|                                             |  |   |         |  
|Total liabilities assumed                    |  |   | (67,378 | )
|                                             |  |   |         |  
|Net assets acquired                          |  | $ | 193,656 |  
|                                             |  |   |         |  

The amount of the total purchase price allocated to the tangible assets acquired was assigned
based on the fair values as of the date of the acquisition. The fair value assigned to identifiable intangible assets acquired was determined using the income approach which discounts expected future cash flows to present value using estimated
assumptions determined by management. We believe that these identified intangible assets will have no residual value after their estimated economic useful lives. Our methodology for allocating the purchase price relating to acquired in-process
research and development (IPR&D) was determined through established



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TIBCO SOFTWARE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)



valuation techniques. Acquired IPR&D was expensed upon acquisition as technological feasibility had not been established and no future alternate use
existed. These identifiable intangible assets are subject to amortization on a straight line basis as this best approximates the benefit period related to these assets (in thousands, except amortization period):



|                        |  |                                |        |                                    |          
|----------------------- |  | ------------------------------ | ------ | ---------------------------------- | ---------
|                        |  | Gross Amountat AcquisitionDate |        | Weighted AverageAmortizationPeriod
|Existing technology     |  | $                              | 35,600 |                                    | 4.0 years
|Customer base           |  |                                | 18,300 |                                    | 7.0 years
|Patents/core technology |  |                                | 5,500  |                                    | 4.0 years
|Trademarks              |  |                                | 1,500  |                                    | 5.0 years
|Non-compete agreements  |  |                                | 800    |                                    | 2.0 years
|Maintenance agreements  |  |                                | 10,600 |                                    | 6.8 years
|                        |  |                                |        |                                    |          
|                        |  | $                              | 72,300 |                                    |          
|                        |  |                                |        |                                    |          

The excess of the purchase price over the identified tangible and intangible assets was recorded
as goodwill. We anticipate that none of the goodwill recorded in connection with the Spotfire acquisition will be deductible for income tax purposes.

The purchase method of accounting requires us to reduce Spotfires deferred revenue as of the acquisition date to an amount equal to the fair value of the service and maintenance obligations assumed from
Spotfire. We based our determination of the fair value of the service and maintenance obligations through established valuation techniques using estimates and assumptions provided by management. As a result, in allocating the purchase price, we
recorded an adjustment to reduce the carrying value of Spotfires deferred revenue resulting in lower revenues in periods following the acquisition than Spotfire would have achieved as a separate company.

The acquired tangible assets included $34.3 million of accounts receivable for contracts with payment terms, of which $21.4 million are due within one
year and are included in Other Current Assets and the remaining $12.9 million are due after one year and are classified as non-current Other Assets on the Balance Sheet. As the fair value of the service and maintenance obligations assumed is less
than the amount of accounts receivable with future payment terms, our cash flows related to these contracts are anticipated to be greater than revenues recorded from these contracts.

Spotfire had a revolving line of credit with a bank secured by certain Spotfire property and equipment. On the closing date of the acquisition, the
outstanding balance under the revolving line of credit of $4.0 million was paid in full and the associated revolving line of credit loan agreement was terminated.



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TIBCO SOFTWARE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)



Pro Forma Adjusted Summary

The results of Insightfuls and Spotfires operations have been included in the Consolidated Financial Statements since the acquisition dates.
The following unaudited pro forma adjusted summary reflects TIBCOs condensed results of operations for the periods ended November 30, 2008 and 2007, respectively. The summary assumes Insightful had been acquired at the beginning of the
periods and assumes Spotfire had been acquired at the beginning of fiscal year 2007, and includes the acquired IPR&D charge of $1.6 million. The unaudited pro forma adjusted summary combines the historical results for TIBCO for that period
with the historical results for Insightful and Spotfire for the same period. The following unaudited pro forma adjusted summary is not intended to be indicative of future results (in thousands, except per share amounts):



|                                         |  |                         |         |      |   |        
|---------------------------------------- |  | ----------------------- | ------- | ---- | - | -------
|                                         |  | Year Ended November 30,
|                                         |  | 2008                    |         | 2007
|                                         |  | (Unaudited)            
|Pro forma adjusted total revenue         |  | $                       | 659,728 |      | $ | 623,306
|                                         |  |                         |         |      |   |        
|Pro forma adjusted net income            |  | $                       | 49,417  |      | $ | 36,970 
|                                         |  |                         |         |      |   |        
|Pro forma adjusted net income per share: |  |                         |         |      |   |        
|Basic                                    |  | $                       | 0.26    |      | $ | 0.19   
|                                         |  |                         |         |      |   |        
|Diluted                                  |  | $                       | 0.25    |      | $ | 0.18   
|                                         |  |                         |         |      |   |        

4.    Investment in Marketable Securities and Fair Value Measurements

Marketable securities, which are classified as available-for-sale, are summarized below as of November 30, 2008 and 2007 (in thousands):



|                                |  |                         |         |                      |   |                       |  |   |                     |   |                             |   |                       |  |   |         |  |   |       
|------------------------------- |  | ----------------------- | ------- | -------------------- | - | --------------------- |  | - | ------------------- | - | --------------------------- | - | --------------------- |  | - | ------- |  | - | ------
|                                |  |                         |         |                      |   |                       |  |   |                     |   | Classified on Balance Sheet
|                                |  | Purchased/AmortizedCost |         | GrossUnrealizedGains |   | GrossUnrealizedLosses |  |   | AggregateFair Value |   | Cashand CashEquivalents     |   | Short-termInvestments
|                                |  |                         |         |                      |  
|                                |  |                         |         |                      |  
|As of November 30, 2008:        |  |                         |         |                      |   |                       |  |   |                     |   |                             |   |                       |  |   |         |  |   |       
|U.S. Government debt securities |  | $                       | 3,022   |                      | $ | 12                    |  | $ |                    |   |                             | $ | 3,034                 |  | $ |        |  | $ | 3,034 
|Corporate debt securities       |  |                         | 5,795   |                      |   | 30                    |  |   | (1                  | ) |                             |   | 5,824                 |  |   |        |  |   | 5,824 
|Asset-backed securities         |  |                         | 2,483   |                      |   | 3                     |  |   | (8                  | ) |                             |   | 2,478                 |  |   |        |  |   | 2,478 
|Mortgage-backed securities      |  |                         | 1,747   |                      |   | 2                     |  |   | (12                 | ) |                             |   | 1,737                 |  |   |        |  |   | 1,737 
|Money market funds              |  |                         | 129,551 |                      |   |                      |  |   |                    |   |                             |   | 129,551               |  |   | 129,551 |  |   |      
|                                |  |                         |         |                      |   |                       |  |   |                     |   |                             |   |                       |  |   |         |  |   |       
|                                |  | $                       | 142,598 |                      | $ | 47                    |  | $ | (21                 | ) |                             | $ | 142,624               |  | $ | 129,551 |  | $ | 13,073
|                                |  |                         |         |                      |   |                       |  |   |                     |   |                             |   |                       |  |   |         |  |   |       
|As of November 30, 2007:        |  |                         |         |                      |   |                       |  |   |                     |   |                             |   |                       |  |   |         |  |   |       
|U.S. Government debt securities |  | $                       | 21,162  |                      | $ | 373                   |  | $ |                    |   |                             | $ | 21,535                |  | $ |        |  | $ | 21,535
|Corporate debt securities       |  |                         | 36,585  |                      |   | 130                   |  |   | (153                | ) |                             |   | 36,562                |  |   |        |  |   | 36,562
|Asset-backed securities         |  |                         | 20,189  |                      |   | 87                    |  |   | (47                 | ) |                             |   | 20,229                |  |   |        |  |   | 20,229
|Mortgage-backed securities      |  |                         | 17,241  |                      |   | 68                    |  |   | (101                | ) |                             |   | 17,208                |  |   |        |  |   | 17,208
|Money market funds              |  |                         | 46,019  |                      |   |                      |  |   |                    |   |                             |   | 46,019                |  |   | 46,019  |  |   |      
|                                |  |                         |         |                      |   |                       |  |   |                     |   |                             |   |                       |  |   |         |  |   |       
|                                |  | $                       | 141,196 |                      | $ | 658                   |  | $ | (301                | ) |                             | $ | 141,553               |  | $ | 46,019  |  | $ | 95,534
|                                |  |                         |         |                      |   |                       |  |   |                     |   |                             |   |                       |  |   |         |  |   |       



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TIBCO SOFTWARE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)



Fixed income securities included in short-term investments above, are summarized by their contractual
maturities as follows (in thousands):



|                        |  |              |        |      |   |       
|----------------------- |  | ------------ | ------ | ---- | - | ------
|                        |  | November 30,
|                        |  | 2008         |        | 2007
|Contractual maturities: |  |              |        |      |   |       
|Less than one year      |  | $            | 12,564 |      | $ | 12,682
|One to three years      |  |              | 509    |      |   | 82,852
|                        |  |              |        |      |   |       
|                        |  | $            | 13,073 |      | $ | 95,534
|                        |  |              |        |      |   |       

The maturities of asset-backed and mortgage-backed securities were primarily based upon payment
forecasts utilizing interest rate scenarios and mortgage loan characteristics.

The following table summarizes the net realized gains
(losses) on short-term investments for the fiscal years presented (in thousands):



|                            |  |                         |        |   |      |   |      |      |  |   |      |  
|--------------------------- |  | ----------------------- | ------ | - | ---- | - | ---- | ---- |  | - | ---- | -
|                            |  | Year Ended November 30, |       
|                            |  | 2008                    |        |   | 2007 |   |      | 2006 | 
|Realized gains              |  | $                       | 1,351  |   |      | $ | 411  |      |  | $ | 205  |  
|Realized losses             |  |                         | (1,116 | ) |      |   | (723 | )    |  |   | (160 | )
|                            |  |                         |        |   |      |   |      |      |  |   |      |  
|Net realized gains (losses) |  | $                       | 235    |   |      | $ | (312 | )    |  | $ | 45   |  
|                            |  |                         |        |   |      |   |      |      |  |   |      |  

The following table summarizes the fair value and gross unrealized losses related to
available-for-sale securities, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, as of November 30, 2008 (in thousands):



|                           |  |                     |       |                       |                     |     |           |  |                       |   |           |   |                       |  |   |       |  |   |     |  
|-------------------------- |  | ------------------- | ----- | --------------------- | ------------------- | --- | --------- |  | --------------------- | - | --------- | - | --------------------- |  | - | ----- |  | - | --- | -
|                           |  | Less than 12 months |       |                       | More than 12 months |     | Total     | 
|                           |  | FairValue           |       | GrossUnrealizedLosses |                     |     | FairValue |  | GrossUnrealizedLosses |   | FairValue |   | GrossUnrealizedLosses | 
|                           |  |                     |       |                       |                    
|Corporate debt securities  |  | $                   | 1,012 |                       | $                   | (1  | )         |  | $                     |  |           | $ |                      |  | $ | 1,012 |  | $ | (1  | )
|Asset-backed securities    |  |                     | 1,546 |                       |                     | (8  | )         |  |                       |  |           |   |                      |  |   | 1,546 |  |   | (8  | )
|Mortgage-backed securities |  |                     | 489   |                       |                     | (12 | )         |  |                       |  |           |   |                      |  |   | 489   |  |   | (12 | )
|                           |  |                     |       |                       |                     |     |           |  |                       |   |           |   |                       |  |   |       |  |   |     |  
|                           |  | $                   | 3,047 |                       | $                   | (21 | )         |  | $                     |  |           | $ |                      |  | $ | 3,047 |  | $ | (21 | )
|                           |  |                     |       |                       |                     |     |           |  |                       |   |           |   |                       |  |   |       |  |   |     |  

The unrealized losses on our investments were primarily due to changes in interest rates and
market and credit conditions of the underlying securities. As of November 30, 2008, we do not consider these investments to be other-than-temporarily impaired because we have the ability and intent to hold these investments until a recovery of
fair value, which may be at maturity.

We periodically assess whether significant facts and circumstances have arisen to indicate an
adverse effect on the fair value of the underlying investment that might indicate material deterioration in the creditworthiness of our issuers. During fiscal years 2008 and 2007, we determined the decline in value of investments associated with
certain mortgage-backed securities to be other-than-temporary. Accordingly, we recorded an impairment of approximately $0.6 million and $0.3 million in fiscal years 2008 and 2007, respectively. We included this impairment in Other Income (Expense)
in the Consolidated Statements of Operations. Depending on market conditions, we may record additional impairments on our investment portfolio in the future.



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##### Table of Contents

TIBCO SOFTWARE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)



Fair Value Measurements

SFAS No. 157 clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a
liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a
basis for considering such assumptions, SFAS No. 157 establishes a three-tier value hierarchy, which prioritizes the inputs used in measuring fair value as follows: (Level 1) observable inputs such as quoted prices in active markets; (Level 2)
inputs other than the quoted prices in active markets that are observable either directly or indirectly; and (Level 3) unobservable inputs in which there is little or no market data, which require us to develop our own assumptions. This hierarchy
requires us to use observable market data, when available, and to minimize the use of unobservable inputs when determining fair value. On a recurring basis, we measure certain financial assets and liabilities at fair value, including our marketable
securities and foreign currency contracts.

Our cash equivalents and investment instruments are classified within Level 1 or
Level 2 of the fair value hierarchy because they are valued using quoted market prices, broker or dealer quotations, or alternative pricing sources with reasonable levels of price transparency. The types of instruments valued based on quoted
market prices in active markets include most U.S. government and agency securities, sovereign government obligations, and money market securities. Such instruments are generally classified within Level 1 of the fair value hierarchy.

The types of instruments valued based on other observable inputs include investment-grade corporate bonds, mortgage-backed and
asset-backed products, state, municipal and provincial obligations. Such instruments are generally classified within Level 2 of the fair value hierarchy.

We execute our foreign currency contracts primarily in the retail market in an over-the-counter environment with a relatively high level of price transparency. The market participants usually are large multi-national
and regional banks. Our foreign currency contracts valuation inputs are based on quoted prices and quoted pricing intervals from public data sources and do not involve management judgment. These contracts are typically classified within Level 2
of the fair value hierarchy.

Fair value hierarchy of our cash equivalents, marketable securities and foreign currency contracts at fair
value in connection with our adoption of SFAS No. 157 (in thousands):



|                                   |  |                  |         |                                                            |   |                                           |  |   |      
|---------------------------------- |  | ---------------- | ------- | ---------------------------------------------------------- | - | ----------------------------------------- |  | - | -----
|                                   |  |                  |         | Fair Value Measurementsat Reporting Date using            
|Description                        |  | November 30,2008 |         | Quoted Pricesin ActiveMarkets forIdentical Assets(Level 1) |   | SignificantotherObservableInputs(Level 2)
|Assets:                            |  |                  |         |                                                            |   |                                           |  |   |      
|Money market fund                  |  | $                | 129,551 |                                                            | $ | 129,551                                   |  | $ |     
|U.S. Government debt securities    |  |                  | 3,034   |                                                            |   |                                          |  |   | 3,034
|Corporate debt securities          |  |                  | 5,824   |                                                            |   |                                          |  |   | 5,824
|Asset-backed securities            |  |                  | 2,478   |                                                            |   |                                          |  |   | 2,478
|Mortgage-backed securities         |  |                  | 1,737   |                                                            |   |                                          |  |   | 1,737
|Foreign currency forward contracts |  |                  | 694     |                                                            |   |                                          |  |   | 694  
|Liabilities:                       |  |                  |         |                                                            |   |                                           |  |   |      
|Foreign currency forward contracts |  | $                | 6       |                                                            | $ |                                          |  | $ | 6    



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TIBCO SOFTWARE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)



5.    Accounts Receivable and Allowances for Doubtful Accounts, Returns and Discounts

Accounts receivable, net, by category is as follows (in thousands):



|                                                              |  |              |         |   |      |   |         |  
|------------------------------------------------------------- |  | ------------ | ------- | - | ---- | - | ------- | -
|                                                              |  | November 30, |        
|                                                              |  | 2008         |         |   | 2007 |  
|Accounts receivable                                           |  | $            | 128,283 |   |      | $ | 154,292 |  
|Unbilled fees and services                                    |  |              | 9,277   |   |      |   | 11,697  |  
|                                                              |  |              |         |   |      |   |         |  
|                                                              |  |              | 137,560 |   |      |   | 165,989 |  
|Less: Allowances for doubtful accounts, returns and discounts |  |              | (4,369  | ) |      |   | (4,259  | )
|                                                              |  |              |         |   |      |   |         |  
|Net accounts receivable                                       |  | $            | 133,191 |   |      | $ | 161,730 |  
|                                                              |  |              |         |   |      |   |         |  

Trade accounts receivable are recorded at invoiced or to be invoiced amounts and do not bear
interest. We perform ongoing credit evaluations of our customers financial condition and, generally, require no collateral from our customers. Allowances for doubtful accounts, returns and discounts were established based on various factors
including credit profiles of our customers, contractual terms and conditions, historical payments, returns and discounts experience and current economic trends. We review our allowances monthly by assessing individual accounts receivable over a
specific aging and amount, and all other balances on a pooled basis based on historical collection experience. Accounts receivable are written off on a case-by-case basis, net of any amounts that may be collected.

The following is a summary of activities in allowances for doubtful accounts, returns and discounts for the fiscal years indicated (in thousands):



|                        |  |                            |       |                       |   |                   |  |   |                                       |   |  |                         |        |   |  |   |      
|----------------------- |  | -------------------------- | ----- | --------------------- | - | ----------------- |  | - | ------------------------------------- | - |  | ----------------------- | ------ | - |  | - | -----
|Year ended November 30, |  | AllowancesBeginningBalance |       | ChargedAgainstRevenue |   | ChargedtoExpenses |  |   | Write-offs,Adjustments,Net ofRecovery |   |  | AllowancesEndingBalance
|                        |  |                            |       |                      
|2008                    |  | $                          | 4,259 |                       | $ | 878               |  | $ | 573                                   |   |  | $                       | (1,341 | ) |  | $ | 4,369
|2007                    |  |                            | 4,255 |                       |   | 763               |  |   | (525                                  | ) |  |                         | (234   | ) |  |   | 4,259
|2006                    |  |                            | 4,521 |                       |   | 2,770             |  |   | (1,000                                | ) |  |                         | (2,036 | ) |  |   | 4,255

6.    Property and Equipment

Property and equipment by category is as follows (in thousands):



|                               |  |              |         |   |      |   |         |  
|------------------------------ |  | ------------ | ------- | - | ---- | - | ------- | -
|                               |  | November 30, |        
|                               |  | 2008         |         |   | 2007 |  
|Buildings                      |  | $            | 77,938  |   |      | $ | 77,938  |  
|Equipment and software         |  |              | 54,687  |   |      |   | 55,530  |  
|Furniture and fixtures         |  |              | 7,687   |   |      |   | 7,813   |  
|Facility improvements          |  |              | 44,871  |   |      |   | 45,621  |  
|                               |  |              |         |   |      |   |         |  
|                               |  |              | 185,183 |   |      |   | 186,902 |  
|Less: Accumulated depreciation |  |              | (81,652 | ) |      |   | (75,512 | )
|                               |  |              |         |   |      |   |         |  
|                               |  | $            | 103,531 |   |      | $ | 111,390 |  
|                               |  |              |         |   |      |   |         |  



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TIBCO SOFTWARE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)



Building Acquisition

In June 2003, we purchased the four buildings comprising our corporate headquarters in Palo Alto, California. In connection with the purchase we entered into a 51-year lease of the land upon which the buildings are
located. The lease was paid in advance in the amount of $28.0 million; see Note 11 for further details. The total consideration paid for the land lease and the buildings was $108.0 million, which was comprised of $54.0 million in cash and a $54.0
million mortgage note payable; see Notes 9 and 11 for further details.

The net purchase price of the buildings of $78.0 million is stated
at cost, net of accumulated depreciation, and is included as a component of Property and Equipment on the Consolidated Balance Sheets. Depreciation is computed using the straight-line method over the estimated useful life of 25 years.

7.    Goodwill and Other Acquired Intangible Assets

Goodwill

The changes in the carrying amount of goodwill for the fiscal years ended November 30, 2008 and 2007
are as follows (in thousands):



|                                                    |  |          |         |  
|--------------------------------------------------- |  | -------- | ------- | -
|                                                    |  | Goodwill |        
|Balance as of November 30, 2006                     |  | $        | 274,442 |  
|Goodwill recorded for the Spotfire acquisition      |  |          | 121,447 |  
|Foreign currency translation                        |  |          | 16,367  |  
|                                                    |  |          |         |  
|Balance as of November 30, 2007                     |  |          | 412,256 |  
|Goodwill recorded for the Insightful acquisition    |  |          | 2,533   |  
|Spotfire subsequent goodwill adjustment, net of tax |  |          | (1,207  | )
|Foreign currency translation                        |  |          | (69,640 | )
|                                                    |  |          |         |  
|Balance as of November 30, 2008                     |  | $        | 343,942 |  
|                                                    |  |          |         |  

In fiscal year 2008, we recorded a decrease in goodwill of $1.2 million net of tax as a result of
the settlement of certain accrued liabilities and a reduction of accrued acquisition costs related to the acquisition of Spotfire.

Acquired
Intangible Assets

Our acquired intangible assets are subject to amortization on a straight line basis over their estimated useful
lives as follows:



|                          |  |               |  |                               
|------------------------- |  | ------------- |  | ------------------------------
|                          |  | EstimatedLife |  | Weighted AverageRemaining Life
|Developed technologies    |  | 4 to 5 years  |  | 2.7 years                     
|Customer base             |  | 3 to 7 years  |  | 4.9 years                     
|Patents/core technologies |  | 3 to 8 years  |  | 2.9 years                     
|Trademarks                |  | 3 to 5 years  |  | 2.7 years                     
|Non-compete agreements    |  | 2 years       |  | 0.5 years                     
|Maintenance agreements    |  | 5 to 9 years  |  | 4.7 years                     



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##### Table of Contents

TIBCO SOFTWARE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)



The carrying values of our amortized acquired intangible assets are as follows (in thousands):



|                                |  |                     |         |                         |   |          |                   |  |                     |        |                         |   |         |                   |   |         |   |  |   |        
|------------------------------- |  | ------------------- | ------- | ----------------------- | - | -------- | ----------------- |  | ------------------- | ------ | ----------------------- | - | ------- | ----------------- | - | ------- | - |  | - | -------
|                                |  | November 30, 2008   |         | November 30, 2007      
|                                |  | GrossCarryingAmount |         | AccumulatedAmortization |   |          | NetCarryingAmount |  | GrossCarryingAmount |        | AccumulatedAmortization |   |         | NetCarryingAmount
|Developed technologies          |  | $                   | 83,853  |                         | $ | (52,885  | )                 |  | $                   | 30,968 |                         | $ | 88,171  |                   | $ | (45,460 | ) |  | $ | 42,711 
|Customer base                   |  |                     | 37,461  |                         |   | (21,967  | )                 |  |                     | 15,494 |                         |   | 43,112  |                   |   | (19,228 | ) |  |   | 23,884 
|Patents/core technologies       |  |                     | 18,460  |                         |   | (9,424   | )                 |  |                     | 9,036  |                         |   | 23,143  |                   |   | (8,412  | ) |  |   | 14,731 
|Trademarks                      |  |                     | 5,981   |                         |   | (4,666   | )                 |  |                     | 1,315  |                         |   | 7,170   |                   |   | (4,530  | ) |  |   | 2,640  
|Non-compete agreements          |  |                     | 1,480   |                         |   | (1,280   | )                 |  |                     | 200    |                         |   | 1,480   |                   |   | (863    | ) |  |   | 617    
|OEM customer royalty agreements |  |                     | 1,000   |                         |   | (1,000   | )                 |  |                     |       |                         |   | 1,000   |                   |   | (1,000  | ) |  |   |       
|Maintenance agreements          |  |                     | 37,611  |                         |   | (14,187  | )                 |  |                     | 23,424 |                         |   | 37,892  |                   |   | (11,545 | ) |  |   | 26,347 
|                                |  |                     |         |                         |   |          |                   |  |                     |        |                         |   |         |                   |   |         |   |  |   |        
|                                |  | $                   | 185,846 |                         | $ | (105,409 | )                 |  | $                   | 80,437 |                         | $ | 201,968 |                   | $ | (91,038 | ) |  | $ | 110,930
|                                |  |                     |         |                         |   |          |                   |  |                     |        |                         |   |         |                   |   |         |   |  |   |        

Amortization of developed technologies is recorded in cost of revenue, while the amortization of
other acquired intangible assets is included in operating expenses. The following summarizes the amortization expense of acquired intangible assets for the fiscal years indicated (in thousands):



|                                            |  |                         |        |      |   |        |  |   |       
|------------------------------------------- |  | ----------------------- | ------ | ---- | - | ------ |  | - | ------
|                                            |  | Year Ended November 30,
|                                            |  | 2008                    |        | 2007 |   | 2006  
|Amortization of acquired intangible assets: |  |                         |        |      |   |        |  |   |       
|In cost of revenue                          |  | $                       | 15,745 |      | $ | 10,326 |  | $ | 5,322 
|In operating expenses                       |  |                         | 16,557 |      |   | 13,164 |  |   | 9,454 
|                                            |  |                         |        |      |   |        |  |   |       
|                                            |  | $                       | 32,302 |      | $ | 23,490 |  | $ | 14,776
|                                            |  |                         |        |      |   |        |  |   |       

The estimated future amortization of acquired intangible assets as of November 30, 2008 is as
follows (in thousands):



|                         |  |   |       
|------------------------ |  | - | ------
|Year ending November 30, |  |  
|2009                     |  | $ | 25,938
|2010                     |  |   | 21,397
|2011                     |  |   | 16,519
|2012                     |  |   | 9,124 
|2013                     |  |   | 5,445 
|Thereafter               |  |   | 2,014 
|                         |  |   |       
|                         |  | $ | 80,437
|                         |  |   |       

8.    Accrued Restructuring and Excess Facilities Costs

Accrued Integration Costs

In connection with
our acquisitions of Insightful in fiscal year 2008, Spotfire in fiscal year 2007, and Staffware plc (Staffware) in fiscal year 2004, we recorded accruals for acquisition integration liabilities, which include the incremental costs to
exit and consolidate activities at acquired locations, termination of certain employees, and other costs to integrate operating locations and other activities of the acquired companies. The accruals were recorded using the guidance provided by EITF
No. 95-3, Recognition of Liabilities in a Purchase



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TIBCO SOFTWARE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)



Business Combination, which requires that these acquisition integration expenses, which are not associated with the generation of future revenues and
have no future economic benefit, be reflected as assumed liabilities in the allocation of the purchase price to the net assets acquired.

In connection with our acquisition of Insightful in the fourth quarter of fiscal year 2008, we recorded an accrual of $3.3 million for acquisition integration liabilities, which includes $3.1 million in incremental costs associated with the
termination of certain employees and $0.2 million for the estimated costs associated with Insightful facilities that we expect to abandon. Included in the $3.1 million of incremental costs is $0.2 million stock-based compensation associated with the
fully vested stock options assumed in the acquisition.

In connection with our acquisition of Spotfire in the third quarter of fiscal year
2007, we recorded an accrual of $0.4 million for acquisition integration liabilities, which include the incremental cost associated with the termination of certain employees; as of November 30, 2008, all of these employees were terminated. As
of November 30, 2008, all of the obligations related to the Spotfire integration were satisfied.

In connection with our acquisition
of Staffware in June 2004, we recorded an accrual of $2.9 million for the estimated expenses due to the Staffware facilities that we expected to abandon. In addition, we recorded an accrual of $2.6 million for severance related to the termination of
redundant Staffware personnel and $0.2 million related to the cancellation of certain marketing programs. As of November 30, 2008, all of the obligations related to the Staffware integration were satisfied.

Accrued Restructuring Costs

2002
Restructuring Program. In fiscal year 2002, we recorded restructuring charges totaling $49.3 million, consisting of $47.6 million related to consolidation of facilities and $1.7 million for headcount reductions which had been fully utilized.
These restructuring charges were recorded to align our cost structure with changing market conditions. We expected to fulfill our cash obligation no later than 2011. We have been working with corporate real estate brokers to sublease unoccupied
facilities. Currently, a majority of these vacated facilities are occupied by our tenants.

In the third quarter of fiscal year 2004, we
recorded $2.2 million in additional restructuring charges related to properties vacated in connection with facilities consolidation. The additional restructuring charges resulted from revisions to our estimates of future sublease income due to
continued weakness of the applicable real estate market. The estimated excess facilities costs were based on our contractual obligations, net of estimated sublease income, based on current comparable rates for leases in their respective markets.

In the fourth quarter of fiscal year 2006, we recorded a $1.0 million credit adjustment to the restructuring charges related to properties
vacated in connection with facilities consolidation. The adjustment resulted from revisions to our estimates of future sublease income due to the recovery of the applicable real estate markets and adding a new tenant to the remaining vacated
facilities.

In the third quarter of fiscal year 2007, we recorded a $1.1 million credit adjustment to the restructuring charges related to
properties vacated in connection with facilities consolidation. The adjustment resulted from revisions to our estimates of future sublease income due to the recovery of the applicable real estate market.

2005 Restructuring Program. In fiscal year 2005, we initiated a restructuring plan designed to re-align our resources and cost structure and,
accordingly, recognized a restructuring charge of approximately $3.9 million for the resulting workforce reduction. The restructuring plan eliminated 49 employees, across all functions and primarily in our European operations. At the end of fiscal
year 2006, the plan was completed.



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TIBCO SOFTWARE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)



The following is a summary of activities in accrued restructuring and integration costs for each of
the three fiscal years ended November 30, 2008, 2007 and 2006 (in thousands):



|                              |  |                           |        |   |                             |   |       |          |  |   |               |   |  |                        |      |   |          |   |        |       |  |   |        |   |  |   |        |  
|----------------------------- |  | ------------------------- | ------ | - | --------------------------- | - | ----- | -------- |  | - | ------------- | - |  | ---------------------- | ---- | - | -------- | - | ------ | ----- |  | - | ------ | - |  | - | ------ | -
|                              |  | Accrued Excess Facilities |        |   | Accrued Severance and Other |  
|                              |  | HeadquarterFacilities     |        |   | AcquisitionIntegration      |   |       | Subtotal |  |   | Restructuring |   |  | AcquisitionIntegration |      |   | Subtotal |   |        | Total | 
|                              |  |                           |        |   |                             |  
|As of November 30, 2005       |  | $                         | 28,105 |   |                             | $ | 1,137 |          |  | $ | 29,242        |   |  | $                      | 747  |   |          | $ | 13     |       |  | $ | 760    |   |  | $ | 30,002 |  
|Restructuring adjustment      |  |                           | (1,042 | ) |                             |   |      |          |  |   | (1,042        | ) |  |                        |     |   |          |   |       |       |  |   |       |   |  |   | (1,042 | )
|Cash utilized                 |  |                           | (5,219 | ) |                             |   | (580  | )        |  |   | (5,799        | ) |  |                        | (747 | ) |          |   | (13    | )     |  |   | (760   | ) |  |   | (6,559 | )
|                              |  |                           |        |   |                             |   |       |          |  |   |               |   |  |                        |      |   |          |   |        |       |  |   |        |   |  |   |        |  
|As of November 30, 2006       |  |                           | 21,844 |   |                             |   | 557   |          |  |   | 22,401        |   |  |                        |     |   |          |   |       |       |  |   |       |   |  |   | 22,401 |  
|Restructuring adjustment      |  |                           | (1,095 | ) |                             |   |      |          |  |   | (1,095        | ) |  |                        |     |   |          |   |       |       |  |   |       |   |  |   | (1,095 | )
|Acquisition integration costs |  |                           |       |   |                             |   |      |          |  |   |              |   |  |                        |     |   |          |   | 404    |       |  |   | 404    |   |  |   | 404    |  
|Cash utilized                 |  |                           | (5,153 | ) |                             |   | 77    |          |  |   | (5,076        | ) |  |                        |     |   |          |   | (401   | )     |  |   | (401   | ) |  |   | (5,477 | )
|                              |  |                           |        |   |                             |   |       |          |  |   |               |   |  |                        |      |   |          |   |        |       |  |   |        |   |  |   |        |  
|As of November 30, 2007       |  |                           | 15,596 |   |                             |   | 634   |          |  |   | 16,230        |   |  |                        |     |   |          |   | 3      |       |  |   | 3      |   |  |   | 16,233 |  
|Acquisition integration costs |  |                           |       |   |                             |   | 192   |          |  |   | 192           |   |  |                        |     |   |          |   | 3,081  |       |  |   | 3,081  |   |  |   | 3,273  |  
|Cash utilized                 |  |                           | (4,967 | ) |                             |   | (703  | )        |  |   | (5,670        | ) |  |                        |     |   |          |   | (1,670 | )     |  |   | (1,670 | ) |  |   | (7,340 | )
|                              |  |                           |        |   |                             |   |       |          |  |   |               |   |  |                        |      |   |          |   |        |       |  |   |        |   |  |   |        |  
|As of November 30, 2008       |  | $                         | 10,629 |   |                             | $ | 123   |          |  | $ | 10,752        |   |  | $                      |     |   |          | $ | 1,414  |       |  | $ | 1,414  |   |  | $ | 12,166 |  
|                              |  |                           |        |   |                             |   |       |          |  |   |               |   |  |                        |      |   |          |   |        |       |  |   |        |   |  |   |        |  

The remaining accrued excess facilities costs represent the estimated loss on abandoned
facilities, net of sublease income, which is expected to be paid over the next two years. As of November 30, 2008, $5.6 million of the $12.2 million accrued restructuring and excess facilities costs were classified as long-term liabilities
based on our current expectation that the lease payments will be paid over the remaining term of the related leases.

9.    Long-Term Debt and Line of Credit

Mortgage Note Payable

In connection with the purchase of our corporate headquarters in June 2003, we recorded a $54.0 million mortgage note payable to a financial institution
collateralized by the commercial real property acquired. The balance on the mortgage note payable was $44.6 million and $46.5 million as of November 30, 2008 and 2007, respectively.

The mortgage note payable carries a 20-year amortization, and in the second quarter of fiscal year 2007, we amended the mortgage note payable such that
it now carries a fixed annual interest rate of 5.50%. The $34.4 million principal balance that will be remaining at the end of the 10-year term will be due as a final lump sum payment on July 1, 2013. Under the currently applicable terms of the
mortgage note agreements, we are prohibited from acquiring another company without prior consent from the lender unless we maintain at least $50.0 million of cash or cash equivalents and meet other non-financial terms as defined in the agreements.
In addition, we are subject to certain non-financial covenants as defined in the agreements. As of November 30, 2008, we were in compliance with all covenants.

As of November 30, 2008, the mortgage carrying amount reported in our consolidated balance sheet was $44.6 million. The determination of the fair value of our mortgage in accordance with the requirements of GAAP
involved significant judgment. Given the current volatility in the credit market and the limited amount of current lending activities, it is difficult to find similar available instruments. However, based on various inquiries to lenders who
considered our credit profile and the underlying value of the collateral, we determined a discount rate of 9.0% could be used to estimate the fair value of the mortgage. By using a discounted cash flow technique, we estimate the fair value of our
mortgage at approximately $39.5 million. The estimated fair value is not



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TIBCO SOFTWARE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)



indicative of any future realizable gain or loss or change in cash payment obligations associated with the mortgage. Currently, if we choose to refinance or
settle our mortgage obligation we will be subject to significant additional cash commitments. We do not expect to settle the obligation before its maturity.

Line of Credit

We have a $20.0 million revolving line of credit that matures on June 18, 2009. The revolving
line of credit is available for cash borrowings and for the issuance of letters of credit up to $20.0 million. As of November 30, 2008, no borrowings were outstanding under the facility and a $13.0 million irrevocable letter of credit was
outstanding, leaving $7.0 million of available credit for additional letters of credit or cash borrowings. The $13.0 million irrevocable letter of credit outstanding was issued in connection with the mortgage note payable. The letter of credit
automatically renews for successive one-year periods, until the mortgage note payable has been satisfied in full. We are required to maintain a minimum of $40.0 million in unrestricted cash, cash equivalents and short-term investments, net of total
current and long-term indebtedness, as well as comply with other non-financial covenants defined in the agreement. As of November 30, 2008, we were in compliance with all covenants under the revolving line of credit.

10.    Other Balance Sheet Components

Certain other balance sheet components are summarized below (in thousands):



|                                                                 |  |              |        |      |   |       
|---------------------------------------------------------------- |  | ------------ | ------ | ---- | - | ------
|                                                                 |  | November 30,
|                                                                 |  | 2008         |        | 2007
|Prepaid expenses and other current assets:                       |  |              |        |      |   |       
|Current deferred tax asset                                       |  | $            | 22,242 |      | $ | 9,672 
|Pre-acquisition receivableSpotfire(1)                           |  |              | 7,475  |      |   | 24,556
|Consumption, goods and services; and value added tax recoverable |  |              | 7,252  |      |   | 7,409 
|Prepaid royalties                                                |  |              | 4,387  |      |   | 3,034 
|Other                                                            |  |              | 8,638  |      |   | 8,869 
|                                                                 |  |              |        |      |   |       
|                                                                 |  | $            | 49,994 |      | $ | 53,540
|                                                                 |  |              |        |      |   |       
|Other non-current assets:                                        |  |              |        |      |   |       
|Prepaid land lease                                               |  | $            | 24,477 |      | $ | 25,026
|Pre-acquisition receivableSpotfire, net of current portion(1)   |  |              | 1,303  |      |   | 8,154 
|Restricted cash                                                  |  |              | 3,010  |      |   | 3,662 
|Private equity investments, net                                  |  |              | 846    |      |   | 896   
|Other                                                            |  |              | 10,229 |      |   | 9,797 
|                                                                 |  |              |        |      |   |       
|                                                                 |  | $            | 39,865 |      | $ | 47,535
|                                                                 |  |              |        |      |   |       
|Accrued liabilities:                                             |  |              |        |      |   |       
|Compensation and benefits                                        |  | $            | 53,767 |      | $ | 52,925
|Taxes                                                            |  |              | 14,191 |      |   | 12,962
|Current deferred tax liability                                   |  |              | 3,236  |      |   | 7,759 
|Other                                                            |  |              | 19,786 |      |   | 21,880
|                                                                 |  |              |        |      |   |       
|                                                                 |  | $            | 90,980 |      | $ | 95,526
|                                                                 |  |              |        |      |   |       



|(1) | Accounts receivable for contracts with payment terms related to the Spotfire acquisition, which had not been billed as of the acquisition date; see Note 3 for further details.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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TIBCO SOFTWARE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)



11.    Commitments and Contingencies

Letters of Credit and Bank Guarantees

In
connection with the mortgage note payable, we entered into an irrevocable letter of credit in the amount of $13.0 million; see Notes 6 and 9 for further details. The letter of credit is collateralized by the line of credit and automatically renews
for successive one-year periods until the mortgage note payable has been satisfied in full.

In connection with a facility lease, we have
an irrevocable letter of credit in the amount of $4.5 million. The letter of credit automatically renews annually for the duration of the lease term, which expires in December 2010. We are subject to certain financial covenants as defined in the
letter of credit agreement. As of November 30, 2008 we were in compliance with all letter of credit covenants.

As of
November 30, 2008, in connection with bank guarantees issued by some of our international subsidiaries, we had $3.0 million of restricted cash which is included in Other Assets on our Consolidated Balance Sheets.

Prepaid Land Lease

In June 2003, we entered
into a 51-year lease of the land upon which our corporate headquarters is located. The lease was paid in advance for a total of $28.0 million, but is subject to adjustments every ten years based upon changes in fair market value. Should it become
necessary, we have the option to prepay any rent increases due as a result of a change in fair market value. This prepaid land lease is being amortized using the straight-line method over the life of the lease; the portion to be amortized over the
next twelve months is included in Prepaid Expenses and Other Current Assets, and the remainder is included in Other Assets on our Consolidated Balance Sheets.

Operating Commitments

At various locations worldwide, we lease office space and equipment under non-cancelable
operating leases with various expiration dates through April 2015. Rental expense was approximately $10.5 million, $10.4 million and $8.8 million in fiscal years 2008, 2007 and 2006, respectively.

As of November 30, 2008, contractual commitments associated with indebtedness, lease obligations and restructuring are as follows
(in thousands):



|                                   |  |       |        |   |      |   |        |      |  |   |        |   |  |      |        |      |  |            |       |  |   |        |  |   |      
|---------------------------------- |  | ----- | ------ | - | ---- | - | ------ | ---- |  | - | ------ | - |  | ---- | ------ | ---- |  | ---------- | ----- |  | - | ------ |  | - | -----
|                                   |  | Total |        |   | 2009 |   |        | 2010 |  |   | 2011   |   |  | 2012 |        | 2013 |  | Thereafter
|Operating commitments:             |  |       |        |   |      |   |        |      |  |   |        |   |  |      |        |      |  |            |       |  |   |        |  |   |      
|Debt principal                     |  | $     | 44,558 |   |      | $ | 2,033  |      |  | $ | 2,148  |   |  | $    | 2,269  |      |  | $          | 2,397 |  | $ | 35,711 |  | $ |     
|Debt interest                      |  |       | 10,168 |   |      |   | 2,400  |      |  |   | 2,285  |   |  |      | 2,164  |      |  |            | 2,036 |  |   | 1,283  |  |   |     
|Operating leases                   |  |       | 31,406 |   |      |   | 10,302 |      |  |   | 7,447  |   |  |      | 5,342  |      |  |            | 3,227 |  |   | 2,382  |  |   | 2,706
|                                   |  |       |        |   |      |   |        |      |  |   |        |   |  |      |        |      |  |            |       |  |   |        |  |   |      
|                                   |  |       | 86,132 |   |      |   | 14,735 |      |  |   | 11,880 |   |  |      | 9,775  |      |  |            | 7,660 |  |   | 39,376 |  |   | 2,706
|                                   |  |       |        |   |      |   |        |      |  |   |        |   |  |      |        |      |  |            |       |  |   |        |  |   |      
|Restructuring-related commitments: |  |       |        |   |      |   |        |      |  |   |        |   |  |      |        |      |  |            |       |  |   |        |  |   |      
|Gross lease obligations            |  |       | 15,941 |   |      |   | 7,237  |      |  |   | 8,008  |   |  |      | 652    |      |  |            | 9     |  |   | 9      |  |   | 26   
|Estimated sublease income          |  |       | (6,578 | ) |      |   | (3,243 | )    |  |   | (3,096 | ) |  |      | (239   | )    |  |            |      |  |   |       |  |   |     
|                                   |  |       |        |   |      |   |        |      |  |   |        |   |  |      |        |      |  |            |       |  |   |        |  |   |      
|                                   |  |       | 9,363  |   |      |   | 3,994  |      |  |   | 4,912  |   |  |      | 413    |      |  |            | 9     |  |   | 9      |  |   | 26   
|                                   |  |       |        |   |      |   |        |      |  |   |        |   |  |      |        |      |  |            |       |  |   |        |  |   |      
|Total commitments                  |  | $     | 95,495 |   |      | $ | 18,729 |      |  | $ | 16,792 |   |  | $    | 10,188 |      |  | $          | 7,669 |  | $ | 39,385 |  | $ | 2,732
|                                   |  |       |        |   |      |   |        |      |  |   |        |   |  |      |        |      |  |            |       |  |   |        |  |   |      



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TIBCO SOFTWARE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)



Future minimum lease payments under restructured non-cancelable operating leases as of
November 30, 2008, are included in Accrued Restructuring and Excess Facilities Costs on our Consolidated Balance Sheets; see Note 8 for further details.

The above commitment table does not include approximately $12.4 million of long-term income tax liabilities recorded in accordance with FIN 48 due to the fact that we are unable to reasonably estimate the timing of
these potential future payments.

Derivative Instruments

We conduct business in the Americas; Europe, the Middle East and Africa (EMEA); and Asia Pacific and Japan (APJ). As a result, our financial results could be affected by factors such as changes
in foreign currency exchange rates or changes in economic conditions in foreign markets. The majority of our sales are currently made in U.S. dollars. In addition, we transact business in approximately 20 foreign currencies worldwide, of which the
most significant to our operations in fiscal year 2008 was the EURO. We enter into forward contracts with financial institutions to manage our currency exposure related to net assets and liabilities denominated in foreign currencies, and these
forward contracts are generally settled monthly. Our forward contracts reduce, but do not eliminate, the impact of currency exchange rate movements. We do not enter into derivative financial instruments for trading purposes. Gains and losses on
forward contracts are included in Other Income (Expense) in our Consolidated Statements of Operations.

We had seven outstanding forward
contracts with a total notional amount of $51.6 million as of November 30, 2008, which are summarized as follows (in thousands):



|                        |  |                             |  |                  |        |                          |   |     |  
|----------------------- |  | --------------------------- |  | ---------------- | ------ | ------------------------ | - | --- | -
|                        |  | NotionalValueLocal Currency |  | NotionalValueUSD |        | Fair ValueGain (Loss)USD |  
|Forward contracts sold: |  |                             |  |                  |        |                          |   |     |  
|EURO                    |  | 29,800                      |  | $                | 38,204 |                          | $ | 555 |  
|Australian dollar       |  | 1,200                       |  |                  | 775    |                          |   | 1   |  
|British pound           |  | 2,500                       |  |                  | 3,805  |                          |   | 43  |  
|Japanese yen            |  | 82,000                      |  |                  | 860    |                          |   | 5   |  
|South African rand      |  | 64,000                      |  |                  | 6,397  |                          |   | 74  |  
|Swiss franc             |  | 1,100                       |  |                  | 913    |                          |   | 16  |  
|New Taiwan dollar       |  | 22,000                      |  |                  | 659    |                          |   | (6  | )
|                        |  |                             |  |                  |        |                          |   |     |  
|                        |  |                             |  | $                | 51,613 |                          | $ | 688 |  
|                        |  |                             |  |                  |        |                          |   |     |  

Indemnifications

Our software license agreements typically provide for indemnification of customers for intellectual property infringement claims. To date, no such claims have been filed against us. We also warrant to customers that
software products operate substantially in accordance with the software products specifications. Historically, we have incurred minimal costs related to product warranties, and, as such, no accruals for warranty costs have been made. In
addition, we indemnify our officers and directors under the terms of indemnity agreements entered into with them, as well as pursuant to our certificate of incorporation, bylaws and applicable Delaware law.

To date, we have incurred costs for the payment of legal fees in connection with the legal proceedings detailed in Note 12.



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TIBCO SOFTWARE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)



12.    Legal Proceedings

IPO Allocation Suit

We, certain of our directors and officers, and certain investment bank
underwriters have been named in a putative class action for violation of the federal securities laws in the United States District Court for the Southern District of New York, captioned In re TIBCO Software Inc. Initial Public Offering
Securities Litigation. This is one of a number of cases challenging underwriting practices in the initial public offerings (each, an IPO) of more than 300 companies, which have been coordinated for pretrial proceedings as In
re Initial Public Offering Securities Litigation. Plaintiffs generally allege that the underwriters engaged in undisclosed and improper underwriting activities, namely the receipt of excessive brokerage commissions and customer agreements
regarding post-offering purchases of stock in exchange for allocations of IPO shares. Plaintiffs also allege that various investment bank securities analysts issued false and misleading analyst reports. The complaint against us claims that the
purported improper underwriting activities were not disclosed in the registration statements for our IPO and secondary public offering and seeks unspecified damages on behalf of a purported class of persons who purchased our securities or sold put
options during the time period from July 13, 1999 to December 6, 2000.

A lawsuit with similar allegations of undisclosed
improper underwriting practices, and part of the same coordinated proceedings, is pending against Talarian, which we acquired in 2002. That action is captioned In re Talarian Corp. Initial Public Offering Securities Litigation. The
complaint against Talarian, certain of its underwriters and certain of its former directors and officers claims that the purported improper underwriting activities were not disclosed in the registration statement for Talarians IPO and seeks
unspecified damages on behalf of a purported class of persons who purchased Talarian securities during the time period from July 20, 2000, to December 6, 2000.

In 2004, a stipulation of Settlement (the Settlement) was submitted to the Court, and in 2005, the Court granted preliminary approval. Under the Settlement, we and our subsidiary Talarian would have been
dismissed of all claims in exchange for a contingent payment guarantee by the insurance companies responsible for insuring us and Talarian as issuers. Class certification was a condition of the Settlement. After the Second Circuit Court of Appeals
issued a ruling overturning class certification in six test cases for the coordinated proceedings, the Settlement was terminated in June 2007 by stipulation of the parties and order of the Court. On August 14, 2007, plaintiffs filed amended
master allegations and amended complaints in the six test cases. On March 26, 2008, the Court denied the defendants motion to dismiss the amended complaints in the six test cases. It is uncertain whether there will be any revised or
future settlement. If no settlement is achieved, we believe that we and Talarian have meritorious defenses and intend to defend the actions vigorously. However, the litigation results cannot be predicted at this point.

13.    Stockholders Equity

Preferred
Stock

Our certificate of incorporation, as amended and restated, authorizes us to issue 75.0 million shares of $0.001 par
value preferred stock. As of November 30, 2008, no preferred stock was issued or outstanding.

Common Stock

Our certificate of incorporation, as amended and restated, authorizes us to issue 1.2 billion shares of $0.001 par value common stock. As of
November 30, 2008, approximately 174,296,000 shares of common stock were issued and outstanding. The outstanding shares of common stock as of November 30, 2008 include



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approximately 3,362,000 shares of restricted stock. All of the outstanding shares of restricted stock remain unvested as of November 30, 2008. The
balance of unvested restricted stock will be forfeited and automatically transferred back to the Company at no cost upon the recipients discontinuing employment for any reason.

Adoption of Stockholder Rights Plan

In February 2004, our Board of Directors adopted a
stockholder rights plan designed to guard against partial tender offers and other coercive tactics to gain control of the Company without offering a fair and adequate price and terms to all of our stockholders.

In connection with the plan, the Board of Directors declared a dividend of one right (a Right) to purchase one one-thousandth share of our
Series A Participating Preferred Stock (Series A Preferred) for each share of our common stock outstanding on March 5, 2004 (the Record Date). Of the 75.0 million shares of preferred stock authorized under our
certificate of incorporation, as amended and restated, 25.0 million have been designated as Series A Preferred. The Board of Directors further directed the issuance of one such right with respect to each share of our common stock that is issued
after the Record Date, except in certain circumstances. The rights will expire on March 5, 2014.

The Rights are initially attached to
our common stock and will not be traded separately. If a person or a group (an Acquiring Person) acquires 15% or more of our common stock, or announces an intention to make a tender offer for 15% or more of our common stock, the Rights
will be distributed and will thereafter be traded separately from the common stock. Each Right will be exercisable for 1/1000th of a share of Series A Preferred at an exercise price of $70 (the Purchase Price). The Series A Preferred has
been structured so that the value of 1/1000th of a share of such preferred stock will approximate the value of one share of common stock. Upon a person becoming an Acquiring Person, holders of the Rights (other than the Acquiring Person) will have
the right to receive, upon exercise, shares of our common stock having a value equal to two times the Purchase Price.

If a person becomes
an Acquiring Person and we are acquired in a merger or other business combination, or 50% or more of our assets are sold to an Acquiring Person, the holder of Rights (other than the Acquiring Person) will have the right to receive shares of common
stock of the acquiring corporation having a value equal to two times the Purchase Price. After a person has become an Acquiring Person, our Board of Directors may, at its option, require the exchange of outstanding Rights (other than those held by
the Acquiring Person) for common stock at an exchange ratio of one share of our common stock per Right.

The Board may redeem outstanding
rights at any time prior to a person becoming an Acquiring Person at a price of $0.001 per Right. Prior to such time, the terms of the Rights may be amended by the Board of Directors.

Stock Repurchase Programs

In December 2005, our Board of Directors approved an eighteen-month
stock repurchase program pursuant to which we were authorized to repurchase up to $100.0 million of our outstanding common stock. In December 2006, our Board of Directors approved an eighteen-month stock repurchase program pursuant to which we were
authorized to repurchase up to $100.0 million of our outstanding common stock. In connection with approving the December 2006 stock repurchase program, the December 2005 stock repurchase program was terminated and the remaining authorized amount of
$23.3 million under the December 2005 stock repurchase program was canceled at the end of fiscal year 2006.

In April 2007, our Board of
Directors approved a stock repurchase program pursuant to which were authorized to repurchase up to $300.0 million of our outstanding common stock from time to time in the open market or through privately negotiated transactions. In connection with
approving the April 2007 stock



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repurchase program, the December 2006 stock repurchase program was terminated and the remaining authorized amount of $58.2 million under the December 2006
stock repurchase program was canceled.

In April 2008, our Board of Directors approved a new stock repurchase program pursuant to which we
may repurchase up to $300.0 million of our outstanding common stock. In connection with the approval of the April 2008 stock repurchase program, the April 2007 stock repurchase program was terminated and the remaining authorized amount of $69.6
million under the April 2007 stock repurchase program was canceled. As of November 30, 2008, we had $196.3 million available for purchases under the April 2008 stock repurchase program.

All repurchased shares of common stock have been retired. The following table summarizes the activities under the stock repurchase programs for the
periods indicated (in thousands, except per share data):



|                          |  |                         |         |      |   |         |  |   |       
|------------------------- |  | ----------------------- | ------- | ---- | - | ------- |  | - | ------
|                          |  | Year Ended November 30,
|                          |  | 2008                    |         | 2007 |   | 2006   
|Cash used for repurchases |  | $                       | 148,989 |      | $ | 226,932 |  | $ | 77,672
|                          |  |                         |         |      |   |         |  |   |       
|Shares repurchased        |  |                         | 21,271  |      |   | 25,575  |  |   | 9,893 
|                          |  |                         |         |      |   |         |  |   |       
|Average price per share   |  | $                       | 7.00    |      | $ | 8.87    |  | $ | 7.85  
|                          |  |                         |         |      |   |         |  |   |       

In connection with the repurchase activities during fiscal years 2008 and 2007, we classified
$56.5 million and $49.9 million of the excess purchase price over the par value of our common stock to retained earnings and $92.5 million and $177.0 million, respectively, to additional paid-in capital.

14.    Stock Benefit Plans and Stock-Based Compensation

Stock Benefit Plans

2008 Equity Incentive Plan (the 2008 Plan).On
August 1, 2008, the 2008 Plan replaced the 1996 Stock Option Plan and the 1998 Director Option Plan. As of November 30, 2008, there were 14.0 million shares available for grant under the 2008 Plan and 0.2 million shares
underlying stock options and awards outstanding under the 2008 Plan.

1996 Stock Option Plan (the 1996
Plan).On August 1, 2008, the 1996 Plan was retired and replaced with the 2008 Plan. As of November 30, 2008, there were no shares available for grant and 35.0 million underlying stock options and
awards outstanding under the 1996 Plan.

Stock options granted under the 2008 and 1996 Plans may be either incentive stock options or
nonqualified stock options. Incentive stock options may be granted only to employees (including officers and directors who are employees). Nonqualified stock options may be granted to our employees and consultants. Stock options are granted
generally at fair market value on the date of grant and generally vest over four years. Generally, stock options granted from the 1996 Plan prior to December 1, 2005 have a contractual term of ten years from the date of grant, and stock options
granted from the 1996 Plan on or after December 1, 2005 and stock options granted from the 2008 Plan, have a contractual term of seven years from the date of grant.

In addition to stock options, we issue restricted stock or restricted stock units to our employees (including officers and directors who are employees). Shares of restricted stock are issued at the time of grant, but
held in escrow until they are vested. The recipient of restricted stock becomes the owner of record of the stock immediately upon grant, subject to certain restrictions. The balance of unvested restricted stock will be forfeited



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and automatically transferred back to the Company at no cost upon the termination of the recipients employment. Upon vesting of restricted stock, the
recipient has the option to settle minimum withholding taxes by electing to have the Company withhold otherwise deliverable shares having a fair market value equal to the required tax obligations (net-settlement). The net-settlement
shares are then immediately cancelled and retired. As vesting of restricted stock units occur, common stock is issued. The recipient of restricted stock units does not acquire any rights as a stockholder until the restricted stock units are settled
upon vesting and the recipient actually receives shares of our common stock.

Our stock option agreements and stock award agreements
generally provide for partial accelerated vesting if there is a change in control of the Company. We have entered into an employment agreement with our CEO that provides for varying levels of accelerated vesting upon the occurrence of certain
events. In addition, we have a change in control and severance plan that provides certain of our employees with partial accelerated vesting in the event that their employment is terminated within twelve months of a change in control of TIBCO.

1998 Director Option Plan (the Director Plan).    In February 1998, we adopted the Director Plan.
On August 1, 2008, the Director Plan was retired and replaced by the 2008 Plan. As of November 30, 2008, no shares were available for grant and approximately 1.2 million shares underlying stock options were outstanding under the
Director Plan.

Insightful Corporation Amended and Restated 2001 Stock Option and Incentive Plan (the Insightful
Plan).In September 2008, we assumed the Insightful Plan in connection with our acquisition of Insightful. At the date of acquisition, all options of Insightful common stock that were outstanding under the
Insightful Plan were converted, according to an exchange ratio, into options of our common stock with terms and conditions equivalent to those applicable at the time of conversion. As of November 30, 2008, 0.4 million shares were available
for grant and approximately 0.5 million shares underlying stock options and awards were outstanding under the Insightful Plan.

Talarian Stock Option Plans (the Talarian Plans).    In April 2003, we assumed all of the Talarian Plans in connection with our acquisition of Talarian. At the date of acquisition, all outstanding
options of Talarian common stock were converted, according to an exchange ratio, into options of our common stock with terms and conditions equivalent to those applicable at the time of conversion. As of November 30, 2008, there were no shares
reserved for grant and approximately 23,000 shares underlying options outstanding under the Talarian Plans.

2000 Extensibility Stock
Option Plan (the Extensibility Plan).    In 2000, we assumed the Extensibility Plan in connection with options assumed in our acquisition of Extensibility. Extensibility employees who continued service with us
were granted options with terms and conditions equivalent to those applicable at the date of acquisition. As of November 30, 2008, there were no shares reserved for grant and approximately 23,000 shares underlying options outstanding under the
Extensibility Plan.

2008 Employee Stock Purchase Plan (the 2008 ESPP).On August 1, 2008,
we adopted the 2008 ESPP replacing the Employee Stock Purchase Program (the ESPP)pursuant to the 1996 Plan. The 2008 ESPP provides for the issuance of up to 10.0 million shares of our common stock.

Employees are generally eligible to participate in the 2008 ESPP if they are employed by us for more than 20 hours per week and more than five months in
a calendar year and are not (and would not become as a result of being granted an option under the 2008 ESPP) 5% stockholders of the Company. Certain of our international employees are also eligible to participate. Under the 2008 ESPP, eligible
employees may select a rate of payroll deduction from 1% to 10% of their eligible compensation subject to certain maximum purchase limitations.



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Under the 2008 ESPP, participants are entitled to purchase shares at 85% of the lesser of the fair market value of our common stock on either the first or
last trading day of each six-month offering period. Participants may contribute a maximum amount of $2,500 per offering period and no contribution percentage changes are allowed during an offering period.

We issued approximately 0.5 million, 0.4 million and 0.3 million shares for $3.6 million, $2.9 million and $2.0 million in employee
contributions for the fiscal years 2008, 2007 and 2006, respectively under the ESPP.

Stock Options Activities

The summary of stock option activity in fiscal years 2008, 2007 and 2006 is presented below (in thousands, except per share data):



|                                                 |  |                                  |   |  |                               |      |                                                 |      |                         |   |      
|------------------------------------------------ |  | -------------------------------- | - |  | ----------------------------- | ---- | ----------------------------------------------- | ---- | ----------------------- | - | -----
|Stock Options                                    |  | Number ofSharesUnderlyingOptions |   |  | Weighted-AverageExercisePrice |      | Weighted-AverageRemainingContractualTerm (year) |      | AggregateIntrinsicValue
|Outstanding at November 30, 2005                 |  | 46,266                           |   |  | $                             | 7.01 |                                                 |      |                         |   |      
|Granted                                          |  | 3,512                            |   |  |                               | 7.65 |                                                 |      |                         |   |      
|Exercised                                        |  | (9,115                           | ) |  |                               | 2.23 |                                                 |      |                         |   |      
|Forfeited or expired                             |  | (2,202                           | ) |  |                               | 8.91 |                                                 |      |                         |   |      
|                                                 |  |                                  |   |  |                               |      |                                                 |      |                         |   |      
|Outstanding at November 30, 2006                 |  | 38,461                           |   |  |                               | 8.09 |                                                 |      |                         |   |      
|Granted                                          |  | 5,200                            |   |  |                               | 7.90 |                                                 |      |                         |   |      
|Exercised                                        |  | (3,994                           | ) |  |                               | 5.70 |                                                 |      |                         |   |      
|Forfeited or expired                             |  | (2,029                           | ) |  |                               | 8.92 |                                                 |      |                         |   |      
|                                                 |  |                                  |   |  |                               |      |                                                 |      |                         |   |      
|Outstanding at November 30, 2007                 |  | 37,638                           |   |  |                               | 8.27 |                                                 |      |                         |   |      
|Assumed in acquisitions                          |  | 515                              |   |  |                               | 8.85 |                                                 |      |                         |   |      
|Granted                                          |  | 3,037                            |   |  |                               | 7.67 |                                                 |      |                         |   |      
|Exercised                                        |  | (2,059                           | ) |  |                               | 4.20 |                                                 |      |                         |   |      
|Forfeited or expired                             |  | (2,841                           | ) |  |                               | 9.77 |                                                 |      |                         |   |      
|                                                 |  |                                  |   |  |                               |      |                                                 |      |                         |   |      
|Outstanding at November 30, 2008                 |  | 36,290                           |   |  | $                             | 8.34 |                                                 | 4.51 |                         | $ | 3,348
|                                                 |  |                                  |   |  |                               |      |                                                 |      |                         |   |      
|Vested and expected to vest at November 30, 2008 |  | 35,130                           |   |  | $                             | 8.36 |                                                 | 4.46 |                         | $ | 3,301
|                                                 |  |                                  |   |  |                               |      |                                                 |      |                         |   |      
|Exercisable at November 30, 2008                 |  | 29,244                           |   |  | $                             | 8.48 |                                                 | 4.17 |                         | $ | 2,920
|                                                 |  |                                  |   |  |                               |      |                                                 |      |                         |   |      

The intrinsic value of exercised stock options is calculated based on the difference between the
exercise price and the quoted market price of our common stock as of the close of the exercise date. The total intrinsic value of stock options exercised in fiscal years 2008, 2007 and 2006 was $7.1 million, $13.3 million and $52.5 million,
respectively. Upon the exercise of stock options, we issue common stock from our authorized shares. As of November 30, 2008, total unamortized stock-based compensation cost related to unvested stock options was $17.6 million, with the
weighted-average remaining recognition period of 2.48 years. Total fair value of stock options vested and expensed in fiscal year 2008, 2007 and 2006 was $15.5 million, $13.6 million and $13.5 million, respectively, net of taxes.

The total realized tax benefits attributable to stock options exercised and vesting of stock awards were $27.0 million, $19.5 million and $24.7 million
in fiscal year 2008, 2007 and 2006, respectively. The gross excess tax benefits from stock-based compensation were $24.7 million, $18.0 million and $21.5 million in the fiscal years



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2008, 2007, and 2006, respectively, as reported on the Consolidated Statements of Cash Flows in financing activities. The excess tax benefits represent the
reduction in income taxes otherwise payable during the period which are attributable to the actual gross tax benefits in excess of the expected tax benefits for stock options exercised in current and prior periods.

All vested stock options are exercisable. The following table summarizes information about stock options outstanding and exercisable as of
November 30, 2008 (in thousands, except number of years and per share data):



|                         |  |                                  |  |                                                  |  |                                         |       |                                  |        |                                         |   |      
|------------------------ |  | -------------------------------- |  | ------------------------------------------------ |  | --------------------------------------- | ----- | -------------------------------- | ------ | --------------------------------------- | - | -----
|                         |  | Options Outstanding              |  | Options Exercisable                             
|Range of Exercise Prices |  | Number ofSharesUnderlyingOptions |  | Weighted-AverageRemainingContractual Life(Years) |  | Weighted-AverageExercise Priceper Share |       | Number ofSharesUnderlyingOptions |        | Weighted-AverageExercise Priceper Share
|$ 0.96 to $ 5.55         |  | 3,211                            |  | 3.77                                             |  | $                                       | 3.83  |                                  | 2,850  |                                         | $ | 3.85 
|5.73 to    6.29          |  | 3,297                            |  | 4.41                                             |  |                                         | 6.04  |                                  | 3,293  |                                         |   | 6.04 
|6.41 to    7.23          |  | 4,592                            |  | 6.23                                             |  |                                         | 6.71  |                                  | 3,779  |                                         |   | 6.68 
|7.24 to    7.30          |  | 4,983                            |  | 5.15                                             |  |                                         | 7.30  |                                  | 4,195  |                                         |   | 7.30 
|7.31 to    7.95          |  | 4,137                            |  | 5.81                                             |  |                                         | 7.76  |                                  | 1,538  |                                         |   | 7.77 
|7.98 to    8.59          |  | 4,775                            |  | 3.43                                             |  |                                         | 8.08  |                                  | 4,449  |                                         |   | 8.08 
|8.60 to  11.44           |  | 4,452                            |  | 4.89                                             |  |                                         | 9.21  |                                  | 2,308  |                                         |   | 9.43 
|11.49 to  12.74          |  | 4,865                            |  | 3.08                                             |  |                                         | 11.77 |                                  | 4,857  |                                         |   | 11.77
|12.77 to  71.81          |  | 1,978                            |  | 2.68                                             |  |                                         | 17.41 |                                  | 1,975  |                                         |   | 17.42
|                         |  |                                  |  |                                                  |  |                                         |       |                                  |        |                                         |   |      
|                         |  | 36,290                           |  | 4.50                                             |  |                                         | 8.34  |                                  | 29,244 |                                         |   | 8.48 
|                         |  |                                  |  |                                                  |  |                                         |       |                                  |        |                                         |   |      

Stock Awards Activities

Our nonvested stock awards are comprised of restricted stock and restricted stock units. A summary of the status for nonvested stock awards as of
November 30, 2008, and activities during fiscal years 2008, 2007 and 2006, is presented as follows (in thousands, except per share data):



|                               |  |                 |   |  |                      |   |  |                                       |   |  |                                      |     
|------------------------------ |  | --------------- | - |  | -------------------- | - |  | ------------------------------------- | - |  | ------------------------------------ | ----
|Nonvested Stock Awards         |  | RestrictedStock |   |  | RestrictedStockUnits |   |  | Total ofShares NumberUnderlyingAwards |   |  | Weighted-AverageGrant-DateFair Value
|Nonvested at November 30, 2005 |  |                |   |  |                     |   |  |                                      |   |  |                                      |    
|Granted                        |  | 1,195           |   |  | 322                  |   |  | 1,517                                 |   |  | $                                    | 7.34
|Forfeited                      |  | (18             | ) |  | (3                   | ) |  | (21                                   | ) |  |                                      | 7.33
|                               |  |                 |   |  |                      |   |  |                                       |   |  |                                      |     
|Nonvested at November 30, 2006 |  | 1,177           |   |  | 319                  |   |  | 1,496                                 |   |  |                                      | 7.34
|Granted                        |  | 1,321           |   |  | 396                  |   |  | 1,717                                 |   |  |                                      | 8.89
|Vested                         |  | (271            | ) |  | (74                  | ) |  | (345                                  | ) |  |                                      | 7.34
|Forfeited                      |  | (185            | ) |  | (63                  | ) |  | (248                                  | ) |  |                                      | 7.94
|                               |  |                 |   |  |                      |   |  |                                       |   |  |                                      |     
|Nonvested at November 30, 2007 |  | 2,042           |   |  | 578                  |   |  | 2,620                                 |   |  |                                      | 8.28
|Granted                        |  | 2,058           |   |  | 412                  |   |  | 2,470                                 |   |  |                                      | 7.76
|Vested                         |  | (537            | ) |  | (153                 | ) |  | (690                                  | ) |  |                                      | 8.18
|Forfeited                      |  | (200            | ) |  | (75                  | ) |  | (275                                  | ) |  |                                      | 8.17
|                               |  |                 |   |  |                      |   |  |                                       |   |  |                                      |     
|Nonvested at November 30, 2008 |  | 3,363           |   |  | 762                  |   |  | 4,125                                 |   |  |                                      | 7.99
|                               |  |                 |   |  |                      |   |  |                                       |   |  |                                      |     



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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)



We granted nonvested stock awards at no cost to recipients during fiscal years 2008, 2007 and 2006.
As of November 30, 2008, there was $24.8 million of total unrecognized compensation cost related to nonvested stock awards. That cost is expected to be recognized generally on a straight-line basis as the shares vest over three to four years
(the weighted-average recognition period of 2.76 years). The total fair value of shares vested pursuant to stock awards during fiscal year 2008 and 2007 were $5.6 million and $2.5 million, respectively.

Stock-Based Compensation

Stock-based
compensation expense in fiscal year 2008, 2007 and 2006 were $21.0 million, $17.6 million, and $15.8 million, respectively, which consisted primarily of stock-based compensation expense related to employee stock options recognized under SFAS
No. 123(R) (revised 2004), Share-Based Payment (SFAS No. 123(R)). The tax effect on employee stock-based compensation in fiscal years 2008, 2007 and 2006 were $5.5 million, $4.0 million and $2.3 million, respectively. We
did not capitalize any stock-based compensation in any of the fiscal periods reported.

We started granting restricted stock and restricted
stock units to employees in fiscal year 2006. Approximately $8.5 million and $4.3 million of employee stock-based compensation for the fiscal years 2008 and 2007, respectively, were related to restricted stock and restricted stock units.

We recognized stock-based compensation cost associated with our employee stock purchase programs on a straight-line basis over each six-month offering
period. Employee stock-based compensation associated with our employee stock purchase programs for the fiscal year 2008 and 2007 was approximately $1.2 million and $0.9 million, respectively. In fiscal year 2005, the ESPP was revised effective from
the purchase period beginning February 1, 2005. The revised ESPP was deemed non-compensatory under the provisions of SFAS No. 123(R). Accordingly, there was no compensation cost recorded for our ESPP under SFAS No. 123(R) in fiscal
year 2006 until we further revised the ESPP in fiscal year 2007 to a compensatory plan and valued the ESPP using the Black-Scholes option pricing model at each offering period effective from the purchase period beginning February 1, 2007.

Prior to the adoption of SFAS No. 123(R), we presented unearned stock-based compensation as a separate component of
stockholders equity. In accordance with the provisions of SFAS No. 123(R), on December 1, 2005, we reclassified the remaining unamortized balance in deferred stock-based compensation to additional paid-in capital on the Consolidated
Balance Sheets.



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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)



Assumptions for Estimating Fair Value of Stock-Based Awards

Upon adoption of SFAS No. 123(R), we selected the Black-Scholes option pricing model as the most appropriate model for determining the estimated fair
value for stock-based awards including stock options and ESPP. The use of the Black-Scholes model requires the use of extensive actual employee exercise behavior data and the use of a number of complex assumptions including expected volatility,
risk-free interest rate and expected dividends. The following table summarizes the assumptions used to value options granted in the respective periods:



|                                                   |  |                         |           |   |      |   |           |      |  |   |           |  
|-------------------------------------------------- |  | ----------------------- | --------- | - | ---- | - | --------- | ---- |  | - | --------- | -
|                                                   |  | Year Ended November 30, |          
|                                                   |  | 2008                    |           |   | 2007 |   |           | 2006 | 
|Stock Option grants:                               |  |                         |           |   |      |   |           |      |  |   |           |  
|Expected term of stock options (years)             |  |                         | 4.6  4.9 |   |      |   | 4.4  4.6 |      |  |   | 4.3  4.6 |  
|Risk-free interest rate                            |  |                         | 2.6  3.4 | % |      |   | 3.8  4.7 | %    |  |   | 4.5  5.0 | %
|Volatility                                         |  |                         | 45  48   | % |      |   | 39        | %    |  |   | 40  43   | %
|Weighted-average grant-date fair value (per share) |  | $                       | 3.40      |   |      | $ | 3.92      |      |  | $ | 3.14      |  
|ESPP                                               |  |                         |           |   |      |   |           |      |  |   |           |  
|Expected term of ESPP (years)                      |  |                         | 0.5       |   |      |   | 0.5       |      |  |   | n/a       |  
|Risk-free interest rate                            |  |                         | 1.9  2.2 | % |      |   | 5.0  5.2 | %    |  |   | n/a       |  
|Volatility                                         |  |                         | 42  54   | % |      |   | 32  34   | %    |  |   | n/a       |  
|Weighted-average grant-date fair value (per share) |  | $                       | 2.34      |   |      | $ | 3.92      |      |  |   | n/a       |  

We estimated the volatility of our stock using historical volatility, as well as the implied
volatility in market-traded options on our common stock in accordance with guidance in SFAS No. 123(R) and SAB No. 107. We determined that a blend of implied volatility and historical volatility is more reflective of market conditions and
a better indicator of expected volatility than using purely historical volatility. We will continue to monitor these and other relevant factors used to measure expected volatility for future stock option grants.

The expected term of employee stock options represents the weighted-average period that the stock options are expected to remain outstanding. We derived
the expected term assumption based on our historical settlement experience, while giving consideration to stock options that have life cycles less than the contractual terms and vesting schedules in accordance with guidance in SFAS No. 123(R)
and SAB No. 107.

The risk-free interest rate assumption is based upon observed interest rates appropriate for the expected term of
our employee stock options. The dividend yield assumption is based on our history and expectation of dividend payouts. We have never declared or paid any cash dividends on our common stock, and we do not anticipate paying any cash dividends in the
foreseeable future.

As stock-based compensation expense recognized in our Consolidated Statement of Operations is based on awards
ultimately expected to vest, the amount has been reduced for estimated forfeitures. SFAS No. 123(R) requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from
those estimates. Forfeitures were estimated based on our historical experience.

In accordance with SFAS No. 123(R), the fair value of
restricted stock and restricted stock units is the grant date closing price of our common stock. We expense the cost of the restricted stock and restricted stock units ratably over the period during which the restrictions lapse, and adjust for
estimated forfeitures.



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TIBCO SOFTWARE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)



Accuracy of Fair Value Estimates

Our determination of fair value of stock-based payment awards on the date of grant using an option-pricing model is affected by our stock price, as well
as assumptions regarding a number of highly complex and subjective variables. These variables include, but are not limited to, our expected stock price volatility over the term of the awards, and actual and projected employee stock option exercise
behaviors. In the future, as empirical evidence regarding these input estimates is available to provide more directionally predictive results, we may change or refine our approach of deriving these input estimates. These changes could impact our
fair value of stock options granted in the future. Changes in the fair value of the stock options could materially impact our operating results and financial position.

15.    Comprehensive Income (Loss)

Our comprehensive income (loss) includes net
income and other comprehensive income (loss), which consists of unrealized gains and losses on available-for-sale securities and cumulative translation adjustments.

Total comprehensive income (loss) in fiscal years 2008, 2007 and 2006 are presented in the Consolidated Statements of Stockholders Equity and Comprehensive Income (Loss). Total Accumulated Other Comprehensive
Income (Loss) is displayed as a separate component of Stockholders Equity in the accompanying Consolidated Balance Sheets. The balances of each component of Accumulated Other Comprehensive Income (Loss), net of taxes, consist of the following
(in thousands):



|                                                        |  |              |         |   |      |   |        |  |   |        |  
|------------------------------------------------------- |  | ------------ | ------- | - | ---- | - | ------ |  | - | ------ | -
|                                                        |  | November 30, |        
|                                                        |  | 2008         |         |   | 2007 |   | 2006   | 
|Cumulative translation adjustment, net of tax           |  | $            | (44,451 | ) |      | $ | 32,636 |  | $ | 11,122 |  
|Unrealized gain (loss) on available-for-sale securities |  |              | 26      |   |      |   | 357    |  |   | (313   | )
|                                                        |  |              |         |   |      |   |        |  |   |        |  
|Total accumulated other comprehensive income (loss)     |  | $            | (44,425 | ) |      | $ | 32,993 |  | $ | 10,809 |  
|                                                        |  |              |         |   |      |   |        |  |   |        |  

As of November 30, 2008, 2007 and 2006, cumulative translation adjustment included total
accumulated tax effects of $10.7 million, $(8.9) million and $(5.0) million, respectively.

16.    Minority Interest

In the first quarter of fiscal year 2007, we established a joint venture in South Africa, TS Innovations Limited (Innovations), with a
local South Africa corporation, to assist with our sales efforts as well as to provide consulting services and training to our customers in the Sub-Saharan Africa region. For the year ended November 30, 2008, Innovations had total assets of
$0.9 million and total revenues of $3.9 million. As of November 30, 2008, we owned a 74.9% interest in the joint venture. Because of this majority interest, our Consolidated Financial Statements include the balance sheets, results of operations
and cash flows of Innovations, net of intercompany charges. We therefore eliminated 25.1% of financial results that pertain to the minority interest; the eliminated amount was reported as a separate line on our Consolidated Statements of Operations
and Balance Sheets.



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TIBCO SOFTWARE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)



17.    Income Taxes

Income before provision for income taxes consisted of the following (in thousands):



|              |  |                         |        |      |   |        |  |   |       
|------------- |  | ----------------------- | ------ | ---- | - | ------ |  | - | ------
|              |  | Year Ended November 30,
|              |  | 2008                    |        | 2007 |   | 2006  
|United States |  | $                       | 45,241 |      | $ | 52,928 |  | $ | 73,210
|International |  |                         | 25,589 |      |   | 24,471 |  |   | 17,348
|              |  |                         |        |      |   |        |  |   |       
|              |  | $                       | 70,830 |      | $ | 77,399 |  | $ | 90,558
|              |  |                         |        |      |   |        |  |   |       

Significant components of the provision for (benefit from) income taxes are as follows (in
thousands):



|                           |  |                         |         |   |      |   |        |      |  |   |         |  
|-------------------------- |  | ----------------------- | ------- | - | ---- | - | ------ | ---- |  | - | ------- | -
|                           |  | Year Ended November 30, |        
|                           |  | 2008                    |         |   | 2007 |   |        | 2006 | 
|Federal:                   |  |                         |         |   |      |   |        |      |  |   |         |  
|Current                    |  | $                       | 20,497  |   |      | $ | 18,971 |      |  | $ | 22,904  |  
|Deferred                   |  |                         | (12,376 | ) |      |   | (1,887 | )    |  |   | (3,133  | )
|                           |  |                         |         |   |      |   |        |      |  |   |         |  
|                           |  |                         | 8,121   |   |      |   | 17,084 |      |  |   | 19,771  |  
|                           |  |                         |         |   |      |   |        |      |  |   |         |  
|State:                     |  |                         |         |   |      |   |        |      |  |   |         |  
|Current                    |  |                         | 3,711   |   |      |   | 1,756  |      |  |   | 2,874   |  
|Deferred                   |  |                         | (2,880  | ) |      |   | (34    | )    |  |   | (12,627 | )
|                           |  |                         |         |   |      |   |        |      |  |   |         |  
|                           |  |                         | 831     |   |      |   | 1,722  |      |  |   | (9,753  | )
|                           |  |                         |         |   |      |   |        |      |  |   |         |  
|Foreign:                   |  |                         |         |   |      |   |        |      |  |   |         |  
|Current                    |  |                         | 20,300  |   |      |   | 10,751 |      |  |   | 11,465  |  
|Deferred                   |  |                         | (10,938 | ) |      |   | (4,156 | )    |  |   | (3,789  | )
|                           |  |                         |         |   |      |   |        |      |  |   |         |  
|                           |  |                         | 9,362   |   |      |   | 6,595  |      |  |   | 7,676   |  
|                           |  |                         |         |   |      |   |        |      |  |   |         |  
|Provision for income taxes |  | $                       | 18,314  |   |      | $ | 25,401 |      |  | $ | 17,694  |  
|                           |  |                         |         |   |      |   |        |      |  |   |         |  

We paid income taxes of $12.6 million, $12.1 million and $15.1 million in fiscal years 2008, 2007
and 2006, respectively.

The provision for income taxes was at rates other than the United States Federal statutory tax rate for the
following reasons:



|                                       |  |                         |   |  |      |   |  |       |  
|-------------------------------------- |  | ----------------------- | - |  | ---- | - |  | ----- | -
|                                       |  | Year Ended November 30, |  
|                                       |  | 2008                    |   |  | 2007 |   |  | 2006  |  
|U.S. Federal statutory rate            |  | 35.0                    | % |  | 35.0 | % |  | 35.0  | %
|State taxes                            |  | 1.2                     |   |  | 1.6  |   |  | 2.3   |  
|Research and development credits       |  | (2.2                    | ) |  | (2.7 | ) |  | (0.4  | )
|Goodwill and intangibles               |  | (0.5                    | ) |  | 0.3  |   |  | (0.4  | )
|Stock option compensation              |  | 3.1                     |   |  | 2.9  |   |  | 3.7   |  
|Foreign income taxed at different rate |  | (7.7                    | ) |  | (3.7 | ) |  | 0.9   |  
|Change in valuation allowance          |  | (1.7                    | ) |  | (2.1 | ) |  | (17.3 | )
|Meals and entertainment                |  | 0.8                     |   |  | 0.7  |   |  | 0.5   |  
|Extraterritorial income exclusion      |  |                        |   |  | (0.1 | ) |  | (4.5  | )
|Other                                  |  | (2.1                    | ) |  | 0.9  |   |  | (0.3  | )
|                                       |  |                         |   |  |      |   |  |       |  
|Provision for income taxes             |  | 25.9                    | % |  | 32.8 | % |  | 19.5  | %
|                                       |  |                         |   |  |      |   |  |       |  



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TIBCO SOFTWARE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)



U.S. income taxes and foreign withholding taxes have not been provided for on a cumulative total of
$38.9 million of undistributed earnings for certain non-U.S. subsidiaries. With the exception of our subsidiaries in the United Kingdom, net undistributed earnings of our foreign subsidiaries are generally considered to be indefinitely reinvested,
and accordingly, no provision for U.S. income taxes has been provided thereon. Upon distribution of these earnings in the form of dividends or otherwise, we will be subject to U.S. income taxes net of available foreign tax credits associated with
these earnings.

While we have not experienced and do not expect any impact to the effective tax rate for U.S. non-qualified stock option
or restricted stock expense due to the adoption of SFAS No. 123(R), the effective tax rate has been and may be negatively impacted by foreign stock option expense that may not be deductible in the foreign jurisdictions. Also, SFAS
No. 123(R) requires that the tax benefit of stock option deductions relating to incentive stock options be recorded in the period of disqualifying disposition. This could result in significant fluctuations in our effective tax rate between
accounting periods.

The components of deferred tax assets (liabilities) are as follows (in thousands):



|                                                   |  |              |         |   |      |   |         |  
|-------------------------------------------------- |  | ------------ | ------- | - | ---- | - | ------- | -
|                                                   |  | November 30, |        
|                                                   |  | 2008         |         |   | 2007 |  
|Deferred tax assets:                               |  |              |         |   |      |   |         |  
|Net operating loss carryforwards                   |  | $            | 27,195  |   |      | $ | 18,720  |  
|Reserves, accruals and foreign related items       |  |              | 23,883  |   |      |   | 21,212  |  
|Credit carryforwards                               |  |              | 13,165  |   |      |   | 12,623  |  
|Depreciation and amortization                      |  |              | 15,194  |   |      |   | 13,771  |  
|Unrealized losses on investments                   |  |              | 5,274   |   |      |   | 5,774   |  
|Deferred revenue                                   |  |              | 5,308   |   |      |   |        |  
|Translation gains/losses                           |  |              | 8,817   |   |      |   |        |  
|Stock compensation expense                         |  |              | 8,105   |   |      |   | 5,038   |  
|Other                                              |  |              | 2,069   |   |      |   | 842     |  
|                                                   |  |              |         |   |      |   |         |  
|                                                   |  |              | 109,010 |   |      |   | 77,980  |  
|Deferred tax liabilities:                          |  |              |         |   |      |   |         |  
|Intangible assets                                  |  |              | (22,100 | ) |      |   | (29,584 | )
|Pre-acquisition receivableSpotfire                |  |              | (4,748  | ) |      |   | (12,582 | )
|Deferred revenue                                   |  |              |        |   |      |   | (4,804  | )
|Translation gains/losses                           |  |              |        |   |      |   | (9,938  | )
|Other                                              |  |              | (405    | ) |      |   | (622    | )
|                                                   |  |              |         |   |      |   |         |  
|                                                   |  |              | (27,253 | ) |      |   | (57,530 | )
|                                                   |  |              |         |   |      |   |         |  
|Net deferred tax assets before valuation allowance |  |              | 81,757  |   |      |   | 20,450  |  
|Valuation allowance                                |  |              | (7,945  | ) |      |   | (9,051  | )
|                                                   |  |              |         |   |      |   |         |  
|Net deferred tax assets                            |  | $            | 73,812  |   |      | $ | 11,399  |  
|                                                   |  |              |         |   |      |   |         |  

As of November 30, 2008, we believed that the amount of the deferred tax assets recorded on
our balance sheet would ultimately be recovered. However, should there be a change in our ability to recover our deferred tax assets, our tax provision would increase in the period in which we determine that it is more likely than not that we cannot
recover our deferred tax assets. If we have to re-establish a full valuation allowance against our deferred tax assets it would result in an increase of $38.6 million to income tax expense.



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TIBCO SOFTWARE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)



We have elected to track the portion of our federal and state net operating loss and tax credit
carryforwards attributable to stock option benefits, in a separate memo account pursuant to SFAS No. 123(R). Therefore, these amounts are no longer included in our gross or net deferred tax assets. Pursuant to SFAS No. 123(R), footnote 82,
the benefit of these net operating loss and tax credit carryforwards will only be recorded to equity when they reduce cash taxes payable. As a result, we recorded a net change of $41.6 million and $10.5 million in fiscal year 2008 and 2007,
respectively, in the memo account resulting from the utilization of net operating loss related to stock option benefits.

Our income taxes
payable for federal purposes have been reduced by the tax benefits associated with the exercise of employee stock options during the fiscal year and utilization of net operating loss carryover applicable to both stock options and acquired entities.
The benefits applicable to stock options were credited directly to stockholders equity when realized and amounted to $27.0 million and $19.5 million for fiscal years 2008 and 2007, respectively.

As of November 30, 2008, our federal and state net operating loss carryforwards for income tax purposes were $313.1 million and $59.9 million,
respectively, which expire through 2027. As of November 30, 2008, our federal and state tax credit carryforwards for income tax purposes were $36.8 million and $29.0 million, respectively. The federal tax credit carryforwards expire in 2028 and
the state tax credit can be carried forward indefinitely.

As of November 30, 2008, our federal and state net operating loss
carryforwards being accounted for in the memo account were $208.6 million and $29.7 million, respectively. As of November 30, 2008, our federal and state tax credit carryforwards being accounted for in the memo account were $34.2 million and
$19.6 million, respectively.

In the event of a change in ownership, as defined under federal and state tax laws, our net operating loss
and tax credit carryforwards may be subject to annual limitations. The annual limitations may result in the expiration of the net operating loss and tax credit carryforwards before utilization.

On December 1, 2007, we adopted FIN 48. FIN 48 requires companies to determine whether it is more likely than not that a tax position will be
sustained upon examination by the appropriate taxing authorities before any part of the benefit can be recorded in the financial statements. FIN 48 also provides guidance on de-recognition, classification, accounting in interim periods and
disclosure requirements for tax contingencies. In addition, we have applied the standards in FASB Staff Position No. FIN 48-1, Definition of Settlement in FASB Interpretation No. 48 (FSP FIN 48-1) as part of our initial
adoption of FIN 48. FSP FIN 48-1 is an amendment to FIN 48. It clarifies how an enterprise should determine whether a tax position is effectively settled for the purpose of recognizing previously unrecognized tax benefits.

As a result of the adoption of FIN 48, we reduced the liability for net unrecognized tax benefits by $0.6 million and accounted for this as a
cumulative-effect adjustment recorded as an increase to the December 1, 2007 balance of retained earnings. The total amount of gross unrecognized tax benefit as of the date of adoption was $33.8 million, of which $11.5 million would affect the
effective tax rate if realized. We historically classified unrecognized tax benefits in current income taxes payable. In implementing FIN 48, we have reclassified $6.8 million from current income taxes payable to long-term income tax liabilities. We
have also grossed-up our long-term income tax liabilities by $5.4 million with a corresponding increase to our deferred tax assets.



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TIBCO SOFTWARE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)



A reconciliation of the unrecognized tax benefits for the fiscal year ended November 30, 2008 is
as follows:



|                                                                      |  |   |        |  
|--------------------------------------------------------------------- |  | - | ------ | -
|Gross unrecognized tax benefits balance as of December 1, 2007        |  | $ | 33,788 |  
|Increases for tax positions of current fiscal year                    |  |   | 1,598  |  
|Increases for tax positions of prior fiscal years                     |  |   | 2,144  |  
|Decreases for tax positions of prior fiscal years                     |  |   | (1,897 | )
|Lapse of statutes of limitation                                       |  |   | (200   | )
|                                                                      |  |   |        |  
|Total gross unrecognized tax benefits balance as of November 30, 2008 |  |   | 35,433 |  
|Interest and penalties                                                |  |   | 1,162  |  
|                                                                      |  |   |        |  
|Balance as of November 30, 2008                                       |  | $ | 36,595 |  
|                                                                      |  |   |        |  

During fiscal year 2008, the amount of gross unrecognized tax benefits was increased by
approximately $1.6 million. The total amount of gross unrecognized tax benefits was $35.4 million as of November 30, 2008, of which $13.4 million would affect the effective tax rate if realized. We do not expect any significant changes to the
amount of unrecognized tax benefit within the next 12 months.

Upon adoption of FIN 48, we have elected to include interest expense and
penalties accrued on unrecognized tax benefits as a component of our income tax expense. This is consistent with our policy prior to the adoption of FIN 48. As of December 1, 2007 and November 30, 2008, we had accrued interest and
penalties related to uncertain tax positions of $1.0 million and $1.2 million, respectively.

We are subject to routine corporate income
tax audits in the United States and foreign jurisdictions. The statute of limitations for our fiscal years 1997 through 2007 remains open for U.S. purposes. Most foreign jurisdictions have statute of limitations that range from three to six years.

18.    Net Income Per Share

Basic net income per share is computed by dividing the net income available to common stockholders for the period by the weighted average number of shares of common stock outstanding during the period less shares of
common stock subject to repurchase and nonvested stock awards. Diluted net income per share is computed by dividing the net income for the period by the weighted average number of shares of common stock and potential shares of common stock
outstanding during the period if their effect is dilutive. Certain potential dilutive securities were not included in computing net income per share because their effect was anti-dilutive.

We use the treasury stock method to calculate the weighted-average shares used in the diluted earnings per share in accordance with SFAS No. 128,
Earnings Per Share. Under the treasury stock method, the assumed proceeds calculation includes: (a) the actual proceeds to-be-received from the employee upon exercise, (b) the average unrecognized compensation cost during the period
and (c) any tax benefits that will be credited upon exercise to additional paid in capital. We determine whether our windfall pool of available excess tax benefits is sufficient to absorb the shortfall. Currently, we have determined that we
have sufficient windfall pool available.



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TIBCO SOFTWARE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)



The following table sets forth the computation of basic and diluted net income per share for the
periods indicated (in thousands, except per share data):



|                                                                                     |  |                         |         |      |   |         |  |   |        
|------------------------------------------------------------------------------------ |  | ----------------------- | ------- | ---- | - | ------- |  | - | -------
|                                                                                     |  | Year Ended November 30,
|                                                                                     |  | 2008                    |         | 2007 |   | 2006   
|Net income                                                                           |  | $                       | 52,411  |      | $ | 51,888  |  | $ | 72,864 
|                                                                                     |  |                         |         |      |   |         |  |   |        
|Weighted-average shares of common stock used to compute basic net income per share   |  |                         | 180,525 |      |   | 198,885 |  |   | 209,538
|Effect of dilutive common stock equivalents:                                         |  |                         |         |      |   |         |  |   |        
|Stock options to purchase common stock                                               |  |                         | 2,905   |      |   | 6,114   |  |   | 8,472  
|Restricted common stock awards                                                       |  |                         | 312     |      |   | 317     |  |   | 65     
|                                                                                     |  |                         |         |      |   |         |  |   |        
|Weighted-average shares of common stock used to compute diluted net income per share |  |                         | 183,742 |      |   | 205,316 |  |   | 218,075
|                                                                                     |  |                         |         |      |   |         |  |   |        
|Basic net income per share                                                           |  | $                       | 0.29    |      | $ | 0.26    |  | $ | 0.35   
|                                                                                     |  |                         |         |      |   |         |  |   |        
|Diluted net income per share                                                         |  | $                       | 0.29    |      | $ | 0.25    |  | $ | 0.33   
|                                                                                     |  |                         |         |      |   |         |  |   |        

The following potential weighted-average common stock equivalents are not included in the diluted
net income per share calculation above, because their effect was anti-dilutive for the periods indicated (in thousands):



|                                             |  |                         |  |        |  |       
|-------------------------------------------- |  | ----------------------- |  | ------ |  | ------
|                                             |  | Year Ended November 30,
|                                             |  | 2008                    |  | 2007   |  | 2006  
|Stock options to purchase common stock       |  | 24,725                  |  | 16,124 |  | 19,798
|Restricted common stock awards               |  | 1,267                   |  | 109    |  | 1     
|                                             |  |                         |  |        |  |       
|Total anti-dilutive common stock equivalents |  | 25,992                  |  | 16,233 |  | 19,799
|                                             |  |                         |  |        |  |       

19.    Related Party Transactions

Bernard J. Bourigeaud, a former member of our Board of Directors, served until December 2007 as Chairman of the Management Board and CEO of Atos Origin, a
leading international IT services provider and one of our customers in fiscal year 2007. Total revenue received from Atos Origin for products and services delivered in the fiscal year ended November 30, 2007, was $1.0 million. We believe that
the products and services provided to Atos Origin were on terms that were determined at arms length, and such terms were similar to terms offered to other customers.

20.    Employee 401(k) Plan

Our employee savings and retirement plan is
qualified under Section 401 of the United State Internal Revenue Code of 1986, as amended. Employees may elect to reduce their current compensation by up to the statutory prescribed annual limit and have the amount of such reduction contributed
to the 401(k) Plan. We provide 100% match to employee contributions up to 4% of an employees base pay and an additional 25% on employee contributions of the next 2% of base pay. Our matching contributions to the 401(k) Plan totaled $5.2
million, $4.8 million and $4.3 million in fiscal years 2008, 2007 and 2006, respectively.



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TIBCO SOFTWARE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)



21.    Segment Information

We operate our business in one operating segment: the development and marketing of a suite of infrastructure software. Our chief operating decision maker
is our Chief Executive Officer, who reviews financial information presented on a consolidated basis for purposes of making operating decisions and assessing financial performance.

Our revenue by geographic region, based on the location at which each sale originated, is summarized as follows (in thousands):



|               |  |                         |         |      |   |         |  |   |        
|-------------- |  | ----------------------- | ------- | ---- | - | ------- |  | - | -------
|               |  | Year Ended November 30,
|               |  | 2008                    |         | 2007 |   | 2006   
|Americas:      |  |                         |         |      |   |         |  |   |        
|United States  |  | $                       | 301,969 |      | $ | 267,415 |  | $ | 254,948
|Other Americas |  |                         | 18,660  |      |   | 10,963  |  |   | 8,986  
|               |  |                         |         |      |   |         |  |   |        
|Total Americas |  |                         | 320,629 |      |   | 278,378 |  |   | 263,934
|               |  |                         |         |      |   |         |  |   |        
|EMEA:          |  |                         |         |      |   |         |  |   |        
|United Kingdom |  |                         | 74,230  |      |   | 81,084  |  |   | 71,500 
|Other EMEA     |  |                         | 185,960 |      |   | 152,375 |  |   | 120,865
|               |  |                         |         |      |   |         |  |   |        
|Total EMEA     |  |                         | 260,190 |      |   | 233,459 |  |   | 192,365
|               |  |                         |         |      |   |         |  |   |        
|APJ            |  |                         | 63,652  |      |   | 65,549  |  |   | 60,980 
|               |  |                         |         |      |   |         |  |   |        
|               |  | $                       | 644,471 |      | $ | 577,386 |  | $ | 517,279
|               |  |                         |         |      |   |         |  |   |        

Our property and equipment by major country are summarized as follows (in thousands):



|                             |  |              |         |      |   |        
|---------------------------- |  | ------------ | ------- | ---- | - | -------
|                             |  | November 30,
|                             |  | 2008         |         | 2007
|Property and equipment, net: |  |              |         |      |   |        
|United States                |  | $            | 97,576  |      | $ | 102,044
|United Kingdom               |  |              | 2,240   |      |   | 3,435  
|Other                        |  |              | 3,715   |      |   | 5,911  
|                             |  |              |         |      |   |        
|                             |  | $            | 103,531 |      | $ | 111,390
|                             |  |              |         |      |   |        



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##### Table of Contents

TIBCO SOFTWARE INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)



22.    Selected Quarterly Financial Information (Unaudited)

(in thousands, except per share data)



|                                               |  |                    |         |                |   |         |             |  |                  |         |  |   |        
|---------------------------------------------- |  | ------------------ | ------- | -------------- | - | ------- | ----------- |  | ---------------- | ------- |  | - | -------
|                                               |  | Three Months Ended
|                                               |  | November 30,2008   |         | August 31,2008 |   |         | May 31,2008 |  | February 28,2008
|Total revenue                                  |  | $                  | 185,524 |                | $ | 162,337 |             |  | $                | 150,032 |  | $ | 146,578
|Gross profit                                   |  |                    | 141,524 |                |   | 117,061 |             |  |                  | 104,460 |  |   | 103,528
|Total operating expenses                       |  |                    | 100,819 |                |   | 101,803 |             |  |                  | 100,436 |  |   | 97,780 
|Income from operations                         |  |                    | 40,705  |                |   | 15,258  |             |  |                  | 4,024   |  |   | 5,748  
|Provision for income taxes                     |  |                    | 8,923   |                |   | 4,917   |             |  |                  | 1,641   |  |   | 2,833  
|Net income                                     |  |                    | 32,291  |                |   | 11,113  |             |  |                  | 3,493   |  |   | 5,514  
|Net income per share:                          |  |                    |         |                |   |         |             |  |                  |         |  |   |        
|Basic                                          |  | $                  | 0.18    |                | $ | 0.06    |             |  | $                | 0.02    |  | $ | 0.03   
|Diluted                                        |  | $                  | 0.18    |                | $ | 0.06    |             |  | $                | 0.02    |  | $ | 0.03   
|Shares used in computing net income per share: |  |                    |         |                |   |         |             |  |                  |         |  |   |        
|Basic                                          |  |                    | 174,612 |                |   | 179,094 |             |  |                  | 182,078 |  |   | 186,315
|Diluted                                        |  |                    | 175,758 |                |   | 183,154 |             |  |                  | 185,990 |  |   | 190,064
|                                               | 
|                                               |  | Three Months Ended
|                                               |  | November 30,2007   |         | August 31,2007 |   |         | May 31,2007 |  | February 28,2007
|Total revenue                                  |  | $                  | 186,101 |                | $ | 135,114 |             |  | $                | 130,517 |  | $ | 125,654
|Gross profit                                   |  |                    | 139,988 |                |   | 93,711  |             |  |                  | 94,031  |  |   | 90,755 
|Restructuring adjustment                       |  |                    |        |                |   | (1,095  | )           |  |                  |        |  |   |       
|Acquired in-process research and development   |  |                    |        |                |   | 1,600   |             |  |                  |        |  |   |       
|Total operating expenses                       |  |                    | 102,502 |                |   | 90,825  |             |  |                  | 83,015  |  |   | 79,186 
|Income from operations                         |  |                    | 37,486  |                |   | 2,886   |             |  |                  | 11,016  |  |   | 11,569 
|Provision for income taxes                     |  |                    | 12,186  |                |   | 731     |             |  |                  | 6,561   |  |   | 5,923  
|Net income                                     |  |                    | 27,645  |                |   | 4,634   |             |  |                  | 9,218   |  |   | 10,391 
|Net income per share:                          |  |                    |         |                |   |         |             |  |                  |         |  |   |        
|Basic                                          |  | $                  | 0.15    |                | $ | 0.02    |             |  | $                | 0.05    |  | $ | 0.05   
|Diluted                                        |  | $                  | 0.14    |                | $ | 0.02    |             |  | $                | 0.04    |  | $ | 0.05   
|Shares used in computing net income per share: |  |                    |         |                |   |         |             |  |                  |         |  |   |        
|Basic                                          |  |                    | 188,748 |                |   | 193,817 |             |  |                  | 204,575 |  |   | 208,398
|Diluted                                        |  |                    | 192,940 |                |   | 200,128 |             |  |                  | 211,885 |  |   | 216,306

Our operating results reflect seasonal trends experienced by us and many software companies and
are subject to fluctuations due to other factors. Our business, financial condition and results of operations may be affected by such factors in the future. Therefore, we believe that period-to-period comparisons of our consolidated financial
results should not be relied upon as an indication of future performance.



F-45



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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934,
the registrant has duly caused this Annual Report on Form 10-K to be signed on its behalf by the undersigned, thereunto duly authorized, on this 27thday of January 2009.



TIBCO Software Inc.By:

/s/ SYDNEY L. CAREYSydney L. CareyExecutive Vice President, Chief Financial Officer




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POWER OF ATTORNEY

KNOW ALL THESE, PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Vivek Y. Ranadivé and Sydney L. Carey, and each of them, his attorneys-in-fact, each with full
power of substitution, for him in any and all capacities, to sign any and all amendments to this Annual Report on Form 10-K, and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange
Commission, hereby ratifying and confirming all that each said attorneys-in-fact or his substitute or substitutes, may do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this Annual Report on Form 10-K has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates
indicated.



|                                        |  |                                                                                                                  |  |                 
|--------------------------------------- |  | ---------------------------------------------------------------------------------------------------------------- |  | ----------------
|Signature                               |  | Title                                                                                                            |  | Date            
|                                        |  |                                                                                                                 
|/s/ VIVEK Y. RANADIVÉ Vivek Y. Ranadivé |  | Chairman and Chief Executive Officer (Principal Executive Officer)                                               |  | January 27, 2009
|                                        |  |                                                                                                                 
|/s/ SYDNEY L. CAREY Sydney L. Carey     |  | Executive Vice President, Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) |  | January 27, 2009
|                                        |  |                                                                                                                 
|/s/ ERIC DUNN Eric Dunn                 |  | Director                                                                                                         |  | January 27, 2009
|                                        |  |                                                                                                                 
|/s/ NAREN GUPTA Naren Gupta             |  | Director                                                                                                         |  | January 27, 2009
|                                        |  |                                                                                                                 
|/s/ PETER JOB Peter Job                 |  | Director                                                                                                         |  | January 27, 2009
|                                        |  |                                                                                                                 
|/s/ PHILIP K. WOOD Phillip K. Wood      |  | Director                                                                                                         |  | January 27, 2009



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EXHIBIT INDEX



|            |  |                                                                                                                                                                                                                                                                                    
|----------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |  | Exhibits                                                                                                                                                                                                                                                                           
|3.1(1)      |  | Amended and Restated Certificate of Incorporation of Registrant.                                                                                                                                                                                                                   
|3.2(2)      |  | Bylaws of Registrant, as amended and restated.                                                                                                                                                                                                                                     
|3.3(15)     |  | Certificate of Designation of Rights, Preferences and Privileges of Series A Participating Preferred Stock of the Registrant.                                                                                                                                                      
|4.1(15)     |  | Preferred Stock Rights Agreement, dated as of February 14, 2004 between the Registrant and EquiServe Trust Company, N.A., including the Certificate of Designation, the Form of Rights Certificate
and the Summary of Rights attached thereto as Exhibits A, B and C, respectively.
|10.1(3)     |  | Form of Registrants Indemnification Agreement.                                                                                                                                                                                                                                    
|10.2(4)#    |  | 1996 Stock Option Plan, as amended and restated.                                                                                                                                                                                                                                   
|10.3(3)#    |  | Form of Stock Option Agreement pursuant to the 1996 Stock Option Plan.                                                                                                                                                                                                             
|10.4#       |  | Form of Restricted Stock Agreement pursuant to the 1996 Stock Option Plan.                                                                                                                                                                                                         
|10.5(3)#    |  | Form of Restricted Stock Unit Agreement pursuant to the 1996 Stock Option Plan.                                                                                                                                                                                                    
|10.6(5)#    |  | 1998 Director Option Plan, as amended and restated.                                                                                                                                                                                                                                
|10.7#       |  | Form of Director Option Agreement pursuant to the 1998 Director Option Plan.                                                                                                                                                                                                       
|10.8(6)#    |  | 2008 Equity Incentive Plan.                                                                                                                                                                                                                                                        
|10.9(7)#    |  | Form of Stock Option Agreement pursuant to the 2008 Equity Incentive Plan.                                                                                                                                                                                                         
|10.10(7)#   |  | Form of Restricted Stock Agreement pursuant to the 2008 Equity Incentive Plan.                                                                                                                                                                                                     
|10.11#      |  | Form of Restricted Stock Unit Agreement pursuant to the 2008 Equity Incentive Plan.                                                                                                                                                                                                
|10.12(6)#   |  | 2008 Employee Stock Purchase Plan.                                                                                                                                                                                                                                                 
|10.13(8)#   |  | Extensibility, Inc. 2000 Stock Plan.                                                                                                                                                                                                                                               
|10.14(9)#   |  | Talarian Corporation 2000 Equity Incentive Plan.                                                                                                                                                                                                                                   
|10.15(9)#   |  | Talarian Corporation 1998 Equity Incentive Plan.                                                                                                                                                                                                                                   
|10.16(9)#   |  | White Barn, Inc. Stock Option Plan.                                                                                                                                                                                                                                                
|10.17(9)#   |  | White Barn, Inc. 2000 Equity Incentive Plan.                                                                                                                                                                                                                                       
|10.18(10)#  |  | Insightful Corporation Amended and Restated 2001 Stock Option and Incentive Plan.                                                                                                                                                                                                  
|10.19#      |  | Form of Restricted Stock Agreement pursuant to the Insightful Corporation Amended and Restated 2001 Stock Option and Incentive Plan.                                                                                                                                               
|10.20#      |  | Form of Restricted Stock Unit Agreement pursuant to the Insightful Corporation Amended and Restated 2001 Stock Option and Incentive Plan.                                                                                                                                          
|10.21#      |  | Change in Control and Severance Plan.                                                                                                                                                                                                                                              
|10.22(11)#  |  | Summary of Fiscal Year 2008 TIBCO Executive Incentive Compensation Plan.                                                                                                                                                                                                           
|10.23#      |  | Amended and Restated Employment Agreement, dated as of September 26, 2008, by and between Vivek Ranadivé and Registrant.                                                                                                                                                           
|10.24(12)   |  | Lease Agreement dated January 21, 2000 between Spieker Properties, L.P. and the Registrant.                                                                                                                                                                                        
|10.25(13)   |  | Agreement to Lease and Sell Assets, dated as of June 2, 2003, by and between the Board of Trustees of the Leland Stanford Junior University and 3301 Hillview Holdings, Inc.                                                                                                       
|10.26(13)   |  | Ground Lease, dated as of June 25, 2003, by and between the Board of Trustees of the Leland Stanford Junior University and 3301 Hillview Holdings, Inc.                                                                                                                            
|10.27(13)   |  | Promissory Note issued on June 25, 2003 to SunAmerica Life Insurance Company by 3301 Hillview Holdings, Inc.                                                                                                                                                                       
|10.28(14)   |  | First Amendment, dated May 31, 2007, to Promissory Note issued on June 25, 2003 to SunAmerica Life Insurance Company by 3301 Hillview Holdings, Inc.                                                                                                                               
|21          |  | List of subsidiaries.                                                                                                                                                                                                                                                              
|23          |  | Consent of PricewaterhouseCoopers LLP, Independent Registered Public Accounting Firm.                                                                                                                                                                                              
|24          |  | Power of Attorney (included on signature page).                                                                                                                                                                                                                                    
|31.1        |  | Certification by Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended.                                                                                                                                                  
|31.2        |  | Certification by Chief Financial Officer Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended.                                                                                                                                                              
|32.1        |  | Certification by Chief Executive Officer pursuant to 18 USC § 1350.                                                                                                                                                                                                                
|32.2        |  | Certification by Chief Financial Officer pursuant to 18 USC § 1350.                                                                                                                                                                                                                



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|(1) | Incorporated by reference to an exhibit filed with the Registrants Registration Statement on Form 8-A, filed with the SEC on February 23, 2004.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Incorporated by reference to an exhibit filed with the Registrants Current Report on Form 8-K, filed with the SEC on June 18, 2008.
|--- | ------------------------------------------------------------------------------------------------------------------------------------

|(3) | Incorporated by reference to an exhibit filed with the Registrants Annual Report on Form 10-K, filed with the SEC on January 25, 2008.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------

|(4) | Incorporated by reference to an exhibit filed with the Registrants Annual Report on Form 10-K, filed with the SEC on February 9, 2007.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------

|(5) | Incorporated by reference to an exhibit filed with the Registrants Quarterly Report on Form 10-Q, filed with the SEC on April 14, 2006.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------

|(6) | Incorporated by reference to exhibits filed with the Registrants Registration Statement on Form S-8 (File No. 333-152245), filed with the SEC on July 10, 2008.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------

|(7) | Incorporated by reference to an exhibit filed with the Registrants Quarterly Report on Form 10-Q, filed with the SEC on July 10, 2008.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------

|(8) | Incorporated by reference to an exhibit filed with the Registrants Registration Statement on Form S-8 (File No. 333-48260), filed with the SEC on October 19, 2000.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(9) | Incorporated by reference to exhibits filed with the Registrants Registration Statement on Form S-8 (File No. 333-88730), filed with the SEC on May 21, 2002.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------

|(10) | Incorporated by reference to an exhibit filed with the Registrants Registration Statement on Form S-8 (File No. 333-153333), filed with the SEC on September 5, 2008.
|---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(11) | Incorporated by reference to an exhibit filed with the Registrants Current Report on Form 8-K, filed with the SEC on May 9, 2008.
|---- | ----------------------------------------------------------------------------------------------------------------------------------

|(12) | Incorporated by reference to an exhibit filed with the Registrants Quarterly Report on Form 10-Q, filed with the SEC on April 17, 2000.
|---- | ----------------------------------------------------------------------------------------------------------------------------------------

|(13) | Incorporated by reference to exhibits filed with the Registrants Annual Report on Form 10-K, filed with the SEC on January 20, 2004.
|---- | -------------------------------------------------------------------------------------------------------------------------------------

|(14) | Incorporated by reference to exhibits filed with the Registrants Quarterly Report on Form 10-Q, filed with the SEC on July 13, 2007.
|---- | -------------------------------------------------------------------------------------------------------------------------------------

|(15) | Incorporated by reference to an exhibit filed with the Registrants Registration Statement on Form 8-A, filed with the SEC on February 23, 2004.
|---- | ------------------------------------------------------------------------------------------------------------------------------------------------

|# | Indicates management contract or compensatory plan or arrangement.
|- | ------------------------------------------------------------------