##### Table of Contents









UNITED STATES SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549





Form 10-K


|  |  |                                                                                             
|- |  | --------------------------------------------------------------------------------------------
|þ |  | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934    
| 
|  |  | For the fiscal year ended December 31, 2004                                                 
|  |  | or                                                                                          
| 
|o |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934

Commission File Number 0-25871





Informatica Corporation


(Exact name of registrant as specified in its charter)


|                                                                   |  |                                         
|------------------------------------------------------------------ |  | ----------------------------------------
|Delaware                                                           |  | 77-0333710                              
|(State or other jurisdiction of
    incorporation or organization) |  | (I.R.S. Employer
    Identification No.)
|                                                                  
|100 Cardinal Way
    Redwood City, California                      |  | 94063                                   
|(Address of principal executive offices)                           |  | (Zip Code)                              

(650) 385-5000


(Registrants Telephone Number, Including Area Code)


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


None


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


Common Stock, par value $0.001 per share


Preferred Share Purchase Rights, par value $0.001 per
share





þ o


þ


þ o






DOCUMENTS INCORPORATED BY REFERENCE












---










INFORMATICA CORPORATION


ANNUAL REPORT ON FORM 10-K


Year Ended December 31, 2004


|              |  |                                                                                                                      |    |      |    | 
|------------- |  | -------------------------------------------------------------------------------------------------------------------- | -- | ---- | -- | 
|              |  |                                                                                                                      |    | Page |   
|              |  |                                                                                                                      |    |      |   
|PART I       
|Item 1.       |  | Business                                                                                                             |    |      | 2  | 
|Item 2.       |  | Properties                                                                                                           |    |      | 9  | 
|Item 3.       |  | Legal Proceedings                                                                                                    |    |      | 10 | 
|Item 4.       |  | Submission of Matters to a Vote of Security
    Holders                                                              |    |      | 11 | 
|              |  | Executive Officers of the Registrant                                                                                 |    |      | 11 | 
|PART II      
|Item 5.       |  | Market for Registrants Common Equity,
    Related Stockholder Matters and Issuer Purchases of Equity
    Securities |    |      | 12 | 
|Item 6.       |  | Selected Consolidated Financial Data                                                                                 |    |      | 13 | 
|Item 7.       |  | Managements Discussion and Analysis
    of Financial Condition and Results of Operations                            |    |      | 14 | 
|              |  | Risk Factors                                                                                                         |    |      | 31 | 
|Item 7A.      |  | Quantitative and Qualitative Disclosures
    About Market Risk                                                       |    |      | 42 | 
|Item 8.       |  | Financial Statements and Supplementary
    Data                                                                      |    |      | 43 | 
|              |  | Report of Management on Internal Control over Financial
    Reporting                                                |    |      | 45 | 
|              |  | Report of Independent Registered Public Accounting Firm on
    Internal Control over Financial Reporting             |    |      | 46 | 
|              |  | Report of Independent Registered Public Accounting Firm                                                              |    |      | 47 | 
|Item 9.       |  | Changes in and Disagreements with
    Accountants on Accounting and Financial Disclosure                             |    |      | 80 | 
|Item 9A.      |  | Controls and Procedures                                                                                              |    |      | 80 | 
|Item 9B.      |  | Other Information                                                                                                    |    |      | 81 | 
|PART III     
|Item 10.      |  | Directors and Executive Officers of the
    Registrant                                                               |    |      | 81 | 
|Item 11.      |  | Executive Compensation                                                                                               |    |      | 81 | 
|Item 12.      |  | Security Ownership of Certain Beneficial
    Owners and Management                                                   |    |      | 81 | 
|Item 13.      |  | Certain Relationships and Related
    Transactions                                                                   |    |      | 81 | 
|Item 14.      |  | Principal Accountant Fees and Services                                                                               |    |      | 81 | 
|PART IV      
|Item 15.      |  | Exhibits, Financial Statement Schedules                                                                              |    |      | 82 | 
|SIGNATURES    |  |                                                                                                                      | 84 |     
|EXHIBIT 10.28
|EXHIBIT 10.29
|EXHIBIT 10.30
|EXHIBIT 21.1 
|EXHIBIT 23.2 
|EXHIBIT 31.1 
|EXHIBIT 31.2 
|EXHIBIT 32.1 



1



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##### Table of Contents



PART I







|        |         
|------- | --------
|Item 1. | Business

Overview












Risk
Factors  We have a limited operating history and a
history of losses, which makes it difficult to evaluate our
operations, products and prospects for the future.




2



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www.informatica.com




Our Products












3



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|                          |  |  |                                                                                                                                                                        |  |                                                                                                                                                                           
|------------------------- |  |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Product                   |  |  | Description                                                                                                                                                            |  | Benefit                                                                                                                                                                   
|                          |  |  |                                                                                                                                                                        |  |                                                                                                                                                                           
|                          |  |  |                                                                                                                                                                        |  |                                                                                                                                                                           
|Informatica PowerCenter   |  |  | PowerCenter is a leading enterprise data integration product for
    accessing, integrating and delivering data to systems, people or
    processes.                   |  | PowerCenter provides companies a single environment delivering
    cost-effective and broad support for all data integration
    initiatives.                             
|                          |  | 
|                          |  |  |                                                                                                                                                                        |  |                                                                                                                                                                           
|                          |  |  |                                                                                                                                                                        |  |                                                                                                                                                                           
|Informatica PowerExchange |  |  | PowerExchange is scalable, non-invasive software for access to
    changed or bulk data  in real time or batch
    mode  from complex, legacy and mainframe systems. |  | PowerExchange helps companies cost- effectively and efficiently
    access the vast amounts of enterprise data on mainframes for
    mission-critical business processing.
|                          |  | 
|                          |  |  |                                                                                                                                                                        |  |                                                                                                                                                                           
|                          |  |  |                                                                                                                                                                        |  |                                                                                                                                                                           
|Informatica SuperGlue     |  |  | SuperGlue is software that provides the ability to catalog, view
    and analyze metadata assets.                                                                      |  | SuperGlue helps companies manage the impact of changes and audit
    the accuracy of data in their data integration initiatives.                                          
|                          |  | 
|                          |  |  |                                                                                                                                                                        |  |                                                                                                                                                                           
|                          |  |  |                                                                                                                                                                        |  |                                                                                                                                                                           
|Informatica PowerAnalyzer |  |  | PowerAnalyzer is software designed to improve the performance
    and efficiency of data integration and data delivery processes
    through reporting capabilities.   |  | PowerAnalyzer helps companies facilitate the development and
    management of data integration and data delivery initiatives to
    expedite the time to value.          
|                          |  |  |                                                                                                                                                                        |  |                                                                                                                                                                           



Services






4



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Our Strategic Partners




Our Customers




|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |  |                                                                                                                                                                                                                                                                                                                                    |  |                                                                                                                                                                                                                                                                                                                                                        
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |  |                                                                                                                                                                                                                                                                                                                                    |  | Manufacturing/                                                                                                                                                                                                                                                                                                                                         
|Financial Services                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |  | Insurance                                                                                                                                                                                                                                                                                                                          |  | HighTech                                                                                                                                                                                                                                                                                                                                               
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |  |                                                                                                                                                                                                                                                                                                                                    |  |                                                                                                                                                                                                                                                                                                                                                        
|Abbey National
    ABN AMRO
    American Express
    Bank Of America
    Barclays
    Canadian Imperial Bank of   Commerce
    Cendant
    Charles Schwab
    Credit Suisse First Boston
    Deutsche Bank
    Goldman Sachs
    JP Morgan
    Manulife Financial
    Mass Mutual Life Insurance
    Merrill Lynch
    Mitsubishi Tokyo Financial Group
    Morgan Stanley
    Northwestern Mutual Financial   Network
    Prudential Financial
    Royal Bank of Scotland
    Thomson Corporation
    UBS
    Washington Mutual |  | Aegon
    Anthem
    AXA
    Blue Cross/Blue Shield
    California Medi-CAL
    Canada Life
    Guardian Life Insurance  Company of America
    Hartford Financial Services
    ING
    MetLife
    Nationwide Mutual  Insurance Company
    State Farm Mutual Automobile  Insurance Company
    Thrivent Financial  for Lutherans |  | Agilent Technologies
    Avnet
    Boeing
    Brocade Communications Systems
    Cisco Systems
    ConAgra Foods
    DaimlerChrysler
    General Electric
    Hewlett-Packard
    Intuit
    Lockheed Martin
    Motorola
    R.R. Donnelley & Sons
    Philips
    Siemens
    Solectron
    STERIS Corporation
    Toyota
    Verisign
    Volkswagen

5



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|                                                                                                                                                                               |  |                                                                                                                                                    |  |                                                                                           
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | -------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------------------------------------------------------------------
|                                                                                                                                                                               |  | Pharmaceuticals/                                                                                                                                   |  | Retail/Consumer                                                                           
|Communications                                                                                                                                                                 |  | Chemicals                                                                                                                                          |  | Packaged Goods                                                                            
|                                                                                                                                                                               |  |                                                                                                                                                    |  |                                                                                           
|Alltel
    AT&T
    Bell South
    Cingular Wireless
    Deutsche Telekom
    Lucent Technologies
    MCI
    SBC Communications
    Vodafone Group
    Verizon Communications |  | Abbott Laboratories
    Amgen
    AstraZeneca
    Bristol-Meyers Squibb
    Eli Lilly
    GlaxoSmithKline
    Merck & Company
    Pfizer
    Roche |  | Best Buy
    CVS
    Deutsche Woolworth
    Gus
    HE Butt Grocery
    Nestlé
    Staples

|                                                                                                                                                                                                        |  |                                                                                                                                                                                                                                                                                        |  |                                                                                                                                                                                                                                                       
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Utilities/Energy                                                                                                                                                                                        |  | Government                                                                                                                                                                                                                                                                             |  | Other                                                                                                                                                                                                                                                 
|                                                                                                                                                                                                        |  |                                                                                                                                                                                                                                                                                        |  |                                                                                                                                                                                                                                                       
|American Electric Power
    BP
    Enron
    Electricite de France
    Florida Power & Light
    Pacific Gas & Electric
    Public Service Enterprise Group
    Waste Management
    Williams Companies |  | Deutsche Post
    Federal Bureau of Investigation
    Government of Israel
    Internal Revenue Service
    La Poste
    National Institute of Health
    US Department of Homeland  Security
    US Customs Service
    US Postal Service
    US Army
    US National Security Agency |  | Carlson Holdings
    Cerner Corp.
    Dun & Bradstreet
    Federal Express
    First Data
    Gtech Holdings
    KPMG
    Marriot International
    PricewaterhouseCoopers
    Tribune Company
    University of California
    University of Illinois

Our Market Strategy


Expand from Data Warehousing to Broad Enterprise Data
Integration.


Evolve Departmental Projects to Enterprise Standardization
via Integration Competency Centers (ICCs).


Focus on Horizontal Data Integration Solutions: Migration and
Consolidation.


6



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Launch Vertical Solutions: Financial Services.


Leverage Significant Installed Customer Base and Community of
Developers.


Increase Strong Base of Strategic Partners.


Research and Development








Sales, Marketing and Distribution






7



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Intellectual Property and Other Proprietary Rights






Future Revenues (New Orders, Backlog and Deferred Revenue)




8



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Competition








| |   |                                                                                                                                                 
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------
| |  | product capabilities including openness, standards compliance,
    performance, scalability, ease of use and reliability;                       
|
| |  | low total cost of ownership encompassing performance,
    reusability, pricing, productivity gains and lower maintenance
    and training costs;
|
| |  | time to market;                                                                                                                                 
|
| |  | services and support;                                                                                                                           
|
| |  | relationships with strategic partners that can help market and
    sell our products; and                                                       
|
| |  | proven success and experience.                                                                                                                  

 If we do not compete
effectively with companies selling data integration and business
intelligence products, our revenues may not grow and could
decline


Employees









|        |           
|------- | ----------
|Item 2. | Properties





9



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|        |                  
|------- | -----------------
|Item 3. | Legal Proceedings









10



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|        |                                                    
|------- | ---------------------------------------------------
|Item 4. | Submission of Matters to a Vote of Security Holders



Executive Officers of the Registrant




|                |  |     |    |  |             |                                                                
|--------------- |  | --- | -- |  | ----------- | ---------------------------------------------------------------
|Name            |  | Age |    |  | Position(s)
|                |  |     |    |  |            
|Sohaib Abbasi   |  |     | 48 |  |             | Chief Executive Officer, President and Director                
|Earl E. Fry     |  |     | 46 |  |             | Chief Financial Officer, Executive Vice President and Secretary
|Paul J. Hoffman |  |     | 54 |  |             | Executive Vice President, Worldwide Sales                      
|Girish Pancha   |  |     | 40 |  |             | Executive Vice President of Products                           
|John Entenmann  |  |     | 42 |  |             | Executive Vice President, Corporate Strategy and Marketing     



Mr. Abbasi


Mr. Fry


11



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Mr. Hoffman


Mr. Pancha


Mr. Entenmann


PART II







| |         |                                                                                                                     
| | ------- | --------------------------------------------------------------------------------------------------------------------
| | Item 5. | Market for Registrants Common Equity, Related
    Stockholder Matters and Issuer Purchases of Equity
    Securities

Market Information




|               |  |      |       |  |      |   |      |      |  |   |       |  |  |   |      | 
|-------------- |  | ---- | ----- |  | ---- | - | ---- | ---- |  | - | ----- |  |  | - | ---- | 
|               |  | 2004 |       |  | 2003 |  
|               |  |      |       |  |      |  
|               |  | High |       |  | Low  |   |      | High |  |   | Low   | 
|               |  |      |       |  |      |   |      |      |  |   |       | 
|First Quarter  |  | $    | 12.58 |  |      | $ | 8.20 |      |  | $ | 8.00  |  |  | $ | 5.76 | 
|Second Quarter |  | $    | 10.20 |  |      | $ | 6.64 |      |  | $ | 8.00  |  |  | $ | 6.23 | 
|Third Quarter  |  | $    | 7.65  |  |      | $ | 5.36 |      |  | $ | 9.43  |  |  | $ | 6.54 | 
|Fourth Quarter |  | $    | 8.67  |  |      | $ | 5.82 |      |  | $ | 12.22 |  |  | $ | 7.44 | 

Holders of Common Stock




Dividends




Recent Sales of Unregistered Securities




12



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Issuer Purchases of Equity Securities









|        |                                     
|------- | ------------------------------------
|Item 6. | Selected Consolidated Financial Data

|                                            |                   |                                                                   |                          |   |          |         |  |      |         |         |      |   |         |         |  |   |         |         |  |   |         |         | 
|------------------------------------------- | ----------------- | ----------------------------------------------------------------- | ------------------------ | - | -------- | ------- |  | ---- | ------- | ------- | ---- | - | ------- | ------- |  | - | ------- | ------- |  | - | ------- | ------- | 
|                                            |                   | Year Ended December 31,                                           |                         
|                                            |                   |                                                                   |                         
|                                            |                   | 2004                                                              |                          |   | 2003     |         |  | 2002 |         |         | 2001 |   |         | 2000    | 
|                                            |                   |                                                                   |                          |   |          |         |  |      |         |         |      |   |         |         | 
|                                            |                   | (In thousands, except per share data)                             |                         
|Consolidated Statements of Operations Data: |                   |                                                                   |                          |   |          |         |  |      |         |         |      |   |         |         |  |   |         |         |  |  
|                                            | Revenues:         |                                                                   |                          |   |          |         |  |      |         |         |      |   |         |         |  |   |         |         |  |   |        
|                                            |                   | License                                                           |                          | $ | 97,941   |         |  | $    | 94,590  |         |      | $ | 99,943  |         |  | $ | 119,937 |         |  | $ | 101,649 |        
|                                            |                   | Service                                                           |                          |   | 121,740  |         |  |      | 110,943 |         |      |   | 95,498  |         |  |   | 80,208  |         |  |   | 54,953  |        
|                                            |                   |                                                                   |                          |   |          |         |  |      |         |         |      |   |         |         | 
|                                            |                   |                                                                   | Total revenues           |   |          | 219,681 |  |      |         | 205,533 |      |   |         | 195,441 |  |   |         | 200,145 |  |   |         | 156,602 | 
|                                            | Cost of revenues: |                                                                   |                          |   |          |         |  |      |         |         |      |   |         |         |  |   |         |         |  |   |        
|                                            |                   | License                                                           |                          |   | 3,778    |         |  |      | 3,139   |         |      |   | 6,185   |         |  |   | 4,500   |         |  |   | 2,034   |        
|                                            |                   | Service(1)                                                        |                          |   | 40,346   |         |  |      | 38,856  |         |      |   | 39,250  |         |  |   | 42,559  |         |  |   | 31,056  |        
|                                            |                   | Amortization of acquired technology                               |                          |   | 2,322    |         |  |      | 1,031   |         |      |   | 1,040   |         |  |   | 1,040   |         |  |   | 589     |        
|                                            |                   |                                                                   |                          |   |          |         |  |      |         |         |      |   |         |         | 
|                                            |                   |                                                                   | Total cost of revenues   |   |          | 46,446  |  |      |         | 43,026  |      |   |         | 46,475  |  |   |         | 48,099  |  |   |         | 33,679  | 
|                                            |                   |                                                                   |                          |   |          |         |  |      |         |         |      |   |         |         | 
|                                            |                   | Gross Profit                                                      |                          |   | 173,235  |         |  |      | 162,507 |         |      |   | 148,966 |         |  |   | 152,046 |         |  |   | 122,923 |        
|Operating expenses:                         |                   |                                                                   |                          |   |          |         |  |      |         |         |      |   |         |         |  |   |         |         |  |  
|                                            |                   | Research and development(1)                                       |                          |   | 51,322   |         |  |      | 47,730  |         |      |   | 45,836  |         |  |   | 46,714  |         |  |   | 27,274  |        
|                                            |                   | Sales and marketing(1)                                            |                          |   | 94,900   |         |  |      | 86,810  |         |      |   | 86,770  |         |  |   | 99,898  |         |  |   | 75,697  |        
|                                            |                   | General and administrative(1)                                     |                          |   | 20,755   |         |  |      | 20,921  |         |      |   | 20,286  |         |  |   | 19,638  |         |  |   | 11,749  |        
|                                            |                   | Amortization of goodwill and other intangible assets              |                          |   | 197      |         |  |      | 147     |         |      |   | 100     |         |  |   | 26,336  |         |  |   | 13,574  |        
|                                            |                   | Purchased in-process research and development                     |                          |   |         |         |  |      | 4,524   |         |      |   |        |         |  |   |        |         |  |   | 8,648   |        
|                                            |                   | Restructuring charges                                             |                          |   | 112,636  |         |  |      |        |         |      |   | 17,030  |         |  |   | 12,096  |         |  |   |        |        
|                                            |                   |                                                                   |                          |   |          |         |  |      |         |         |      |   |         |         | 
|                                            |                   |                                                                   | Total operating expenses |   |          | 279,810 |  |      |         | 160,132 |      |   |         | 170,022 |  |   |         | 204,682 |  |   |         | 136,942 | 
|                                            |                   |                                                                   |                          |   |          |         |  |      |         |         |      |   |         |         | 
|                                            |                   | Income (loss) from operations                                     |                          |   | (106,575 | )       |  |      | 2,375   |         |      |   | (21,056 | )       |  |   | (52,636 | )       |  |   | (14,019 | )      
|                                            |                   | Interest income and other, net                                    |                          |   | 3,445    |         |  |      | 7,103   |         |      |   | 6,420   |         |  |   | 8,971   |         |  |   | 4,306   |        
|                                            |                   | Interest expense                                                  |                          |   | (54      | )       |  |      | (44     | )       |      |   | (57     | )       |  |   | (11     | )       |  |   | (458    | )      
|                                            |                   |                                                                   |                          |   |          |         |  |      |         |         |      |   |         |         | 
|                                            |                   | Income (loss) before income taxes                                 |                          |   | (103,184 | )       |  |      | 9,434   |         |      |   | (14,693 | )       |  |   | (43,676 | )       |  |   | (10,171 | )      
|                                            |                   | Income tax provision                                              |                          |   | 1,220    |         |  |      | 2,124   |         |      |   | 921     |         |  |   | 1,304   |         |  |   | 3,345   |        
|                                            |                   |                                                                   |                          |   |          |         |  |      |         |         |      |   |         |         | 
|                                            |                   | Net income (loss)                                                 |                          | $ | (104,404 | )       |  | $    | 7,310   |         |      | $ | (15,614 | )       |  | $ | (44,980 | )       |  | $ | (13,516 | )      
|                                            |                   |                                                                   |                          |   |          |         |  |      |         |         |      |   |         |         | 
|                                            |                   | Basic and diluted net income (loss) per share                     |                          | $ | (1.22    | )       |  | $    | 0.09    |         |      | $ | (0.20   | )       |  | $ | (0.58   | )       |  | $ | (0.19   | )      
|                                            |                   |                                                                   |                          |   |          |         |  |      |         |         |      |   |         |         | 
|                                            |                   | Shares used in calculation of basic net income (loss) per share   |                          |   | 85,812   |         |  |      | 82,049  |         |      |   | 79,753  |         |  |   | 77,599  |         |  |   | 69,758  |        
|                                            |                   |                                                                   |                          |   |          |         |  |      |         |         |      |   |         |         | 
|                                            |                   | Shares used in calculation of diluted net income (loss) per share |                          |   | 85,812   |         |  |      | 85,200  |         |      |   | 79,753  |         |  |   | 77,599  |         |  |   | 69,758  |        
|                                            |                   |                                                                   |                          |   |          |         |  |      |         |         |      |   |         |         | 

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|                                    |                                             |                |   |         |      |  |   |         |  |  |      |         |  |      |   |         |  |  |   |         | 
|----------------------------------- | ------------------------------------------- | -------------- | - | ------- | ---- |  | - | ------- |  |  | ---- | ------- |  | ---- | - | ------- |  |  | - | ------- | 
|                                    |                                             | December 31,   |  
|                                    |                                             |                |  
|                                    |                                             | 2004           |   |         | 2003 |  |   | 2002    |  |  | 2001 |         |  | 2000 |  
|                                    |                                             |                |   |         |      |  |   |         |  |  |      |         |  |      |  
|                                    |                                             | (In thousands) |  
|Consolidated Balance Sheet Data(1): |                                             |                |   |         |      |  |   |         |  |  |      |         |  |      |   |         |  |  |   |        
|                                    | Cash and cash equivalents                   |                | $ | 88,941  |      |  | $ | 82,903  |  |  | $    | 105,590 |  |      | $ | 119,664 |  |  | $ | 217,713 | 
|                                    | Restricted cash                             |                |   | 12,166  |      |  |   | 12,166  |  |  |      | 12,166  |  |      |   | 12,166  |  |  |   | 20,282  | 
|                                    | Investments                                 |                |   | 152,160 |      |  |   | 140,890 |  |  |      | 130,285 |  |      |   | 89,555  |  |  |   |        | 
|                                    | Working capital                             |                |   | 166,861 |      |  |   | 161,015 |  |  |      | 176,640 |  |      |   | 168,112 |  |  |   | 190,179 | 
|                                    | Total assets                                |                |   | 409,768 |      |  |   | 402,808 |  |  |      | 365,194 |  |      |   | 342,903 |  |  |   | 350,983 | 
|                                    | Long-term obligations, less current portion |                |   |        |      |  |   |        |  |  |      |        |  |      |   |        |  |  |   |        | 
|                                    | Total stockholders equity                  |                |   | 195,722 |      |  |   | 289,599 |  |  |      | 252,403 |  |      |   | 260,408 |  |  |   | 290,497 | 








|    |                                                                                                                                                                                                                                                                                                               
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Amortization of stock-based compensation has been reclassified
    for periods prior to December 31, 2004 to cost of service
    revenues, research and development, sales and marketing, and
    general and administrative expenses. See Note 1 of notes to
    consolidated financial statements in Item 8.






|        |                                                                                          
|------- | -----------------------------------------------------------------------------------------
|Item 7. | Managements Discussion and Analysis of Financial
    Condition and Results of Operations





Overview




14



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Critical Accounting Policies








| |                    
| | -------------------
| | Revenue Recognition



Software Revenue
Recognition, Modification of SOP 97-2, Software
Revenue Recognition, With Respect to Certain Transactions.


15



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16



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| |                                                  
| | -------------------------------------------------
| | Allowance for Sales Returns and Doubtful Accounts







| |                       
| | ----------------------
| | Impairment of Goodwill



17



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| |                      
| | ---------------------
| | Restructuring Charges









| |               
| | --------------
| | Deferred Taxes



18



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Years Ended December 31, 2004, 2003 and 2002




|                                                              |                                   |                                               |                          |     |      |     |    |      |    |     |    |     |    |     | 
|------------------------------------------------------------- | --------------------------------- | --------------------------------------------- | ------------------------ | --- | ---- | --- | -- | ---- | -- | --- | -- | --- | -- | --- | 
|                                                              |                                   | Year Ended                                    |                         
|                                                              |                                   | December 31,                                  |                         
|                                                              |                                   |                                               |                         
|                                                              |                                   | 2004                                          |                          |     | 2003 |     |    | 2002 |   
|                                                              |                                   |                                               |                          |     |      |     |    |      |   
|Consolidated Statements of Operations Data:                   |                                   |                                               |                          |     |      |     |    |      |    |     |    |    
|                                                              | Revenues:                         |                                               |                          |     |      |     |    |      |    |     |    |     |   
|                                                              |                                   | License                                       |                          |     | 45   | %   |    |      | 46 | %   |    |     | 51 | %  
|                                                              |                                   | Service                                       |                          |     | 55   |     |    |      | 54 |     |    |     | 49 |    
|                                                              |                                   |                                               |                          |     |      |     |    |      |   
|                                                              |                                   |                                               | Total revenues           |     |      | 100 |    |      |    | 100 |    |     |    | 100 | 
|                                                              | Cost of revenues:                 |                                               |                          |     |      |     |    |      |    |     |    |     |   
|                                                              |                                   | License                                       |                          |     | 2    |     |    |      | 2  |     |    |     | 3  |    
|                                                              |                                   | Service(1)                                    |                          |     | 18   |     |    |      | 19 |     |    |     | 20 |    
|                                                              |                                   | Amortization of acquired technology           |                          |     | 1    |     |    |      |   |     |    |     | 1  |    
|                                                              |                                   |                                               |                          |     |      |     |    |      |   
|                                                              |                                   |                                               | Total cost of revenues   |     |      | 21  |    |      |    | 21  |    |     |    | 24  | 
|                                                              |                                   |                                               |                          |     |      |     |    |      |   
|                                                              | Gross profit                      |                                               |                          | 79  |      |     |    | 79   |    |     |    | 76  |   
|                                                              | Operating expenses:               |                                               |                          |     |      |     |    |      |    |     |    |     |   
|                                                              |                                   | Research and development(1)                   |                          |     | 23   |     |    |      | 23 |     |    |     | 23 |    
|                                                              |                                   | Sales and marketing(1)                        |                          |     | 43   |     |    |      | 42 |     |    |     | 45 |    
|                                                              |                                   | General and administrative(1)                 |                          |     | 10   |     |    |      | 10 |     |    |     | 10 |    
|                                                              |                                   | Purchased in-process research and development |                          |     |     |     |    |      | 2  |     |    |     |   |    
|                                                              |                                   | Restructuring charges                         |                          |     | 52   |     |    |      |   |     |    |     | 9  |    
|                                                              |                                   |                                               |                          |     |      |     |    |      |   
|                                                              |                                   |                                               | Total operating expenses |     |      | 128 |    |      |    | 77  |    |     |    | 87  | 
|                                                              |                                   |                                               |                          |     |      |     |    |      |   
|                                                              | Income (loss) from operations     |                                               |                          | (49 | )    |     |    | 2    |    |     |    | (11 | ) 
|                                                              | Interest income and other, net    |                                               |                          | 2   |      |     |    | 3    |    |     |    | 3   |   
|                                                              |                                   |                                               |                          |     |      |     |    |      |   
|                                                              | Income (loss) before income taxes |                                               |                          | (47 | )    |     |    | 5    |    |     |    | (8  | ) 
|                                                              | Income tax provision              |                                               |                          | 1   |      |     |    | 1    |    |     |    |    |   
|                                                              |                                   |                                               |                          |     |      |     |    |      |   
|                                                              | Net income (loss)                 |                                               |                          | (48 | )%   |     |    | 4    | %  |     |    | (8  | )%
|                                                              |                                   |                                               |                          |     |      |     |    |      |   
|Cost of license revenues, as a percentage of license revenues |                                   |                                               | 4                        | %   |      |     | 3  | %    |    |     | 6  | %  
|Cost of service revenues, as a percentage of service revenues |                                   |                                               | 33                       | %   |      |     | 35 | %    |    |     | 41 | %  






|    |                                                                                                                                                                                                                                                                                                                  
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Amortization of stock-based compensation has been reclassified
    for the two years ended December 31, 2003 to cost of
    service revenues, research and development, sales and marketing,
    and general and administrative expenses. See Note 1 of
    notes to consolidated financial statements in Item 8.

Revenues




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|                 |                   |                                            |                |  |       |       |      |      |       |       |      |  |      |       | 
|---------------- | ----------------- | ------------------------------------------ | -------------- |  | ----- | ----- | ---- | ---- | ----- | ----- | ---- |  | ---- | ----- | 
|                 |                   | Year Ended December 31,                    |               
|                 |                   |                                            |               
|                 |                   | 2004                                       |                |  | 2003  |       |      | 2002 |      
|                 |                   |                                            |                |  |       |       |      |      |      
|                 |                   | (In millions)                              |               
|License revenues |                   | $                                          | 97.9           |  |       | $     | 94.6 |      |       | $     | 99.9 | 
|                 | Service revenues: |                                            |                |  |       |       |      |      |       |       |      |  |     
|                 |                   | Maintenance revenues                       |                |  | 87.5  |       |      |      | 75.7  |       |      |  | 53.9 |      
|                 |                   | Consulting and education services revenues |                |  | 34.3  |       |      |      | 35.2  |       |      |  | 41.6 |      
|                 |                   |                                            |                |  |       |       |      |      |      
|                 |                   | Total service revenues                     |                |  | 121.8 |       |      |      | 110.9 |       |      |  | 95.5 |      
|                 |                   |                                            |                |  |       |       |      |      |      
|                 |                   |                                            | Total revenues |  | $     | 219.7 |      |      | $     | 205.5 |      |  | $    | 195.4 | 
|                 |                   |                                            |                |  |       |       |      |      |      



| |                 
| | ----------------
| | License Revenues





| |                  
| | -----------------
| | Services Revenues



| |                     
| | --------------------
| | Maintenance Revenues





| |                                           
| | ------------------------------------------
| | Consulting and Education Services Revenues





| |                       
| | ----------------------
| | International Revenues



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| |                               
| | ------------------------------
| | Key Factors Affecting Revenues





| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | We typically experience a seasonal decrease in revenues in the
    first quarter of the year.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|
| |  | We experienced greater than usual sales force turnover during
    the first quarter of 2004, which we believe negatively impacted
    our ability to generate license revenues in the first three
    quarters of 2004. We experienced reduced sales force turnover
    during the remainder of 2004 and we continued to add new sales
    personnel throughout the year. Because we typically experience
    lower productivity from newly hired sales personnel for a period
    of six to 12 months, our ability to generate license
    revenues in the first quarter of 2005 may be adversely affected.
    See Risk Factors  An increase in turnover
    rates of our sales force personnel may negatively impact our
    ability to generate license revenues.                                                                                                                                                                    
|
| |  | The recent general economic uncertainty caused customer
    purchases to be reduced in amount, deferred or cancelled, and
    therefore reduced the overall license pipeline conversion rates
    in much of 2003 and 2004. Any interruption or delay in the
    current gradual recovery in the infrastructure software industry
    could cause a reduction in the rate of conversion of the sales
    pipeline into license revenue for the first quarter of 2005 and
    beyond. See Risk Factors  If we are unable
    to accurately forecast revenues, we may fail to meet stock
    analysts and investors expectations of our quarterly
    operating results, which could cause our stock price to
    decline and Risk Factors  We have
    experienced reduced sales pipeline and pipeline conversion rates
    in the past, which has adversely affected the growth of our
    company and the price of our common stock.
|
| |  | In July 2003, we ceased direct sales of our analytic application
    suites and data warehouse modules, which remain available to our
    indirect channel partners to sell. We will not receive any
    future revenue from the distribution of our analytic application
    suites and data warehouse modules from our independent channel
    partners. However, we may further use or sell elements of this
    technology in the future, which may generate revenues. For
    example, in December 2003, we licensed elements of this software
    technology to one of our strategic partners.                                                                                                                                                                                                                                                                                                                                        
|
| |  | On February 22, 2005, we announced the release of
    PowerCenter Advanced Edition. This edition of PowerCenter
    includes two previously at-cost options, team-based development
    and server grid, as well as two previously separate products,
    PowerAnalyzer and SuperGlue. We also announced on this date that
    we are removing these two options and these two separate
    products from our price list. PowerCenter Advanced Edition is
    priced higher than the standard edition of PowerCenter but less
    than the aggregate price of all components previously sold
    separately. Because this edition of PowerCenter and its pricing
    are new, we cannot predict its impact on PowerCenter and overall
    revenues.                                                                                                                                                                                         
|
| |  | License revenue for 2004 did not include the full amount related
    to two large software license agreements signed in Europe in the
    third quarter of 2004. We deferred the license revenues related
    to these software license agreements in September 2004 due to
    extended warranties that contain provisions for additional
    unspecified deliverables and began amortizing the deferred
    revenues balances to license revenues in September 2004 for a
    two to five-year period. While historically we have infrequently
    entered into software license agreements that require ratable
    recognition of license revenue, we may enter into software
    license agreements like these in the future.                                                                                                                                                                                                          

Risk


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Factors  We have experienced and could continue to
experience fluctuations in our quarterly operating results,
especially the amount of license revenue we recognize each
quarter, and such fluctuations have caused and could continue to
cause our stock price to decline.


Risk
Factors  We have experienced and could continue to
experience fluctuations in our quarterly operating results,
especially the amount of license revenue we recognize each
quarter, and such fluctuations have caused and could continue to
cause our stock price to decline.


Cost of Revenues




| |                         
| | ------------------------
| | Cost of License Revenues





| |                         
| | ------------------------
| | Cost of Service Revenues





| |                                    
| | -----------------------------------
| | Amortization of Acquired Technology



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Operating Expenses




| |                         
| | ------------------------
| | Research and Development





| |                    
| | -------------------
| | Sales and Marketing





| |                           
| | --------------------------
| | General and Administrative





| |                                         
| | ----------------------------------------
| | Amortization of Stock-Based Compensation



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|                           |                                |                        |       |       |      |   |     |      |  |   |     |     | 
|-------------------------- | ------------------------------ | ---------------------- | ----- | ----- | ---- | - | --- | ---- |  | - | --- | --- | 
|                           |                                | Year Ended December 31 |      
|                           |                                |                        |      
|                           |                                | 2004                   |       |       | 2003 |   |     | 2002 | 
|                           |                                |                        |       |       |      |   |     |      | 
|                           |                                | (In thousands)         |      
|Cost of service revenues   |                                | $                      | 48    |       |      | $ | 12  |      |  | $ | 4   |    
|Research and development   |                                |                        | 2,216 |       |      |   | 468 |      |  |   | 333 |    
|Sales and marketing        |                                |                        | 1,172 |       |      |   | 252 |      |  |   | 62  |    
|General and administrative |                                |                        | (78   | )     |      |   | 208 |      |  |   | 12  |    
|                           |                                |                        |       |       |      |   |     |      | 
|                           | Total stock-based compensation |                        | $     | 3,358 |      |   | $   | 940  |  |   | $   | 411 | 
|                           |                                |                        |       |       |      |   |     |      | 







| |                                              
| | ---------------------------------------------
| | Purchased In-Process Research and Development





| |                      
| | ---------------------
| | Restructuring Charges



| |                        
| | -----------------------
| | 2004 Restructuring Plan





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| |                        
| | -----------------------
| | 2001 Restructuring Plan













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Interest Income, Interest Expense and Other Income (Expense),
Net




Income Tax Provision




Recent Accounting Pronouncements


The
Meaning of Other-Than-Temporary Impairment and Its Application
to Certain Investments.


Share-Based
Payment, Accounting for Stock-Based
Compensation Accounting for Stock Issued to
Employees Statement of Cash Flows. requires




| |   |                                                                                                                                                                                                         
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | A modified prospective method in which compensation
    cost is recognized beginning with the effective date (a) based
    on the requirements of SFAS 123(R) for all share-based
    payments granted

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| |   |                                                                                                                                                                                                                                                                                                                                                                    
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   | after the effective date and (b) based on the requirements of
    SFAS 123(R) for all awards granted to employees prior to
    the effective date of SFAS 123(R) that remain unvested on
    the effective date.                                                                                                                                                   
|
| |  | A prospective method which includes the requirements
    of the modified prospective method described above, but also
    permits entities to restate based on the amounts previously
    recognized under SFAS 123(R) for purposes of pro forma
    disclosures either (a) all prior periods presented or (b) prior
    interim periods of the year of adoption.





Accounting and
Disclosure Guidance for the Foreign Earnings Repatriation
Provisions within the American Jobs Creation Act of 2004


Exchanges of Nonmonetary Assets, an
amendment of APB Opinion No. 29, Accounting for Nonmonetary
Transactions. SFAS 153 eliminates the exception from
fair value measurement for nonmonetary exchanges of similar
productive assets in paragraph 21 (b) of APB Opinion
No. 29, Accounting for Nonmonetary
Transactions,


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Liquidity and Capital Resources




Operating activities:


Investing activities:


Financing activities:




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| |                                             
| | --------------------------------------------
| | Contractual Obligations and Operating Leases



Contractual
Obligations


|                             |                                 |                       |         |          |      |   |          |        |   |          |        |        |   |            |        |        |   |   |        |        | 
|---------------------------- | ------------------------------- | --------------------- | ------- | -------- | ---- | - | -------- | ------ | - | -------- | ------ | ------ | - | ---------- | ------ | ------ | - | - | ------ | ------ | 
|                             |                                 | Payment Due by Period |        
|                             |                                 |                       |        
|                             |                                 |                       |         | 2006 and |      |   | 2008 and |        |   | 2010 and |       
|                             |                                 | Total                 |         |          | 2005 |   |          | 2007   |   |          | 2009   |        |   | Thereafter |       
|                             |                                 |                       |         |          |      |   |          |        |   |          |        |        |   |            |       
|                             |                                 | (In thousands)        |        
|Operating lease obligations: |                                 |                       |         |          |      |   |          |        |   |          |        |        |   |            |        |        |   |   |        |       
|                             | Operating lease payments        |                       | $       | 156,955  |      |   | $        | 20,640 |   |          | $      | 40,912 |   |            | $      | 34,008 |   |   | $      | 61,395 | 
|                             | Sublease income                 |                       |         | (10,307  | )    |   |          | (2,108 | ) |          |        | (4,941 | ) |            |        | (3,258 | ) |   |        |       | 
|                             |                                 |                       |         |          |      |   |          |        |   |          |        |        |   |            |       
|                             | Net operating lease obligations |                       |         | 146,648  |      |   |          | 18,532 |   |          |        | 35,971 |   |            |        | 30,750 |   |   |        | 61,395 | 
|                            
|Other obligations(1)         |                                 |                       | 200     |          |      |   | 200      |        |   |          |       |        |   |            |       |        |   |   |       |       
|                             |                                 |                       |         |          |      |   |          |        |   |          |        |        |   |            |       
|Total                        |                                 | $                     | 146,848 |          |      | $ | 18,732   |        |   | $        | 35,971 |        |   | $          | 30,750 |        |   | $ | 61,395 |       
|                             |                                 |                       |         |          |      |   |          |        |   |          |        |        |   |            |       






|    |                                                                                                                                                                      
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Other purchase obligations and commitments include minimum
    royalty payments under license agreements and do not include
    purchase obligations discussed below.







| |                 
| | ----------------
| | Operating Leases





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| |                   
| | ------------------
| | Other Uses of Cash











| |                               
| | ------------------------------
| | Off-Balance Sheet Arrangements



30



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RISK FACTORS






| |                                                                                                                                                                                                                                                                                    
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | We have experienced and could continue to experience
    fluctuations in our quarterly operating results, especially the
    amount of license revenue we recognize each quarter, and such
    fluctuations have caused and could continue to cause our stock
    price to decline.











| |                                                                                                                                                                                                               
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | If we are unable to accurately forecast revenues, we may
    fail to meet stock analysts and investors expectations of
    our quarterly operating results, which could cause our stock
    price to decline.



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| |                                                                                                                                                                                         
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | We have experienced reduced sales pipeline and pipeline
    conversion rates in the past, which have adversely affected the
    growth of our company and the price of our common stock.





| |                                                                                                                                                                                                                                                                                                                                                                                
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | While we believe we currently have adequate internal
    control over financial reporting, we are required to assess our
    internal control over financial reporting on an annual basis and
    any future adverse results from such assessment could result in
    a loss of investor confidence in our financial reports and have
    an adverse effect on our stock price.











| |                                                                                                                                      
| | -------------------------------------------------------------------------------------------------------------------------------------
| | An increase in the turnover rate of our sales force
    personnel may negatively impact our ability to generate license
    revenues.



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| |                                                                                                                                                                       
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The loss of our key personnel or the inability to attract
    and retain additional personnel could adversely affect our
    ability to grow our company successfully.









| |                                                                                                                                        
| | ---------------------------------------------------------------------------------------------------------------------------------------
| | If we do not compete effectively with companies selling
    data integration products, our revenues may not grow and could
    decline.





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| |                                                                                                                                                                                                                                                                                                          
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | We may not successfully integrate Strivas
    technology, employees or business operations with our own. As a
    result, we may not achieve the anticipated benefits of our
    acquisition, which could adversely affect our operating results
    and cause the price of our common stock to decline.





| |   |                                                                                                                                                     
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------
| |  | the failure to capture the value of the business we acquired,
    including the loss of any key personnel, customers and business
    relationships;
|
| |  | an inability to generate revenue from the combined products that
    offsets the associated acquisition and maintenance costs;                      
|
| |  | the assumption of any contracts or agreements from Striva that
    contain terms or conditions that are unfavorable to us;                          
|
| |  | the loss of key personnel due to the relocation of Strivas
    European headquarters; and                                                          
|
| |  | unsettled legal or tax liabilities incurred by Striva prior to
    the acquisition.                                                                 





| |                                                                                                                                                                                                                                                                                    
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | We rely on our relationships with our strategic partners.
    If we do not maintain and strengthen these relationships, our
    ability to generate revenue and control expenses could be
    adversely affected, which could cause a decline in the price of
    our common stock.







34



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| |                                                                                                                                                                                                                    
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | If the current improvement in the U.S. economy does
    not result in increased sales of our products and services, our
    operating results would be harmed, and the price of our common
    stock could decline.







| |                                                                                                                                                                                                                                                                    
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | As a result of our products lengthy sales cycles,
    our expected revenues are susceptible to fluctuations, which
    could cause us to fail to meet stock analysts and
    investors expectations, resulting in a decline in the
    price of our common stock.





| |   |                                                                                                                                                                                                                                      
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | our customers budgetary constraints and internal
    acceptance review procedures;                                                                                                                                                  
|
| |  | the timing of our customers budget cycles;                                                                                                                                                                                          
|
| |  | the seasonality of technology purchases, which historically has
    resulted in stronger sales of our products in the fourth quarter
    of the year, especially when compared to lighter sales in the
    first quarter of the year;
|
| |  | our customers concerns about the introduction of our
    products or new products from our competitors; or                                                                                                                          
|
| |  | potential downturns in general economic or political conditions
    that could occur during the sales cycle.                                                                                                                         



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| |                                                                                                                                                                                                                                   
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | If the market in which we sell our products and services
    does not grow as we anticipate, we may not be able to increase
    our revenues at an acceptable rate of growth, and the price of
    our common stock could decline.





| |   |                                                                             
| | - | ----------------------------------------------------------------------------
| |  | not fully value the benefits of using our products;                         
|
| |  | not achieve favorable results using our products;                           
|
| |  | experience technical difficulties in implementing our
    products; or      
|
| |  | use alternative methods to solve the problems addressed by our
    products.





| |                                                                                                                                                                     
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | We rely on the sale of a limited number of products, and
    if these products do not achieve broad market acceptance, our
    revenues would be adversely affected.





| |                                                                                                                                                       
| | ------------------------------------------------------------------------------------------------------------------------------------------------------
| | We may not be able to successfully manage the growth of
    our business if we are unable to improve our internal systems,
    processes and controls.



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| |                                                                                                                                                                                                                                                       
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The price of our common stock fluctuates as a result of
    factors other than our operating results, such as the actions of
    our competitors and securities analysts, as well as developments
    in our industry and changes in accounting rules.





| |   |                                                                                 
| | - | --------------------------------------------------------------------------------
| |  | the announcement of new products or product enhancements by our
    competitors;
|
| |  | quarterly variations in our competitors results of
    operations;             
|
| |  | changes in earnings estimates and recommendations by securities
    analysts;   
|
| |  | developments in our industry; and                                               
|
| |  | changes in accounting rules.                                                    





| |                                                                                                                                                                                                                                         
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The price of our common stock may fluctuate when we
    account for employee stock option and employee stock purchase
    plans using the fair value method, which could significantly
    reduce our net income and earnings per share.

Share-Based Payment,




| |                                                                                                                                                                                                                                                                                                                                                       
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | If our products are unable to interoperate with hardware
    and software technologies that are developed and maintained by
    third parties that are not within our control, our ability to
    develop and sell our products to our customers could be
    adversely affected which would result in harm to our business
    and operating results.



37



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| |                                                                                                                                                                                                                                                                                     
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | We rely on a number of different distribution channels to
    sell and market our products. Any conflicts that we may
    experience within these various distribution channels could
    result in confusion for our customers and a decrease in revenue
    and operating margins.





| |                                                                                                                     
| | --------------------------------------------------------------------------------------------------------------------
| | Any significant defect in our products could cause us to
    lose revenue and expose us to product liability claims.







| |                                                                                                                                                                                                                        
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | If we are unable to successfully respond to technological
    advances and evolving industry standards, we could experience a
    reduction in our future product sales, which would cause our
    revenues to decline.





| |                                                                                                                                                                                      
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | We recognize revenue from specific customers at the time
    we receive payment for our products, and if these customers do
    not make timely payment, our revenues could decrease.



38



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| |                                                                                                                                                                   
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | We have a limited operating history and a cumulative net
    loss, which makes it difficult to evaluate our operations,
    products and prospects for the future.





| |                                                                                                                                                                                               
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Our international operations expose us to greater
    intellectual property, collections, exchange rate fluctuations,
    regulatory and other risks, which could limit our future
    growth.











| |   |                                                                                                                                                                                                                                                                                               
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | greater difficulty in protecting our ownership rights to
    intellectual property developed in foreign countries, which may
    have laws that materially differ from those in the United States;                                                                                            
|
| |  | communication delays between our main development center in
    Redwood Shores, California and our development centers in India,
    the Netherlands and the United Kingdom as a result of time zone
    differences, which may delay the development, testing or release
    of new products;
|
| |  | greater difficulty in relocating existing trained development
    personnel and recruiting local experienced personnel, and the
    costs and expenses associated with such activities; and                                                                                                   
|
| |  | increased expenses incurred in establishing and maintaining
    office space and equipment for the development centers.                                                                                                                                                                       





| |   |                                                                                                    
| | - | ---------------------------------------------------------------------------------------------------
| |  | greater risk of uncollectible accounts and longer collection
    cycles;                           
|
| |  | greater risk of unexpected changes in regulatory practices,
    tariffs, and tax laws and treaties;

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| |   |                                                                                                                                                                                                                                                                                                                                                                                                             
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | greater risk of a failure of our for foreign employees to comply
    with both U.S. and foreign laws, including antitrust
    regulations, the Foreign Corrupt Practices Act, and unfair trade
    regulations;                                                                                                                                                                                             
|
| |  | business practices with European and other foreign governments
    and entities may differ from those in North America and may
    require us to include terms in our software license agreements,
    such as extended warranty terms, that will require us to defer
    license revenue and recognize it ratably over the warranty term
    or other performance obligation included within the agreement;
|
| |  | potential conflicts with our established distributors in
    countries in which we elect to establish a direct sales presence;                                                                                                                                                                                                                                                                              
|
| |  | our limited experience in establishing a sales and marketing
    presence in Asia, especially China and Korea;                                                                                                                                                                                                                                                                                              
|
| |  | fluctuations in exchange rates between the U.S. dollar and
    foreign currencies in markets where we do business because we do
    not engage in any hedging activities; and                                                                                                                                                                                                                               
|
| |  | general economic and political conditions in these foreign
    markets.                                                                                                                                                                                                                                                                                                                                     





| |                                                                                                                                                                                                 
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | If we are not able to adequately protect our proprietary
    rights, third parties could develop and market products that are
    equivalent to our own, which would harm our sales
    efforts.









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| |                                                                                                                                           
| | ------------------------------------------------------------------------------------------------------------------------------------------
| | We may face intellectual property infringement claims that
    could be costly to defend and result in our loss of significant
    rights.





| |   |                                                                                                                                                   
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------
| |  | we may be forced to enter into royalty or licensing agreements,
    which may not be available on terms favorable to us, or at all;               
|
| |  | we may be required to indemnify our customers or obtain
    replacement products or functionality for our customers;                              
|
| |  | we may be forced to significantly increase our development
    efforts and resources to redesign our products as a result of
    these claims; and
|
| |  | we may be forced to discontinue the sale of some or all of our
    products.                                                                      



| |                                                                                                                                                                                   
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | We may engage in future acquisitions or investments that
    could dilute our existing stockholders, or cause us to incur
    contingent liabilities, debt or significant expense.





| |                                                                                                                                                                                                                                                                                                              
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Delaware law, as well as our certificate of incorporation
    and bylaws, contains provisions that could deter potential
    acquisition bids, which may adversely affect the market price of
    our common stock, discourage merger offers and prevent changes
    in our management or Board of Directors.



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| |                                                                                                                                
| | -------------------------------------------------------------------------------------------------------------------------------
| | We may need to raise additional capital in the future,
    which may not be available on reasonable terms to us, if at
    all.





| |                                                                
| | ---------------------------------------------------------------
| | Business interruptions could adversely affect our
    business.








|         |                                                              
|-------- | -------------------------------------------------------------
|Item 7A. | Quantitative and Qualitative Disclosure About Market
    Risk

Interest Rate Risk






Foreign Currency Risk




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|        |                                            
|------- | -------------------------------------------
|Item 8. | Financial Statements and Supplementary Data



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INDEX TO CONSOLIDATED FINANCIAL STATEMENTS


|                                                                                                         |  |      |    | 
|-------------------------------------------------------------------------------------------------------- |  | ---- | -- | 
|                                                                                                         |  | Page |   
|                                                                                                         |  |      |   
|Report of Management on Internal Control Over Financial Reporting                                        |  |      | 45 | 
|Report of Independent Registered Public Accounting Firm on
    Internal Control Over Financial Reporting |  |      | 46 | 
|Report of Independent Registered Public Accounting Firm                                                  |  |      | 47 | 
|Consolidated Balance Sheets                                                                              |  |      | 48 | 
|Consolidated Statements of Operations                                                                    |  |      | 49 | 
|Consolidated Statements of Stockholders Equity                                                          |  |      | 50 | 
|Consolidated Statements of Cash Flows                                                                    |  |      | 51 | 
|Notes to Consolidated Financial Statements                                                               |  |      | 52 | 

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REPORT OF MANAGEMENT ON INTERNAL CONTROL OVER FINANCIAL
REPORTING






| |   |                                                                                                                                                                                                                                                                                                                                                                
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | pertain to the maintenance of records that, in reasonable
    detail, accurately and fairly reflect the transactions and
    dispositions of the assets of the company;                                                                                                                                                                                        
|
| |  | 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
|
| |  | 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.                                                                                                                                       











| |                        
| | -----------------------
| | /s/ SOHAIB ABBASI      
| |                        
| | Sohaib Abbasi          
| | Chief Executive Officer
| | March 7, 2005          
|
| | /s/ EARL. E. FRY       
| |                        
| | Earl. E. Fry           
| | Chief Financial Officer
| | March 7, 2005          

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ON


INTERNAL CONTROL OVER FINANCIAL REPORTING


















| |                      
| | ---------------------
| | /s/ Ernst & Young LLP





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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


The Board of Directors and Stockholders of Informatica
Corporation












| |                      
| | ---------------------
| | /s/ Ernst & Young LLP





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INFORMATICA CORPORATION


CONSOLIDATED BALANCE SHEETS


|                                                    |                                                                                                                                                                                                    |                                            |        |          |         |  |        |         |         | 
|--------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------ | ------ | -------- | ------- |  | ------ | ------- | ------- | 
|                                                    |                                                                                                                                                                                                    | December 31,                               |       
|                                                    |                                                                                                                                                                                                    |                                            |       
|                                                    |                                                                                                                                                                                                    | 2004                                       |        |          | 2003    | 
|                                                    |                                                                                                                                                                                                    |                                            |        |          |         | 
|                                                    |                                                                                                                                                                                                    | (In thousands,                             |       
|                                                    |                                                                                                                                                                                                    | except share data)                         |       
|ASSETS                                             
|Current assets:                                     |                                                                                                                                                                                                    |                                            |        |          |         |  |        |        
|                                                    | Cash and cash equivalents                                                                                                                                                                          |                                            | $      | 88,941   |         |  | $      | 82,903  |        
|                                                    | Short-term investments                                                                                                                                                                             |                                            |        | 152,160  |         |  |        | 140,890 |        
|                                                    | Accounts receivable, net of allowances of $849 and $1,269 in
    2004 and 2003, respectively                                                                                                       |                                            |        | 42,535   |         |  |        | 34,375  |        
|                                                    | Prepaid expenses and other current assets                                                                                                                                                          |                                            |        | 7,837    |         |  |        | 5,124   |        
|                                                    |                                                                                                                                                                                                    |                                            |        |          |         | 
|                                                    |                                                                                                                                                                                                    | Total current assets                       |        |          | 291,473 |  |        |         | 263,292 | 
|Restricted cash                                     |                                                                                                                                                                                                    |                                            | 12,166 |          |         |  | 12,166 |        
|Property and equipment, net                         |                                                                                                                                                                                                    |                                            | 20,063 |          |         |  | 38,734 |        
|Goodwill                                            |                                                                                                                                                                                                    |                                            | 82,245 |          |         |  | 82,186 |        
|Intangible assets, net                              |                                                                                                                                                                                                    |                                            | 2,880  |          |         |  | 5,325  |        
|Other assets                                        |                                                                                                                                                                                                    |                                            | 941    |          |         |  | 1,105  |        
|                                                    |                                                                                                                                                                                                    |                                            |        |          |         | 
|                                                    |                                                                                                                                                                                                    | Total assets                               |        | $        | 409,768 |  |        | $       | 402,808 | 
|                                                    |                                                                                                                                                                                                    |                                            |        |          |         | 
|                                                   
|LIABILITIES AND STOCKHOLDERS EQUITY               
|Current liabilities:                                |                                                                                                                                                                                                    |                                            |        |          |         |  |        |        
|                                                    | Accounts payable                                                                                                                                                                                   |                                            | $      | 7,476    |         |  | $      | 4,458   |        
|                                                    | Accrued liabilities                                                                                                                                                                                |                                            |        | 15,581   |         |  |        | 25,136  |        
|                                                    | Accrued compensation and related expenses                                                                                                                                                          |                                            |        | 15,681   |         |  |        | 14,251  |        
|                                                    | Income taxes payable                                                                                                                                                                               |                                            |        | 3,142    |         |  |        | 1,983   |        
|                                                    | Accrued restructuring charges                                                                                                                                                                      |                                            |        | 20,080   |         |  |        | 4,624   |        
|                                                    | Accrued merger costs                                                                                                                                                                               |                                            |        | 209      |         |  |        | 543     |        
|                                                    | Deferred revenue                                                                                                                                                                                   |                                            |        | 62,443   |         |  |        | 51,282  |        
|                                                    |                                                                                                                                                                                                    |                                            |        |          |         | 
|                                                    |                                                                                                                                                                                                    | Total current liabilities                  |        |          | 124,612 |  |        |         | 102,277 | 
|Accrued restructuring charges, less current portion |                                                                                                                                                                                                    |                                            | 89,171 |          |         |  | 10,543 |        
|Accrued merger costs, less current portion          |                                                                                                                                                                                                    |                                            | 263    |          |         |  | 389    |        
|Commitments and contingencies                       |                                                                                                                                                                                                    |                                            |        |          |         |  |        |        
|Stockholders equity:                               |                                                                                                                                                                                                    |                                            |        |          |         |  |        |        
|                                                    | Preferred stock, $0.001 par value; 2,000,000 shares
    authorized of which 200,000 shares have been designated as
    Series A preferred stock, $0.001 par value, none
    issued and outstanding |                                            |        |         |         |  |        |        |        
|                                                    | Common stock, $0.001 par value; 200,000,000 shares
    authorized; 86,771,442 and 84,628,679 shares issued and
    outstanding at December 31, 2004 and 2003, respectively                         |                                            |        | 390,035  |         |  |        | 382,555 |        
|                                                    | Deferred stock-based compensation                                                                                                                                                                  |                                            |        | (1,000   | )       |  |        | (4,058  | )      
|                                                    | Accumulated deficit                                                                                                                                                                                |                                            |        | (195,088 | )       |  |        | (90,684 | )      
|                                                    | Accumulated other comprehensive income                                                                                                                                                             |                                            |        | 1,775    |         |  |        | 1,786   |        
|                                                    |                                                                                                                                                                                                    |                                            |        |          |         | 
|                                                    |                                                                                                                                                                                                    | Total stockholders equity                 |        |          | 195,722 |  |        |         | 289,599 | 
|                                                    |                                                                                                                                                                                                    |                                            |        |          |         | 
|                                                    |                                                                                                                                                                                                    | Total liabilities and stockholders equity |        | $        | 409,768 |  |        | $       | 402,808 | 
|                                                    |                                                                                                                                                                                                    |                                            |        |          |         | 



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INFORMATICA CORPORATION


CONSOLIDATED STATEMENTS OF OPERATIONS


|                                                                  |                                               |                                       |          |         |         |   |         |         |         |   |         |        |         |  
|----------------------------------------------------------------- | --------------------------------------------- | ------------------------------------- | -------- | ------- | ------- | - | ------- | ------- | ------- | - | ------- | ------ | ------- | -
|                                                                  |                                               | Year Ended December 31,               |         
|                                                                  |                                               |                                       |         
|                                                                  |                                               | 2004                                  |          |         | 2003    |   |         | 2002    |        
|                                                                  |                                               |                                       |          |         |         |   |         |         |        
|                                                                  |                                               | (In thousands, except per share data) |         
|Revenues:                                                         |                                               |                                       |          |         |         |   |         |         |         |   |         |       
|                                                                  | License                                       |                                       | $        | 97,941  |         |   | $       | 94,590  |         |   | $       | 99,943 |        
|                                                                  | Service                                       |                                       |          | 121,740 |         |   |         | 110,943 |         |   |         | 95,498 |        
|                                                                  |                                               |                                       |          |         |         |   |         |         |        
|                                                                  |                                               | Total revenues                        |          |         | 219,681 |   |         |         | 205,533 |   |         |        | 195,441 |  
|Cost of revenues:                                                 |                                               |                                       |          |         |         |   |         |         |         |   |         |       
|                                                                  | License                                       |                                       |          | 3,778   |         |   |         | 3,139   |         |   |         | 6,185  |        
|                                                                  | Service                                       |                                       |          | 40,346  |         |   |         | 38,856  |         |   |         | 39,250 |        
|                                                                  | Amortization of acquired technology           |                                       |          | 2,322   |         |   |         | 1,031   |         |   |         | 1,040  |        
|                                                                  |                                               |                                       |          |         |         |   |         |         |        
|                                                                  |                                               | Total cost of revenues                |          |         | 46,446  |   |         |         | 43,026  |   |         |        | 46,475  |  
|                                                                  |                                               |                                       |          |         |         |   |         |         |        
|Gross profit                                                      |                                               |                                       | 173,235  |         |         |   | 162,507 |         |         |   | 148,966 |       
|Operating expenses:                                               |                                               |                                       |          |         |         |   |         |         |         |   |         |       
|                                                                  | Research and development                      |                                       |          | 51,322  |         |   |         | 47,730  |         |   |         | 45,836 |        
|                                                                  | Sales and marketing                           |                                       |          | 94,900  |         |   |         | 86,810  |         |   |         | 86,770 |        
|                                                                  | General and administrative                    |                                       |          | 20,755  |         |   |         | 20,921  |         |   |         | 20,286 |        
|                                                                  | Amortization of intangible assets             |                                       |          | 197     |         |   |         | 147     |         |   |         | 100    |        
|                                                                  | Purchased in-process research and development |                                       |          |        |         |   |         | 4,524   |         |   |         |       |        
|                                                                  | Restructuring charges                         |                                       |          | 112,636 |         |   |         |        |         |   |         | 17,030 |        
|                                                                  |                                               |                                       |          |         |         |   |         |         |        
|                                                                  |                                               | Total operating expenses              |          |         | 279,810 |   |         |         | 160,132 |   |         |        | 170,022 |  
|                                                                  |                                               |                                       |          |         |         |   |         |         |        
|Income (loss) from operations                                     |                                               |                                       | (106,575 | )       |         |   | 2,375   |         |         |   | (21,056 | )     
|Interest income                                                   |                                               |                                       | 4,499    |         |         |   | 3,851   |         |         |   | 5,100   |       
|Other income (expense), net                                       |                                               |                                       | (1,054   | )       |         |   | 3,252   |         |         |   | 1,320   |       
|Interest expense                                                  |                                               |                                       | (54      | )       |         |   | (44     | )       |         |   | (57     | )     
|                                                                  |                                               |                                       |          |         |         |   |         |         |        
|Income (loss) before income taxes                                 |                                               |                                       | (103,184 | )       |         |   | 9,434   |         |         |   | (14,693 | )     
|Income tax provision                                              |                                               |                                       | 1,220    |         |         |   | 2,124   |         |         |   | 921     |       
|                                                                  |                                               |                                       |          |         |         |   |         |         |        
|Net income (loss)                                                 |                                               | $                                     | (104,404 | )       |         | $ | 7,310   |         |         | $ | (15,614 | )     
|Net income (loss) per share:                                      |                                               |                                       |          |         |         |   |         |         |         |   |         |       
|                                                                  |                                               | Basic and diluted                     |          | $       | (1.22   | ) |         | $       | 0.09    |   |         | $      | (0.20   | )
|                                                                  |                                               |                                       |          |         |         |   |         |         |        
|Shares used in calculation of basic net income (loss) per share   |                                               |                                       | 85,812   |         |         |   | 82,049  |         |         |   | 79,753  |       
|                                                                  |                                               |                                       |          |         |         |   |         |         |        
|Shares used in calculation of diluted net income (loss) per share |                                               |                                       | 85,812   |         |         |   | 85,200  |         |         |   | 79,753  |       
|                                                                  |                                               |                                       |          |         |         |   |         |         |        



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INFORMATICA CORPORATION


CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY


|                                                                                                    |                                         |                                         |            |   |             |   |         |              |   |               |         |   |       |               |          |         |          |   |       |      |      |   |          |         |          |  
|--------------------------------------------------------------------------------------------------- | --------------------------------------- | --------------------------------------- | ---------- | - | ----------- | - | ------- | ------------ | - | ------------- | ------- | - | ----- | ------------- | -------- | ------- | -------- | - | ----- | ---- | ---- | - | -------- | ------- | -------- | -
|                                                                                                    |                                         |                                         |            |   |             |   |         |              |   | Accumulated   |         |   |      
|                                                                                                    |                                         |                                         |            |   |             |   |         | Other        |   |               |        
|                                                                                                    |                                         | Common Stock                            |            |   | Deferred    |   |         |              |   | Comprehensive |         |   | Total |              
|                                                                                                    |                                         |                                         |            |   | Stock-Based |   |         | Accumulated  |   |               | Income  |   |       | Stockholders |         
|                                                                                                    |                                         | Shares                                  |            |   | Amount      |   |         | Compensation |   |               | Deficit |   |       | (Loss)        |          |         | Equity   |  
|                                                                                                    |                                         |                                         |            |   |             |   |         |              |   |               |         |   |       |               |          |         |          |  
|                                                                                                    |                                         | (In thousands, except share data)       |           
|Balances at December 31, 2001                                                                       |                                         |                                         | 78,563,288 |   |             |   | 342,335 |              |   |               | (299    | ) |       |               | (82,380  | )       |          |   | 752   |      |      |   | 260,408  |        
|Components of comprehensive loss:                                                                   |                                         |                                         |            |   |             |   |         |              |   |               |         |   |       |               |          |         |          |   |       |      |      |   |          |        
|                                                                                                    | Net loss                                |                                         |            |  |             |   |         |             |   |               |         |  |       |               |          | (15,614 | )        |   |       |     |      |   |          | (15,614 | )       
|                                                                                                    | Foreign currency translation adjustment |                                         |            |  |             |   |         |             |   |               |         |  |       |               |          |        |          |   |       | 783  |      |   |          | 783     |         
|                                                                                                    | Unrealized gains on investments         |                                         |            |  |             |   |         |             |   |               |         |  |       |               |          |        |          |   |       | 305  |      |   |          | 305     |         
|                                                                                                    |                                         |                                         |            |   |             |   |         |              |   |               |         |   |       |               |          |         |          |  
|Comprehensive loss                                                                                  |                                         |                                         |            |   |             |   |         |              |   |               |         |   |       |               |          |         |          |   |       |      |      |   | (14,526  | )      
|Common stock options exercised                                                                      |                                         |                                         | 1,591,321  |   |             |   | 2,130   |              |   |               |        |   |       |               |         |         |          |   |      |      |      |   | 2,130    |        
|Common stock issued under employee stock purchase plan                                              |                                         |                                         | 947,173    |   |             |   | 5,730   |              |   |               |        |   |       |               |         |         |          |   |      |      |      |   | 5,730    |        
|Compensation expense related to stock options                                                       |                                         |                                         |           |   |             |   | 190     |              |   |               |        |   |       |               |         |         |          |   |      |      |      |   | 190      |        
|Repurchase and retirement of common stock                                                           |                                         |                                         | (352,234   | ) |             |   | (1,750  | )            |   |               |        |   |       |               |         |         |          |   |      |      |      |   | (1,750   | )      
|Deferred stock-based compensation adjustments                                                       |                                         |                                         |           |   |             |   | (4      | )            |   |               | 4       |   |       |               |         |         |          |   |      |      |      |   |         |        
|Amortization of stock-based compensation                                                            |                                         |                                         |           |   |             |   |        |              |   |               | 221     |   |       |               |         |         |          |   |      |      |      |   | 221      |        
|                                                                                                    |                                         |                                         |            |   |             |   |         |              |   |               |         |   |       |               |          |         |          |  
|Balances at December 31, 2002                                                                       |                                         |                                         | 80,749,548 |   |             |   | 348,631 |              |   |               | (74     | ) |       |               | (97,994  | )       |          |   | 1,840 |      |      |   | 252,403  |        
|Components of comprehensive income:                                                                 |                                         |                                         |            |   |             |   |         |              |   |               |         |   |       |               |          |         |          |   |       |      |      |   |          |        
|                                                                                                    | Net income                              |                                         |            |  |             |   |         |             |   |               |         |  |       |               |          | 7,310   |          |   |       |     |      |   |          | 7,310   |         
|                                                                                                    | Foreign currency translation adjustment |                                         |            |  |             |   |         |             |   |               |         |  |       |               |          |        |          |   |       | 517  |      |   |          | 517     |         
|                                                                                                    | Unrealized losses on investments        |                                         |            |  |             |   |         |             |   |               |         |  |       |               |          |        |          |   |       | (571 | )    |   |          | (571    | )       
|                                                                                                    |                                         |                                         |            |   |             |   |         |              |   |               |         |   |       |               |          |         |          |  
|Comprehensive income                                                                                |                                         |                                         |            |   |             |   |         |              |   |               |         |   |       |               |          |         |          |   |       |      |      |   | 7,256    |        
|Common stock options exercised                                                                      |                                         |                                         | 1,532,320  |   |             |   | 6,988   |              |   |               |        |   |       |               |         |         |          |   |      |      |      |   | 6,988    |        
|Common stock issued under employee stock purchase plan                                              |                                         |                                         | 788,470    |   |             |   | 4,636   |              |   |               |        |   |       |               |         |         |          |   |      |      |      |   | 4,636    |        
|Compensation expense related to stock options                                                       |                                         |                                         |           |   |             |   | 47      |              |   |               |        |   |       |               |         |         |          |   |      |      |      |   | 47       |        
|Issuance of common stock and assumption of stock options in
    conjunction with Striva acquisition |                                         |                                         | 3,189,839  |   |             |   | 33,543  |              |   |               | (4,719  | ) |       |               |         |         |          |   |      |      |      |   | 28,824   |        
|Common stock issued for services rendered                                                           |                                         |                                         | 11,000     |   |             |   | 76      |              |   |               |        |   |       |               |         |         |          |   |      |      |      |   | 76       |        
|Repurchase and retirement of common stock                                                           |                                         |                                         | (1,642,498 | ) |             |   | (11,448 | )            |   |               |        |   |       |               |         |         |          |   |      |      |      |   | (11,448  | )      
|Deferred stock-based compensation adjustments and other                                             |                                         |                                         |           |   |             |   | 82      |              |   |               | (82     | ) |       |               |         |         |          |   |      |      |      |   |         |        
|Amortization of stock-based compensation                                                            |                                         |                                         |           |   |             |   |        |              |   |               | 817     |   |       |               |         |         |          |   |      |      |      |   | 817      |        
|                                                                                                    |                                         |                                         |            |   |             |   |         |              |   |               |         |   |       |               |          |         |          |  
|Balances at December 31, 2003                                                                       |                                         |                                         | 84,628,679 |   |             | $ | 382,555 |              |   | $             | (4,058  | ) |       | $             | (90,684  | )       |          | $ | 1,786 |      |      | $ | 289,599  |        
|Components of comprehensive loss:                                                                   |                                         |                                         |            |   |             |   |         |              |   |               |         |   |       |               |          |         |          |   |       |      |      |   |          |        
|                                                                                                    |                                         | Net loss                                |            |   |            |   |         |              |  |               |         |   |      |               |          |         | (104,404 | ) |       |      |     |   |          |         | (104,404 | )
|                                                                                                    |                                         | Foreign currency translation adjustment |            |   |            |   |         |              |  |               |         |   |      |               |          |         |         |   |       |      | 786  |   |          |         | 786      |  
|                                                                                                    |                                         | Unrealized losses on investments        |            |   |            |   |         |              |  |               |         |   |      |               |          |         |         |   |       |      | (797 | ) |          |         | (797     | )
|                                                                                                    |                                         |                                         |            |   |             |   |         |              |   |               |         |   |       |               |          |         |          |  
|Comprehensive loss                                                                                  |                                         |                                         |            |   |             |   |         |              |   |               |         |   |       |               |          |         |          |   |       |      |      |   | (104,415 | )      
|Common stock options exercised                                                                      |                                         |                                         | 2,392,359  |   |             |   | 8,850   |              |   |               |        |   |       |               |         |         |          |   |      |      |      |   | 8,850    |        
|Common stock issued under employee stock purchase plan                                              |                                         |                                         | 805,404    |   |             |   | 4,448   |              |   |               |        |   |       |               |         |         |          |   |      |      |      |   | 4,448    |        
|Compensation expense related to stock options                                                       |                                         |                                         |           |   |             |   | 1,341   |              |   |               |        |   |       |               |         |         |          |   |      |      |      |   | 1,341    |        
|Repurchase and retirement of common stock                                                           |                                         |                                         | (1,055,000 | ) |             |   | (6,118  | )            |   |               |        |   |       |               |         |         |          |   |      |      |      |   | (6,118   | )      
|Deferred stock-based compensation adjustments                                                       |                                         |                                         |           |   |             |   | (1,041  | )            |   |               | 1,041   |   |       |               |         |         |          |   |      |      |      |   |         |        
|Amortization of stock-based compensation                                                            |                                         |                                         |           |   |             |   |        |              |   |               | 2,017   |   |       |               |         |         |          |   |      |      |      |   | 2,017    |        
|                                                                                                    |                                         |                                         |            |   |             |   |         |              |   |               |         |   |       |               |          |         |          |  
|Balances at December 31, 2004                                                                       |                                         |                                         | 86,771,442 |   |             | $ | 390,035 |              |   | $             | (1,000  | ) |       | $             | (195,088 | )       |          | $ | 1,775 |      |      | $ | 195,722  |        
|                                                                                                    |                                         |                                         |            |   |             |   |         |              |   |               |         |   |       |               |          |         |          |  



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INFORMATICA CORPORATION


CONSOLIDATED STATEMENTS OF CASH FLOWS


|                                                                                             |                                                                                              |                                           |                                           |        |        |         |          |        |        |         |          |        |        |         |  
|-------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------- | ----------------------------------------- | ----------------------------------------- | ------ | ------ | ------- | -------- | ------ | ------ | ------- | -------- | ------ | ------ | ------- | -
|                                                                                             |                                                                                              | Year Ended December 31,                   |                                          
|                                                                                             |                                                                                              |                                           |                                          
|                                                                                             |                                                                                              | 2004                                      |                                           |        | 2003   |         |          | 2002   |       
|                                                                                             |                                                                                              |                                           |                                           |        |        |         |          |        |       
|                                                                                             |                                                                                              | (In thousands)                            |                                          
|Operating activities                                                                         |                                                                                              |                                           |                                           |        |        |         |          |        |        |         |          |       
|Net income (loss)                                                                            |                                                                                              | $                                         | (104,404                                  | )      |        | $       | 7,310    |        |        | $       | (15,614  | )     
|Adjustments to reconcile net income (loss) to net cash provided
    by operating activities: |                                                                                              |                                           |                                           |        |        |         |          |        |        |         |          |       
|                                                                                             | Depreciation and amortization                                                                |                                           |                                           | 9,229  |        |         |          | 11,181 |        |         |          | 10,477 |       
|                                                                                             | Sales and returns allowances                                                                 |                                           |                                           | (356   | )      |         |          |       |        |         |          | 425    |       
|                                                                                             | Provision for doubtful accounts                                                              |                                           |                                           | 361    |        |         |          | 145    |        |         |          | 1,181  |       
|                                                                                             | Amortization and compensation expense related to stock options                               |                                           |                                           | 3,358  |        |         |          | 940    |        |         |          | 411    |       
|                                                                                             | Amortization of intangible assets                                                            |                                           |                                           | 2,519  |        |         |          | 1,178  |        |         |          | 1,140  |       
|                                                                                             | Purchased in-process research and development                                                |                                           |                                           |       |        |         |          | 4,524  |        |         |          |       |       
|                                                                                             | Non-cash restructuring charges                                                               |                                           |                                           | 21,556 |        |         |          |       |        |         |          | 1,887  |       
|                                                                                             | Gain on the sale of investments                                                              |                                           |                                           |       |        |         |          | (121   | )      |         |          | (154   | )     
|                                                                                             | Loss on disposal of property and equipment                                                   |                                           |                                           | 32     |        |         |          | 43     |        |         |          | 357    |       
|                                                                                             | Investment impairment charge                                                                 |                                           |                                           | 500    |        |         |          |       |        |         |          |       |       
|                                                                                             | Adjustment to acquisition allocation                                                         |                                           |                                           |       |        |         |          |       |        |         |          | (710   | )     
|                                                                                             | Changes in operating assets and liabilities:                                                 |                                           |                                           |        |        |         |          |        |        |         |          |        |       
|                                                                                             |                                                                                              | Accounts receivable                       |                                           |        | (8,165 | )       |          |        | (3,108 | )       |          |        | (2,457 | )      
|                                                                                             |                                                                                              | Prepaid expenses and other current assets |                                           |        | (2,540 | )       |          |        | 4,068  |         |          |        | (1,619 | )      
|                                                                                             |                                                                                              | Other assets                              |                                           |        | (336   | )       |          |        | (768   | )       |          |        | 595    |        
|                                                                                             |                                                                                              | Accounts payable                          |                                           |        | 3,018  |         |          |        | 1,986  |         |          |        | (665   | )      
|                                                                                             |                                                                                              | Accrued liabilities                       |                                           |        | (9,555 | )       |          |        | (1,513 | )       |          |        | 9,431  |        
|                                                                                             |                                                                                              | Accrued compensation and related expenses |                                           |        | 1,430  |         |          |        | 1,558  |         |          |        | (3,182 | )      
|                                                                                             |                                                                                              | Income taxes payable                      |                                           |        | 917    |         |          |        | (81    | )       |          |        | (810   | )      
|                                                                                             |                                                                                              | Accrued restructuring charges             |                                           |        | 94,084 |         |          |        | (4,539 | )       |          |        | 10,374 |        
|                                                                                             |                                                                                              | Accrued merger costs                      |                                           |        | (247   | )       |          |        | (955   | )       |          |        |       |        
|                                                                                             |                                                                                              | Deferred revenue                          |                                           |        | 11,131 |         |          |        | (1,349 | )       |          |        | 15,148 |        
|                                                                                             |                                                                                              |                                           |                                           |        |        |         |          |        |       
|                                                                                             |                                                                                              |                                           | Net cash provided by operating activities |        |        | 22,532  |          |        |        | 20,499  |          |        |        | 26,215  |  
|                                                                                             |                                                                                              |                                           |                                           |        |        |         |          |        |       
|Investing activities                                                                         |                                                                                              |                                           |                                           |        |        |         |          |        |        |         |          |       
|Purchase of property and equipment                                                           |                                                                                              |                                           | (12,515                                   | )      |        |         | (2,569   | )      |        |         | (6,911   | )     
|Purchases of investments                                                                     |                                                                                              |                                           | (217,849                                  | )      |        |         | (193,019 | )      |        |         | (240,184 | )     
|Proceeds from the sale and maturities of investments                                         |                                                                                              |                                           | 205,782                                   |        |        |         | 181,964  |        |        |         | 199,913  |       
|Acquisitions, net of cash acquired                                                           |                                                                                              |                                           |                                          |        |        |         | (30,279  | )      |        |         |         |       
|                                                                                             |                                                                                              |                                           |                                           |        |        |         |          |        |       
|                                                                                             |                                                                                              |                                           | Net cash used in investing activities     |        |        | (24,582 | )        |        |        | (43,903 | )        |        |        | (47,182 | )
|                                                                                             |                                                                                              |                                           |                                           |        |        |         |          |        |       
|Financing activities                                                                         |                                                                                              |                                           |                                           |        |        |         |          |        |        |         |          |       
|Proceeds from issuance of common stock                                                       |                                                                                              |                                           | 13,298                                    |        |        |         | 11,624   |        |        |         | 7,860    |       
|Repurchase and retirement of common stock                                                    |                                                                                              |                                           | (6,118                                    | )      |        |         | (11,448  | )      |        |         | (1,750   | )     
|                                                                                             |                                                                                              |                                           |                                           |        |        |         |          |        |       
|                                                                                             |                                                                                              |                                           | Net cash provided by financing activities |        |        | 7,180   |          |        |        | 176     |          |        |        | 6,110   |  
|                                                                                             |                                                                                              |                                           |                                           |        |        |         |          |        |       
|Effect of foreign exchange rate changes on cash and cash
    equivalents                     |                                                                                              |                                           | 908                                       |        |        |         | 541      |        |        |         | 783      |       
|                                                                                             |                                                                                              |                                           |                                           |        |        |         |          |        |       
|Increase (decrease) in cash and cash equivalents                                             |                                                                                              |                                           | 6,038                                     |        |        |         | (22,687  | )      |        |         | (14,074  | )     
|Cash and cash equivalents at beginning of year                                               |                                                                                              |                                           | 82,903                                    |        |        |         | 105,590  |        |        |         | 119,664  |       
|                                                                                             |                                                                                              |                                           |                                           |        |        |         |          |        |       
|Cash and cash equivalents at end of year                                                     |                                                                                              | $                                         | 88,941                                    |        |        | $       | 82,903   |        |        | $       | 105,590  |       
|                                                                                             |                                                                                              |                                           |                                           |        |        |         |          |        |       
|Supplemental disclosures:                                                                    |                                                                                              |                                           |                                           |        |        |         |          |        |        |         |          |       
|                                                                                             | Interest paid                                                                                |                                           | $                                         |       |        |         | $        | 6      |        |         | $        | 9      |       
|                                                                                             |                                                                                              |                                           |                                           |        |        |         |          |        |       
|                                                                                             | Income taxes paid                                                                            |                                           | $                                         | 304    |        |         | $        | 2,126  |        |         | $        | 1,943  |       
|                                                                                             |                                                                                              |                                           |                                           |        |        |         |          |        |       
|Supplemental disclosures of non-cash investing and financing
    activities:                 |                                                                                              |                                           |                                           |        |        |         |          |        |        |         |          |       
|                                                                                             | Deferred stock-based compensation related to options granted and
    restricted stock issued |                                           | $                                         | (1,041 | )      |         | $        | 4,801  |        |         | $        | (4     | )     
|                                                                                             |                                                                                              |                                           |                                           |        |        |         |          |        |       
|                                                                                             | Common stock issued for acquisitions                                                         |                                           | $                                         |       |        |         | $        | 27,796 |        |         | $        |       |       
|                                                                                             |                                                                                              |                                           |                                           |        |        |         |          |        |       
|                                                                                             | Unrealized gain (loss) on available-for-sale securities                                      |                                           | $                                         | (797   | )      |         | $        | (571   | )      |         | $        | 305    |       
|                                                                                             |                                                                                              |                                           |                                           |        |        |         |          |        |       



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INFORMATICA CORPORATION


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS




|   |                                                                                    
|-- | -----------------------------------------------------------------------------------
|1. | Description of the Company and a Summary of its Significant
    Accounting Policies



| |                           
| | --------------------------
| | Description of the Company





| |                      
| | ---------------------
| | Basis of Presentation







|                           |                                |                |     |     |      |   |     |     | 
|-------------------------- | ------------------------------ | -------------- | --- | --- | ---- | - | --- | --- | 
|                           |                                | Year Ended     |    
|                           |                                | December 31    |    
|                           |                                |                |    
|                           |                                | 2003           |     |     | 2002 |  
|                           |                                |                |     |     |      |  
|                           |                                | (In thousands) |    
|Cost of service revenues   |                                | $              | 12  |     |      | $ | 4   |    
|Research and development   |                                |                | 468 |     |      |   | 205 |    
|Sales and marketing        |                                |                | 252 |     |      |   | 10  |    
|General and administrative |                                |                | 85  |     |      |   | 2   |    
|                           |                                |                |     |     |      |  
|                           | Total stock-based compensation |                | $   | 817 |      |   | $   | 221 | 
|                           |                                |                |     |     |      |  



| |                 
| | ----------------
| | Use of Estimates



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INFORMATICA CORPORATION


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




| |                                              
| | ---------------------------------------------
| | Cash and Cash Equivalents and Restricted Cash





| |            
| | -----------
| | Investments





| |                       
| | ----------------------
| | Property and Equipment





| |                           
| | --------------------------
| | Software Development Costs

Accounting for the Costs of
Computer Software to be Sold, Leased, or Otherwise
Marketed,


, Accounting for Costs of Computer
Software Developed or Obtained for Internal Use,




| |         
| | --------
| | Goodwill

Goodwill and Other
Intangible Assets


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INFORMATICA CORPORATION


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)






| |                                
| | -------------------------------
| | Impairment of Long-Lived Assets





| |                                                                                              
| | ---------------------------------------------------------------------------------------------
| | Fair Value of Financial Instruments, Concentrations of
    Credit Risk and Credit Evaluations







| |                    
| | -------------------
| | Revenue Recognition



Software Revenue
Recognition, Modification of SOP 97-2, Software Revenue
Recognition, With Respect to Certain Transactions.


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INFORMATICA CORPORATION


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)














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INFORMATICA CORPORATION


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)
















| |                            
| | ---------------------------
| | Shipping and Handling Costs





| |                    
| | -------------------
| | Advertising Expense



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INFORMATICA CORPORATION


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




| |                            
| | ---------------------------
| | Net Income (Loss) Per Share

Earnings per Share,




|                                                              |  |                                       |          |   |      |   |        |      |  |   |         |  
|------------------------------------------------------------- |  | ------------------------------------- | -------- | - | ---- | - | ------ | ---- |  | - | ------- | -
|                                                              |  | Year Ended December 31,               |         
|                                                              |  |                                       |         
|                                                              |  | 2004                                  |          |   | 2003 |   |        | 2002 | 
|                                                              |  |                                       |          |   |      |   |        |      | 
|                                                              |  | (In thousands, except per share data) |         
|Net income (loss)                                             |  | $                                     | (104,404 | ) |      | $ | 7,310  |      |  | $ | (15,614 | )
|                                                              |  |                                       |          |   |      |   |        |      | 
|Weighted-average shares outstanding                           |  |                                       | 85,919   |   |      |   | 82,158 |      |  |   | 79,753  |  
|Weighted-average unvested common shares subject to repurchase |  |                                       | (107     | ) |      |   | (109   | )    |  |   |        |  
|                                                              |  |                                       |          |   |      |   |        |      | 
|Weighted-average basic common shares                          |  |                                       | 85,812   |   |      |   | 82,049 |      |  |   | 79,753  |  
|Effect of dilutive securities (stock options)                 |  |                                       |         |   |      |   | 3,151  |      |  |   |        |  
|                                                              |  |                                       |          |   |      |   |        |      | 
|Weighted-average diluted common shares                        |  |                                       | 85,812   |   |      |   | 85,200 |      |  |   | 79,753  |  
|Net income (loss) per common share  basic and diluted        |  | $                                     | (1.22    | ) |      | $ | 0.09   |      |  | $ | (0.20   | )
|                                                              |  |                                       |          |   |      |   |        |      | 





| |                         
| | ------------------------
| | Stock-Based Compensation

Accounting for
Stock Issued to Employees, Accounting for Stock-Based Compensation Accounting for
Stock-Based Compensation  Transition and
Disclosure. , Accounting for Equity
Instruments That are Issued to Other Than Employees for
Acquiring, or in Conjunction with Selling, Goods or
Services.


Accounting for Stock Appreciation Rights and Other
Variable Option or Award Plans (an interpretation of APB
Opinions No. 15 and 25)


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INFORMATICA CORPORATION


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                        |  |         |     |   |      |  |     |      |  |  |      |   |  |      |     |   |      |  |     |   |  |  |     |  
|----------------------- |  | ------- | --- | - | ---- |  | --- | ---- |  |  | ---- | - |  | ---- | --- | - | ---- |  | --- | - |  |  | --- | -
|                        |  | Options |     |   | ESPP | 
|                        |  |         |     |   |      | 
|                        |  | 2004    |     |   | 2003 |  |     | 2002 |  |  | 2004 |   |  | 2003 |     |   | 2002 | 
|                        |  |         |     |   |      |  |     |      |  |  |      |   |  |      |     |   |      | 
|Expected life (years)   |  |         | 4.4 |   |      |  | 3.1 |      |  |  | 2.4  |   |  |      | 0.5 |   |      |  | 0.5 |   |  |  | 0.5 |  
|Expected volatility     |  |         | 80  | % |      |  | 80  | %    |  |  | 97   | % |  |      | 56  | % |      |  | 84  | % |  |  | 97  | %
|Risk-free interest rate |  |         | 3.0 | % |      |  | 1.7 | %    |  |  | 3.8  | % |  |      | 1.4 | % |      |  | 2.0 | % |  |  | 3.8 | %





|                                                           |                                                                                                                          |                                       |          |         |      |   |         |         |   |   |         |         |  
|---------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------ | ------------------------------------- | -------- | ------- | ---- | - | ------- | ------- | - | - | ------- | ------- | -
|                                                           |                                                                                                                          | Year Ended December 31,               |         
|                                                           |                                                                                                                          |                                       |         
|                                                           |                                                                                                                          | 2004                                  |          |         | 2003 |   |         | 2002    |  
|                                                           |                                                                                                                          |                                       |          |         |      |   |         |         |  
|                                                           |                                                                                                                          | (In thousands, except per share data) |         
|Net income (loss), as reported                             |                                                                                                                          | $                                     | (104,404 | )       |      | $ | 7,310   |         |   | $ | (15,614 | )      
|Add:                                                       |                                                                                                                          |                                       |          |         |      |   |         |         |   |   |         |        
|                                                           | Stock-based compensation expense included in reported net income
    (loss), net of related tax effects                  |                                       |          | 3,358   |      |   |         | 940     |   |   |         | 411     |  
|Deduct:                                                    |                                                                                                                          |                                       |          |         |      |   |         |         |   |   |         |        
|                                                           | Total stock-based compensation expense determined under fair
    value method for all awards, net of related tax effects |                                       |          | (17,068 | )    |   |         | (24,547 | ) |   |         | (47,442 | )
|                                                           |                                                                                                                          |                                       |          |         |      |   |         |         |  
|Net loss, pro forma                                        |                                                                                                                          | $                                     | (118,114 | )       |      | $ | (16,297 | )       |   | $ | (62,645 | )      
|                                                           |                                                                                                                          |                                       |          |         |      |   |         |         |  
|Basic and diluted net income (loss) per share, as reported |                                                                                                                          | $                                     | (1.22    | )       |      | $ | 0.09    |         |   | $ | (0.20   | )      
|                                                           |                                                                                                                          |                                       |          |         |      |   |         |         |  
|Basic and diluted net loss per share, pro forma            |                                                                                                                          | $                                     | (1.38    | )       |      | $ | (0.20   | )       |   | $ | (0.79   | )      
|                                                           |                                                                                                                          |                                       |          |         |      |   |         |         |  







| |                            
| | ---------------------------
| | Comprehensive Income (Loss)

Reporting Comprehensive Income,


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INFORMATICA CORPORATION


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)






| |             
| | ------------
| | Income Taxes

Accounting for Income
Taxes,




| |                                 
| | --------------------------------
| | Recent Accounting Pronouncements

The Meaning of Other-Than-Temporary Impairment and Its
Application to Certain Investments.


Share-Based
Payment, Accounting for
Stock-Based Compensation. Accounting for Stock Issued to
Employees, Statement of Cash Flows. requires




| |   |                                                                                                                                                                                                                                                                                                                                                                                                                          
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | A modified prospective method in which compensation
    cost is recognized beginning with the effective date (a) based
    on the requirements of SFAS 123(R) for all share-based
    payments granted after the effective date and (b) based on the
    requirements of SFAS 123(R) for all awards granted to
    employees prior to the effective date of SFAS 123(R) that
    remain unvested on the effective date.
|
| |  | A prospective method which includes the requirements
    of the modified prospective method described above, but also
    permits entities to restate based on the amounts previously
    recognized under SFAS 123(R) for purposed of pro forma
    disclosures either (a) all prior periods presented or (b) prior
    interim periods of the year of adoption.                                                      



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INFORMATICA CORPORATION


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




Accounting and
Disclosure Guidance for the Foreign Earnings Repatriation
Provisions within the American Jobs Creation Act of 2004


Exchanges of Nonmonetary
Assets, Accounting for Nonmonetary
Transactions




|   |                      
|-- | ---------------------
|2. | Business Combinations



| |                   
| | ------------------
| | Striva Corporation



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INFORMATICA CORPORATION


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                                                                            |       |   |      |      | 
|--------------------------------------------------------------------------- | ----- | - | ---- | ---- | 
|Cash paid and common stock issued                                           |       | $ | 58.5 |     
|Accrued merger costs                                                        |       |   | 1.9  |     
|Fair value of options assumed, net of deferred stock-based
    compensation |       |   | 1.0  |     
|Liabilities assumed                                                         |       |   | 3.4  |     
|                                                                            |       |   |     
|                                                                            | Total |   | $    | 64.8 | 
|                                                                            |       |   |     



|                                                                       |                                               |       |     |      |      | 
|---------------------------------------------------------------------- | --------------------------------------------- | ----- | --- | ---- | ---- | 
|Tangible assets acquired (including cash received of
    $0.4 million) |                                               | $     | 2.5 |     
|Intangible assets:                                                     |                                               |       |     |     
|                                                                       | Developed technology                          |       |     | 1.8  |     
|                                                                       | Core technology                               |       |     | 3.2  |     
|                                                                       | Customer relationships                        |       |     | 0.9  |     
|                                                                       | Purchased in-process research and development |       |     | 4.5  |     
|                                                                       | Goodwill                                      |       |     | 51.9 |     
|                                                                       |                                               |       |    
|                                                                       |                                               | Total |     | $    | 64.8 | 
|                                                                       |                                               |       |    

Business
Combinations, Applicability of FASB Statement No. 2 to Business
Combinations Accounted for by the Purchase Method






61



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INFORMATICA CORPORATION


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


Recognition of Liabilities in Connection with a
Business Combination,








|                                                              |  |                           |         |   |      |   |         |  
|------------------------------------------------------------- |  | ------------------------- | ------- | - | ---- | - | ------- | -
|                                                              |  | Year Ended December 31,   |        
|                                                              |  |                           |        
|                                                              |  | 2003                      |         |   | 2002 |  
|                                                              |  |                           |         |   |      |  
|                                                              |  | (In thousands, except per |        
|                                                              |  | share data)               |        
|Pro forma adjusted total revenue                              |  | $                         | 211,604 |   |      | $ | 199,233 |  
|Pro forma adjusted net loss                                   |  | $                         | (1,247  | ) |      | $ | (17,906 | )
|Pro forma adjusted net loss per share  basic and
    diluted |  | $                         | (0.01   | ) |      | $ | (0.22   | )
|Pro forma weighted average shares  basic and diluted         |  |                           | 84,809  |   |      |   | 82,630  |  



|   |            
|-- | -----------
|3. | Investments



62



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INFORMATICA CORPORATION


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                                |  |                |         |       |            |       |            |  |  |            |      |   |  |   |         | 
|------------------------------- |  | -------------- | ------- | ----- | ---------- | ----- | ---------- |  |  | ---------- | ---- | - |  | - | ------- | 
|                                |  |                |         | Gross |            | Gross |            |  | 
|                                |  | Amortized      |         |       | Unrealized |       | Unrealized |  |  |           
|                                |  | Cost           |         |       | Gains      |       | Losses     |  |  | Fair Value |     
|                                |  |                |         |       |            |       |            |  |  |            |     
|                                |  | (In thousands) |        
|Money market funds              |  | $              | 1,576   |       |            | $     |           |  |  | $          |     |   |  | $ | 1,576   | 
|Corporate notes and bonds       |  |                | 19,446  |       |            |       |           |  |  |            | (146 | ) |  |   | 19,300  | 
|Municipal securities            |  |                | 40,326  |       |            |       |           |  |  |            | (9   | ) |  |   | 40,317  | 
|U.S. Government notes and bonds |  |                | 79,782  |       |            |       |            |  |  |            | (490 | ) |  |   | 79,292  | 
|Auction rate securities         |  |                | 12,800  |       |            |       |           |  |  |            |      |   |  |   | 12,800  | 
|                                |  |                |         |       |            |       |            |  |  |            |      |  
|                                |  | $              | 153,930 |       |            | $     |            |  |  | $          | (645 | ) |  | $ | 153,285 | 
|                                |  |                |         |       |            |       |            |  |  |            |      |  





|                                |  |                |         |       |            |   |       |            |  |            |   |  |  |   |         | 
|------------------------------- |  | -------------- | ------- | ----- | ---------- | - | ----- | ---------- |  | ---------- | - |  |  | - | ------- | 
|                                |  |                |         | Gross |            |   | Gross |            | 
|                                |  | Amortized      |         |       | Unrealized |   |       | Unrealized |  |           
|                                |  | Cost           |         |       | Gains      |   |       | Losses     |  | Fair Value |  
|                                |  |                |         |       |            |   |       |            |  |            |  
|                                |  | (In thousands) |        
|Money market funds              |  | $              | 9,251   |       |            | $ |      |            |  | $          |  |  |  | $ | 9,251   | 
|Corporate notes and bonds       |  |                | 25,420  |       |            |   | 51    |            |  |            |  |  |  |   | 25,471  | 
|Municipal securities            |  |                | 53,230  |       |            |   |      |            |  |            |  |  |  |   | 53,230  | 
|U.S. Government notes and bonds |  |                | 61,637  |       |            |   | 101   |            |  |            |  |  |  |   | 61,738  | 
|Commercial paper                |  |                | 4,162   |       |            |   |      |            |  |            |  |  |  |   | 4,162   | 
|                                |  |                |         |       |            |   |       |            |  |            |   | 
|                                |  | $              | 153,700 |       |            | $ | 152   |            |  | $          |  |  |  | $ | 153,852 | 
|                                |  |                |         |       |            |   |       |            |  |            |   | 





|   |                       
|-- | ----------------------
|4. | Property and Equipment



|                                                |  |                |         |   |      |   |         |  
|----------------------------------------------- |  | -------------- | ------- | - | ---- | - | ------- | -
|                                                |  | December 31,   |        
|                                                |  |                |        
|                                                |  | 2004           |         |   | 2003 |  
|                                                |  |                |         |   |      |  
|                                                |  | (In thousands) |        
|Computer and office equipment                   |  | $              | 27,436  |   |      | $ | 26,103  |  
|Furniture and fixtures                          |  |                | 516     |   |      |   | 6,718   |  
|Leasehold improvements                          |  |                | 4,216   |   |      |   | 33,391  |  
|Capital work-in-progress (other)                |  |                | 8,708   |   |      |   |        |  
|Capital work-in-progress (software)             |  |                |        |   |      |   | 348     |  
|                                                |  |                |         |   |      |  
|                                                |  |                | 40,876  |   |      |   | 66,560  |  
|Less: accumulated depreciation and amortization |  |                | (20,813 | ) |      |   | (27,826 | )
|                                                |  |                |         |   |      |  
|                                                |  | $              | 20,063  |   |      | $ | 38,734  |  
|                                                |  |                |         |   |      |  



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INFORMATICA CORPORATION


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)






|   |                                     
|-- | ------------------------------------
|5. | Goodwill and Other Intangible Assets



|                        |  |                   |       |  |                   |   |        |            |  |       |          |  |  |              |       |  |            |   |        |   |  |   |       | 
|----------------------- |  | ----------------- | ----- |  | ----------------- | - | ------ | ---------- |  | ----- | -------- |  |  | ------------ | ----- |  | ---------- | - | ------ | - |  | - | ----- | 
|                        |  | December 31, 2004 |       |  | December 31, 2003 |  
|                        |  |                   |       |  |                   |  
|                        |  | Gross             |       |  |                   |   | Net    |            |  | Gross |          |  |  |              | Net   | 
|                        |  | Carrying          |       |  | Accumulated       |   |        | Intangible |  |       | Carrying |  |  | Accumulated  |       |  | Intangible |  
|                        |  | Amount            |       |  | Amortization      |   |        | Assets     |  |       | Amount   |  |  | Amortization |       |  | Assets     |  
|                        |  |                   |       |  |                   |   |        |            |  |       |          |  |  |              |       |  |            |  
|                        |  | (In thousands)    |       |  | (In thousands)    |  
|Core technology         |  | $                 | 6,429 |  |                   | $ | (4,257 | )          |  | $     | 2,172    |  |  | $            | 6,355 |  |            | $ | (3,343 | ) |  | $ | 3,012 | 
|Developed technology    |  |                   | 1,775 |  |                   |   | (1,775 | )          |  |       |         |  |  |              | 1,775 |  |            |   | (359   | ) |  |   | 1,416 | 
|Customer relationships  |  |                   | 945   |  |                   |   | (237   | )          |  |       | 708      |  |  |              | 945   |  |            |   | (48    | ) |  |   | 897   | 
|Patents                 |  |                   | 297   |  |                   |   | (297   | )          |  |       |         |  |  |              | 297   |  |            |   | (297   | ) |  |   |      | 
|                        |  |                   |       |  |                   |   |        |            |  |       |          |  |  |              |       |  |            |  
|Total intangible assets |  | $                 | 9,446 |  |                   | $ | (6,566 | )          |  | $     | 2,880    |  |  | $            | 9,372 |  |            | $ | (4,047 | ) |  | $ | 5,325 | 
|                        |  |                   |       |  |                   |   |        |            |  |       |          |  |  |              |       |  |            |  









|   |                              
|-- | -----------------------------
|6. | Commitments and Contingencies



| |                  
| | -----------------
| | Lease Obligations





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INFORMATICA CORPORATION


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)








|                             |  |                |         |  |          |   |        |     |  |   |         | 
|---------------------------- |  | -------------- | ------- |  | -------- | - | ------ | --- |  | - | ------- | 
|                             |  | Operating      |         |  | Sublease |   |        |    
|                             |  | Leases         |         |  | Income   |   |        | Net | 
|                             |  |                |         |  |          |   |        |     | 
|                             |  | (In thousands) |        
|Years ending December 31:    |  |                |         |  |          |   |        |     |  |   |         | 
|2005                         |  | $              | 20,640  |  |          | $ | 2,108  |     |  | $ | 18,532  | 
|2006                         |  |                | 20,947  |  |          |   | 2,747  |     |  |   | 18,200  | 
|2007                         |  |                | 19,965  |  |          |   | 2,194  |     |  |   | 17,771  | 
|2008                         |  |                | 16,778  |  |          |   | 2,016  |     |  |   | 14,762  | 
|2009                         |  |                | 17,230  |  |          |   | 1,242  |     |  |   | 15,988  | 
|Thereafter                   |  |                | 61,395  |  |          |   |       |     |  |   | 61,395  | 
|                             |  |                |         |  |          |   |        |     | 
|Total minimum lease payments |  | $              | 156,955 |  |          | $ | 10,307 |     |  | $ | 146,648 | 
|                             |  |                |         |  |          |   |        |     | 





| |                 
| | ----------------
| | Indemnifications







65



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INFORMATICA CORPORATION


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)






| |           
| | ----------
| | Warranties

Accounting for
Contingencies.




|   |                      
|-- | ---------------------
|7. | Restructuring Charges



| |                        
| | -----------------------
| | 2004 Restructuring Plan



66



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INFORMATICA CORPORATION


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                                  |  |                |   |               |  |   |          |  |          |   |   |                     |  |   |              |   |  |   |       |  |  |   |        | 
|--------------------------------- |  | -------------- | - | ------------- |  | - | -------- |  | -------- | - | - | ------------------- |  | - | ------------ | - |  | - | ----- |  |  | - | ------ | 
|                                  |  | Accrued        |   |               |  |   |          |  |          |   |   | Accrued             | 
|                                  |  | Restructuring  |   |               |  |   |          |  |          |   |   | Restructuring       | 
|                                  |  | Charges at     |   |               |  |   |          |  |          |   |   | Charges at          | 
|                                  |  | December 31,   |   | Restructuring |  |   | Net Cash |  | Non-Cash |   |   | Reclass of Deferred |  |   | December 31, |  
|                                  |  | 2003           |   | Charges       |  |   | Payments |  | Charges  |   |   | Rent Obligations    |  |   | 2004         |  
|                                  |  |                |   |               |  |   |          |  |          |   |   |                     |  |   |              |  
|                                  |  | (In thousands) |  
|Property and equipment write-offs |  | $              |  |               |  | $ | 21,556   |  |          | $ |  |                     |  | $ | (21,556      | ) |  | $ |      |  |  | $ |       | 
|Excess leased facilities          |  |                |  |               |  |   | 82,014   |  |          |   |  |                     |  |   |             |   |  |   | 6,507 |  |  |   | 88,521 | 
|                                  |  |                |   |               |  |   |          |  |          |   |   |                     |  |   |              |   |  |  
|                                  |  | $              |  |               |  | $ | 103,570  |  |          | $ |  |                     |  | $ | (21,556      | ) |  | $ | 6,507 |  |  | $ | 88,521 | 
|                                  |  |                |   |               |  |   |          |  |          |   |   |                     |  |   |              |   |  |  





| |                        
| | -----------------------
| | 2001 Restructuring Plan







67



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##### Table of Contents



INFORMATICA CORPORATION


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)






|                         |  |                |        |  |               |   |       |          |  |   |            |   |               |            |   |              |  |   |     |  |  |   |        | 
|------------------------ |  | -------------- | ------ |  | ------------- | - | ----- | -------- |  | - | ---------- | - | ------------- | ---------- | - | ------------ |  | - | --- |  |  | - | ------ | 
|                         |  | Accrued        |        |  |               |   |       |          |  |   |            |   | Accrued       |           
|                         |  | Restructuring  |        |  |               |   |       |          |  |   |            |   | Restructuring |           
|                         |  | Charges at     |        |  |               |   |       |          |  |   | Reclass of |   |               | Charges at |  
|                         |  | December 31,   |        |  | Restructuring |   |       | Net Cash |  |   | Non-Cash   |   | Deferred Rent |            |   | December 31, | 
|                         |  | 2003           |        |  | Charges       |   |       | Payments |  |   | Charges    |   | Obligations   |            |   | 2004         | 
|                         |  |                |        |  |               |   |       |          |  |   |            |   |               |            |   |              | 
|                         |  | (In thousands) |       
|Excess leased facilities |  | $              | 15,167 |  |               | $ | 9,065 |          |  | $ | (4,465     | ) |               | $          |  |              |  | $ | 963 |  |  | $ | 20,730 | 
|                         |  |                |        |  |               |   |       |          |  |   |            |   |               |            |   |              |  |  



|                         |  |                |        |  |               |   |          |  |  |          |               |              |  |   |   |  |  |   |        | 
|------------------------ |  | -------------- | ------ |  | ------------- | - | -------- |  |  | -------- | ------------- | ------------ |  | - | - |  |  | - | ------ | 
|                         |  | Accrued        |        |  |               |   |          |  |  |          | Accrued       |             
|                         |  | Restructuring  |        |  |               |   |          |  |  |          | Restructuring |             
|                         |  | Charges at     |        |  |               |   |          |  |  |          | Charges at    |             
|                         |  | December 31,   |        |  | Restructuring |   | Net Cash |  |  | Non-Cash |               | December 31, | 
|                         |  | 2002           |        |  | Charges       |   | Payments |  |  | Charges  |               | 2003         | 
|                         |  |                |        |  |               |   |          |  |  |          |               |              | 
|                         |  | (In thousands) |       
|Excess leased facilities |  | $              | 19,706 |  |               | $ |         |  |  | $        | (4,539        | )            |  | $ |  |  |  | $ | 15,167 | 
|                         |  |                |        |  |               |   |          |  |  |          |               |              |  |   |  



|                                  |  |                |       |  |               |   |        |          |  |   |               |   |  |              |        |   |  |   |        | 
|--------------------------------- |  | -------------- | ----- |  | ------------- | - | ------ | -------- |  | - | ------------- | - |  | ------------ | ------ | - |  | - | ------ | 
|                                  |  | Accrued        |       |  |               |   |        |          |  |   | Accrued       |  
|                                  |  | Restructuring  |       |  |               |   |        |          |  |   | Restructuring |  
|                                  |  | Charges at     |       |  |               |   |        |          |  |   | Charges at    |  
|                                  |  | December 31,   |       |  | Restructuring |   |        | Net Cash |  |   | Non-Cash      |   |  | December 31, |       
|                                  |  | 2001           |       |  | Charges       |   |        | Payments |  |   | Charges       |   |  | 2002         |       
|                                  |  |                |       |  |               |   |        |          |  |   |               |   |  |              |       
|                                  |  | (In thousands) |      
|Property and equipment write-offs |  | $              |      |  |               | $ | 1,887  |          |  | $ |              |   |  | $            | (1,887 | ) |  | $ |       | 
|Excess leased facilities          |  |                | 9,332 |  |               |   | 15,143 |          |  |   | (4,769        | ) |  |              |       |   |  |   | 19,706 | 
|                                  |  |                |       |  |               |   |        |          |  |   |               |   |  |              |       
|                                  |  | $              | 9,332 |  |               | $ | 17,030 |          |  | $ | (4,769        | ) |  | $            | (1,887 | ) |  | $ | 19,706 | 
|                                  |  |                |       |  |               |   |        |          |  |   |               |   |  |              |       







68



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##### Table of Contents



INFORMATICA CORPORATION


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


8.     Stockholders Equity




| |             
| | ------------
| | Common Stock



| |                  
| | -----------------
| | Repurchase Rights







| |                                   
| | ----------------------------------
| | Stock Issued for Services Rendered





| |                   
| | ------------------
| | Stock Option Plans



| |                          
| | -------------------------
| | 1999 Stock Incentive Plan





| |                                                
| | -----------------------------------------------
| | 1999 Non-Employee Director Stock Incentive Plan



69



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##### Table of Contents



INFORMATICA CORPORATION


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)






| |                                   
| | ----------------------------------
| | 2000 Employee Stock Incentive Plan





| |                     
| | --------------------
| | Assumed Option Plans



70



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##### Table of Contents



INFORMATICA CORPORATION


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




| |                           
| | --------------------------
| | Stock Option Plan Activity



|                                 |           |           |            |            |                |   |      |       | 
|-------------------------------- | --------- | --------- | ---------- | ---------- | -------------- | - | ---- | ----- | 
|                                 |           |           |            | Weighted-  |               
|                                 |           |           |            | Average    |               
|                                 |           | Number of |            |            | Exercise Price |  
|                                 |           | Shares    |            |            | per Share      |  
|                                 |           |           |            |            |                |  
|Outstanding at December 31, 2001 |           |           | 7,734,438  |            |                | $ | 7.96 |      
|                                 | Granted   |           |            | 11,848,462 |                |   |      | 7.58  | 
|                                 | Exercised |           |            | (1,591,321 | )              |   |      | 1.34  | 
|                                 | Canceled  |           |            | (3,074,259 | )              |   |      | 10.65 | 
|                                 |           |           |            |            |                |  
|Outstanding at December 31, 2002 |           |           | 14,917,320 |            |                |   | 7.81 |      
|                                 | Granted   |           |            | 4,368,235  |                |   |      | 6.59  | 
|                                 | Exercised |           |            | (1,532,320 | )              |   |      | 4.56  | 
|                                 | Canceled  |           |            | (2,168,112 | )              |   |      | 11.67 | 
|                                 |           |           |            |            |                |  
|Outstanding at December 31, 2003 |           |           | 15,585,123 |            |                |   | 7.26 |      
|                                 | Granted   |           |            | 7,901,756  |                |   |      | 6.97  | 
|                                 | Exercised |           |            | (2,392,359 | )              |   |      | 3.70  | 
|                                 | Canceled  |           |            | (3,209,083 | )              |   |      | 8.06  | 
|                                 |           |           |            |            |                |  
|Outstanding at December 31, 2004 |           |           | 17,885,437 |            |                | $ | 7.47 |      
|                                 |           |           |            |            |                |  



|                |                 |                     |        |                  |                     |         |           |                |           |  |  |           |                |  |           |  |           |  |  |   |       | 
|--------------- | --------------- | ------------------- | ------ | ---------------- | ------------------- | ------- | --------- | -------------- | --------- |  |  | --------- | -------------- |  | --------- |  | --------- |  |  | - | ----- | 
|                |                 | Options Outstanding |        |                  | Options Exercisable |        
|                |                 |                     |        |                  |                     |        
|                |                 |                     |        | Weighted Average |                     |         | Weighted- |                |           |  |  | Weighted- |               
|                |                 |                     |        | Remaining        |                     |         | Average   |                |           |  |  | Average   |               
|Range of        |                 |                     |        |                  | Contractual Life    |         |           | Exercise Price |           |  |  |           | Exercise Price | 
|Exercise Prices |                 |                     | Number |                  |                     | (Years) |           |                | per Share |  |  | Number    |                |  | per Share | 
|                |                 |                     |        |                  |                     |         |           |                |           |  |  |           |                |  |           | 
|                | $0.0625 - $4.40 |                     |        |                  | 1,475,567           |         |           |                | 5.20      |  |  | $         | 2.28           |  |           |  | 1,215,936 |  |  | $ | 2.10  | 
|                | $4.51 - $5.69   |                     |        |                  | 2,834,417           |         |           |                | 9.35      |  |  | $         | 5.64           |  |           |  | 71,839    |  |  | $ | 4.73  | 
|                | $5.72 - $6.56   |                     |        |                  | 1,295,591           |         |           |                | 6.86      |  |  | $         | 6.28           |  |           |  | 83,596    |  |  | $ | 6.37  | 
|                | $6.57 - $7.11   |                     |        |                  | 1,887,902           |         |           |                | 5.35      |  |  | $         | 6.65           |  |           |  | 923,534   |  |  | $ | 6.65  | 
|                | $7.13 - $7.66   |                     |        |                  | 2,781,183           |         |           |                | 6.28      |  |  | $         | 7.34           |  |           |  | 467,292   |  |  | $ | 7.32  | 
|                | $7.68 - $7.90   |                     |        |                  | 4,483,092           |         |           |                | 5.45      |  |  | $         | 7.90           |  |           |  | 4,269,120 |  |  | $ | 7.90  | 
|                | $7.91 - $9.14   |                     |        |                  | 1,595,751           |         |           |                | 6.91      |  |  | $         | 8.22           |  |           |  | 1,028,463 |  |  | $ | 8.15  | 
|                | $9.16 - $48.625 |                     |        |                  | 1,531,934           |         |           |                | 5.26      |  |  | $         | 16.06          |  |           |  | 1,012,115 |  |  | $ | 18.58 | 
|                |                 |                     |        |                  |                     |         |           |                |           |  |  |           |                |  |           | 
|                |                 |                     |        |                  | 17,885,437          |         |           |                | 6.38      |  |  | $         | 7.47           |  |           |  | 9,071,895 |  |  | $ | 8.15  | 
|                |                 |                     |        |                  |                     |         |           |                |           |  |  |           |                |  |           | 



71



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INFORMATICA CORPORATION


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)








|                           |                                |                         |       |       |      |   |     |      |  |   |     |     | 
|-------------------------- | ------------------------------ | ----------------------- | ----- | ----- | ---- | - | --- | ---- |  | - | --- | --- | 
|                           |                                | Year Ended December 31, |      
|                           |                                |                         |      
|                           |                                | 2004                    |       |       | 2003 |   |     | 2002 | 
|                           |                                |                         |       |       |      |   |     |      | 
|                           |                                | (In thousands)          |      
|Cost of service revenues   |                                | $                       | 48    |       |      | $ | 12  |      |  | $ | 4   |    
|Research and development   |                                |                         | 2,216 |       |      |   | 468 |      |  |   | 333 |    
|Sales and marketing        |                                |                         | 1,172 |       |      |   | 252 |      |  |   | 62  |    
|General and administrative |                                |                         | (78   | )     |      |   | 208 |      |  |   | 12  |    
|                           |                                |                         |       |       |      |   |     |      | 
|                           | Total stock-based compensation |                         | $     | 3,358 |      |   | $   | 940  |  |   | $   | 411 | 
|                           |                                |                         |       |       |      |   |     |      | 





| |                                  
| | ---------------------------------
| | 1999 Employee Stock Purchase Plan



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INFORMATICA CORPORATION


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




| |                              
| | -----------------------------
| | Stock Option Exchange Program





| |                          
| | -------------------------
| | Stockholders Rights Plan





| |                      
| | ---------------------
| | Stock Repurchase Plan







|   |                                       
|-- | --------------------------------------
|9. | Accumulated Other Comprehensive Income



|                                        |  |                |       |   |              |   |       | 
|--------------------------------------- |  | -------------- | ----- | - | ------------ | - | ----- | 
|                                        |  | December 31,   |       |   | December 31, |  
|                                        |  | 2004           |       |   | 2003         |  
|                                        |  |                |       |   |              |  
|                                        |  | (In thousands) |      
|Unrealized gain (loss) on investments   |  | $              | (645  | ) |              | $ | 152   | 
|Foreign currency translation adjustment |  |                | 2,420 |   |              |   | 1,634 | 
|                                        |  |                |       |   |              |  
|Accumulated other comprehensive income  |  | $              | 1,775 |   |              | $ | 1,786 | 
|                                        |  |                |       |   |              |  

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INFORMATICA CORPORATION


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|    |             
|--- | ------------
|10. | Income Taxes



|         |         |                         |        |     |      |   |       |       |  |   |     |     | 
|-------- | ------- | ----------------------- | ------ | --- | ---- | - | ----- | ----- |  | - | --- | --- | 
|         |         | Year Ended December 31, |       
|         |         |                         |       
|         |         | 2004                    |        |     | 2003 |   |       | 2002  | 
|         |         |                         |        |     |      |   |       |       | 
|         |         | (In thousands)          |       
|Current: |         |                         |        |     |      |   |       |       |  |   |     |    
|         | Federal |                         | $      | 211 |      |   | $     | 817   |  |   | $   |    | 
|         | State   |                         |        | 150 |      |   |       | 150   |  |   |     | 50  | 
|         | Foreign |                         |        | 859 |      |   |       | 1,157 |  |   |     | 871 | 
|         |         |                         |        |     |      |   |       |       | 
|         |         | $                       | $1,220 |     |      | $ | 2,124 |       |  | $ | 921 |    
|         |         |                         |        |     |      |   |       |       | 



|         |  |                         |          |   |      |   |         |      |  |   |         |  
|-------- |  | ----------------------- | -------- | - | ---- | - | ------- | ---- |  | - | ------- | -
|         |  | Year Ended December 31, |         
|         |  |                         |         
|         |  | 2004                    |          |   | 2003 |   |         | 2002 | 
|         |  |                         |          |   |      |   |         |      | 
|         |  | (In thousands)          |         
|Domestic |  | $                       | (94,384  | ) |      | $ | 24,905  |      |  | $ | (8,218  | )
|Foreign  |  |                         | (8,800   | ) |      |   | (15,471 | )    |  |   | (6,475  | )
|         |  |                         |          |   |      |   |         |      | 
|         |  | $                       | (103,184 | ) |      | $ | 9,434   |      |  | $ | (14,693 | )
|         |  |                         |          |   |      |   |         |      | 



|                                                                                 |  |                         |         |   |      |   |        |      |  |   |        |  
|-------------------------------------------------------------------------------- |  | ----------------------- | ------- | - | ---- | - | ------ | ---- |  | - | ------ | -
|                                                                                 |  | Year Ended December 31, |        
|                                                                                 |  |                         |        
|                                                                                 |  | 2004                    |         |   | 2003 |   |        | 2002 | 
|                                                                                 |  |                         |         |   |      |   |        |      | 
|                                                                                 |  | (In thousands)          |        
|Income tax provision (benefit) computed at federal statutory
    income tax rate |  | $                       | (36,114 | ) |      | $ | 3,302  |      |  | $ | (5,143 | )
|Federal alternative minimum tax                                                  |  |                         | 611     |   |      |   | 817    |      |  |   |       |  
|State taxes                                                                      |  |                         | 98      |   |      |   | 98     |      |  |   | 33     |  
|Foreign taxes                                                                    |  |                         | 859     |   |      |   | 1,157  |      |  |   | 871    |  
|Non-deductible purchased technology                                              |  |                         |        |   |      |   | 1,583  |      |  |   |       |  
|Amortization of deferred stock-based compensation and intangibles                |  |                         | 1,928   |   |      |   | 508    |      |  |   | 77     |  
|Other                                                                            |  |                         | (437    | ) |      |   | 293    |      |  |   | 222    |  
|Valuation allowance                                                              |  |                         | 34,275  |   |      |   | (5,634 | )    |  |   | 4,861  |  
|                                                                                 |  |                         |         |   |      |   |        |      | 
|                                                                                 |  | $                       | 1,220   |   |      | $ | 2,124  |      |  | $ | 921    |  
|                                                                                 |  |                         |         |   |      |   |        |      | 

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INFORMATICA CORPORATION


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                        |                                                     |                |          |        |      |   |         |        | 
|----------------------- | --------------------------------------------------- | -------------- | -------- | ------ | ---- | - | ------- | ------ | 
|                        |                                                     | December 31,   |         
|                        |                                                     |                |         
|                        |                                                     | 2004           |          |        | 2003 |  
|                        |                                                     |                |          |        |      |  
|                        |                                                     | (In thousands) |         
|Deferred tax assets:    |                                                     |                |          |        |      |   |         |       
|                        | Net operating loss carryforwards                    |                | $        | 23,278 |      |   | $       | 18,394 | 
|                        | Tax credit carryforwards                            |                |          | 11,291 |      |   |         | 10,687 | 
|                        | Deferred revenue                                    |                |          | 2,920  |      |   |         | 3,152  | 
|                        | Reserves and accrued costs not currently deductible |                |          | 3,691  |      |   |         | 7,254  | 
|                        | Depreciable assets                                  |                |          | 1,689  |      |   |         | 1,688  | 
|                        | Accrued restructuring costs                         |                |          | 53,908 |      |   |         | 7,170  | 
|                        | Amortization of intangibles                         |                |          | 341    |      |   |         | 292    | 
|                        | Capitalized research and development                |                |          | 3,133  |      |   |         | 1,947  | 
|                        | Other                                               |                |          | 204    |      |   |         |       | 
|                        |                                                     |                |          |        |      |  
|                        |                                                     |                | 100,455  |        |      |   | 50,584  |       
|Valuation allowance     |                                                     |                | (100,455 | )      |      |   | (50,584 | )     
|                        |                                                     |                |          |        |      |  
|Net deferred tax assets |                                                     | $              |         |        |      | $ |        |       
|                        |                                                     |                |          |        |      |  













|    |                      
|--- | ---------------------
|11. | Investment Impairment



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INFORMATICA CORPORATION


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




12.                 Employee
401(K) Plan






|    |                    
|--- | -------------------
|13. | Segment Information





|              |  |                         |         |  |      |   |         |      |  |   |         | 
|------------- |  | ----------------------- | ------- |  | ---- | - | ------- | ---- |  | - | ------- | 
|              |  | Year Ended December 31, |        
|              |  |                         |        
|              |  | 2004                    |         |  | 2003 |   |         | 2002 | 
|              |  |                         |         |  |      |   |         |      | 
|              |  | (In thousands)          |        
|North America |  | $                       | 156,565 |  |      | $ | 149,736 |      |  | $ | 145,178 | 
|Europe        |  |                         | 54,951  |  |      |   | 47,778  |      |  |   | 46,132  | 
|Other         |  |                         | 8,165   |  |      |   | 8,019   |      |  |   | 4,131   | 
|              |  |                         |         |  |      |   |         |      | 
|              |  | $                       | 219,681 |  |      | $ | 205,533 |      |  | $ | 195,441 | 
|              |  |                         |         |  |      |   |         |      | 



|    |                   
|--- | ------------------
|14. | Lawsuit Settlement



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INFORMATICA CORPORATION


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|    |                          
|--- | -------------------------
|15. | Related Party Transaction





|    |           
|--- | ----------
|16. | Litigation









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INFORMATICA CORPORATION


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)










|    |                  
|--- | -----------------
|17. | Subsequent Events

Sublease Agreement




Stock Repurchase
(unaudited)




78



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##### Table of Contents



INFORMATICA CORPORATION


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|    |                                                           
|--- | ----------------------------------------------------------
|18. | Selected Quarterly Consolidated Financial Data (Unaudited)

|                                                           |                   |                                       |        |        |          |   |        |               |  |   |              |        |   |   |         |        |  
|---------------------------------------------------------- | ----------------- | ------------------------------------- | ------ | ------ | -------- | - | ------ | ------------- |  | - | ------------ | ------ | - | - | ------- | ------ | -
|                                                           |                   | Three Months Ended                    |       
|                                                           |                   |                                       |       
|                                                           |                   | March 31,                             |        |        | June 30, |   |        | September 30, |  |   | December 31, |       
|                                                           |                   |                                       |        |        |          |   |        |               |  |   |              |       
|                                                           |                   | (In thousands, except per share data) |       
|2004:                                                      |                   |                                       |        |        |          |   |        |               |  |   |              |        |   |   |         |       
|Total revenues                                             |                   | $                                     | 54,173 |        |          | $ | 53,034 |               |  | $ | 52,428       |        |   | $ | 60,046  |       
|Gross profit(1)                                            |                   |                                       | 42,415 |        |          |   | 42,166 |               |  |   | 40,717       |        |   |   | 47,937  |       
|Restructuring charges                                      |                   |                                       |       |        |          |   |       |               |  |   | 9,673        |        |   |   | 102,963 |       
|Income (loss) from operations                              |                   |                                       | 1,549  |        |          |   | 895    |               |  |   | (9,866       | )      |   |   | (99,153 | )     
|Net income (loss)                                          |                   |                                       | 1,891  |        |          |   | 979    |               |  |   | (8,585       | )      |   |   | (98,689 | )     
|Net income (loss) per share:                               |                   |                                       |        |        |          |   |        |               |  |   |              |        |   |   |         |       
|                                                           | Basic and diluted |                                       | $      | 0.02   |          |   | $      | 0.01          |  |   | $            | (0.10  | ) |   | $       | (1.14  | )
|Shares used in calculation of net income (loss) per share: |                   |                                       |        |        |          |   |        |               |  |   |              |        |   |   |         |       
|                                                           | Basic             |                                       |        | 84,811 |          |   |        | 85,557        |  |   |              | 86,002 |   |   |         | 86,565 |  
|                                                           | Diluted           |                                       |        | 89,752 |          |   |        | 88,394        |  |   |              | 86,002 |   |   |         | 86,565 |  
|2003:                                                      |                   |                                       |        |        |          |   |        |               |  |   |              |        |   |   |         |       
|Total revenues                                             |                   | $                                     | 48,421 |        |          | $ | 50,619 |               |  | $ | 50,605       |        |   | $ | 55,888  |       
|Gross profit(1)                                            |                   |                                       | 38,337 |        |          |   | 40,188 |               |  |   | 39,804       |        |   |   | 44,178  |       
|Restructuring charges                                      |                   |                                       |       |        |          |   |       |               |  |   | 4,524        |        |   |   |        |       
|Income (loss) from operations                              |                   |                                       | 412    |        |          |   | 2,628  |               |  |   | (2,370       | )      |   |   | 1,705   |       
|Net income (loss)                                          |                   |                                       | 1,042  |        |          |   | 3,289  |               |  |   | (256         | )      |   |   | 3,235   |       
|Net income (loss) per share:                               |                   |                                       |        |        |          |   |        |               |  |   |              |        |   |   |         |       
|                                                           | Basic and diluted |                                       | $      | 0.01   |          |   | $      | 0.04          |  |   | $            | (0.00  | ) |   | $       | 0.04   |  
|Shares used in calculation of net income (loss) per share: |                   |                                       |        |        |          |   |        |               |  |   |              |        |   |   |         |       
|                                                           | Basic             |                                       |        | 80,530 |          |   |        | 80,143        |  |   |              | 80,380 |   |   |         | 83,889 |  
|                                                           | Diluted           |                                       |        | 83,159 |          |   |        | 82,777        |  |   |              | 80,380 |   |   |         | 89,594 |  






|    |                                                                                                                                                                                                                                                       
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Amortization of stock-based compensation has been reclassified
    for the quarterly periods ended March 31, 2004 and prior to
    cost of services revenue, research and development, sales and
    marketing and general and administrative expenses

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|        |                                                                                         
|------- | ----------------------------------------------------------------------------------------
|Item 9. | Changes in and Disagreements with Accountants on
    Accounting and Financial Disclosure






Item 9A. Control and Procedures


Evaluation of disclosure controls and
procedures.


Managements annual report on internal control
over financial reporting.


Changes in internal control over financial
reporting.








80



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##### Table of Contents





|         |                  
|-------- | -----------------
|Item 9B. | Other Information






PART III







|         |                                                   
|-------- | --------------------------------------------------
|Item 10. | Directors and Executive Officers of the Registrant



Code of Business Conduct












|         |                       
|-------- | ----------------------
|Item 11. | Executive Compensation








|         |                                                                   
|-------- | ------------------------------------------------------------------
|Item 12. | Security Ownership of Certain Beneficial Owners and
    Management








|         |                                               
|-------- | ----------------------------------------------
|Item 13. | Certain Relationships and Related Transactions








|         |                                       
|-------- | --------------------------------------
|Item 14. | Principal Accountant Fees and Services



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##### Table of Contents






PART IV







|         |                                           
|-------- | ------------------------------------------
|Item 15. | Exhibits and Financial Statement Schedules





| |                        
| | -----------------------
| | 1. Financial Statements



| |                                                                                                                                       
| | --------------------------------------------------------------------------------------------------------------------------------------
| | Reference is made to the Index to consolidated financial
    statements of Informatica Corporation under Item 8 of
    Part II hereof.



| |                                
| | -------------------------------
| | 2. Financial Statement Schedule



| |                                           
| | ------------------------------------------
| | The following schedule is included herein:



| |                                                                                                                                                                                                                               
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Valuation and Qualifying Accounts (Schedule II)                                                                                                                                                                               
|
| | All other schedules are omitted because they are not applicable
    or the amounts are immaterial or the required information is
    presented in the consolidated financial statements and notes
    thereto in Item 8 above.



| |            
| | -----------
| | 3. Exhibits



| |                                                                                  
| | ---------------------------------------------------------------------------------
| | See Exhibit Index immediately following the signature page
    of this Form 10-K.

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##### Table of Contents



INFORMATICA CORPORATION


SCHEDULE II  VALUATION AND QUALIFYING
ACCOUNTS


|                                |  |                |     |  |            |   |       |            |  |             |        |   |  |   |     | 
|------------------------------- |  | -------------- | --- |  | ---------- | - | ----- | ---------- |  | ----------- | ------ | - |  | - | --- | 
|                                |  | Balances at    |     |  | Charged to |   |       |            |  | Balances at |       
|                                |  | Beginning      |     |  | Costs and  |   |       |            |  | End of      |       
|                                |  | of Period      |     |  | Expenses   |   |       | Deductions |  |             | Period |  
|                                |  |                |     |  |            |   |       |            |  |             |        |  
|                                |  | (In thousands) |    
|Provision for Doubtful Accounts |  |                |     |  |            |   |       |            |  |             |        |   |  |   |     | 
|Year ended December 31, 2004    |  | $              | 564 |  |            | $ | 361   |            |  | $           | (114   | ) |  | $ | 811 | 
|Year ended December 31, 2003    |  | $              | 461 |  |            | $ | 145   |            |  | $           | (42    | ) |  | $ | 564 | 
|Year ended December 31, 2002    |  | $              | 425 |  |            | $ | 1,181 |            |  | $           | (1,145 | ) |  | $ | 461 | 

|                             |  |             |       |  |            |   |      |            |             |        |        |   |  |   |     | 
|---------------------------- |  | ----------- | ----- |  | ---------- | - | ---- | ---------- | ----------- | ------ | ------ | - |  | - | --- | 
|                             |  | Balances at |       |  |            |   |      |            | Balances at |       
|                             |  | Beginning   |       |  | Charged to |   |      |            |             | End of |       
|                             |  | of Period   |       |  | Revenue    |   |      | Deductions |             |        | Period |  
|                             |  |             |       |  |            |   |      |            |             |        |        |  
|Sales and Return Allowances  |  |             |       |  |            |   |      |            |             |        |        |   |  |   |     | 
|Year ended December 31, 2004 |  | $           | 705   |  |            | $ | (356 | )          |             | $      | (311   | ) |  | $ | 38  | 
|Year ended December 31, 2003 |  | $           | 888   |  |            | $ |     |            |             | $      | (183   | ) |  | $ | 705 | 
|Year ended December 31, 2002 |  | $           | 1,870 |  |            | $ | 425  |            |             | $      | (1,407 | ) |  | $ | 888 | 

83



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##### Table of Contents






SIGNATURES






| |                        
| | -----------------------
| | INFORMATICA CORPORATION



| |     |                  
| | --- | -----------------
| | By: | /s/ SOHAIB ABBASI

| |                                                
| | -----------------------------------------------
| |                                                
| | Sohaib Abbasi                                  
| | Chief Executive Officer, President and Director



|                                           |  |                                                                                                                   |  |               |  | 
|------------------------------------------ |  | ----------------------------------------------------------------------------------------------------------------- |  | ------------- |  | 
|Signature                                  |  | Title                                                                                                             |  | Date         
|                                           |  |                                                                                                                   |  |              
|                                          
|/s/ SOHAIB ABBASISohaib
    Abbasi         |  | Chief Executive Officer, President and Director (Principal
    Executive Officer)                                 |  | March 7, 2005
|                                          
|/s/ EARL E. FRYEarl
    E. Fry             |  | Chief Financial Officer, Executive Vice President, and Secretary
    (Principal Financial and Accounting Officer) |  | March 7, 2005
|                                          
|/s/ DAVID W. PIDWELLDavid
    W. Pidwell   |  | Director                                                                                                          |  | March 7, 2005
|                                          
|/s/ A. BROOKE SEAWELLA.
    Brooke Seawell |  | Director                                                                                                          |  | March 7, 2005
|                                          
|/s/ JANICE D. CHAFFINJanice
    D. Chaffin |  | Director                                                                                                          |  | March 7, 2005
|                                          
|/s/ MARK A. BERTELSENMark
    A. Bertelsen |  | Director                                                                                                          |  | March 7, 2005
|                                          
|/s/ CARL J. YANKOWSKICarl
    J. Yankowski |  | Director                                                                                                          |  | March 7, 2005

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##### Table of Contents



EXHIBIT INDEX


|        |    |      |          |                                                                                                                                                                                                                                                                                                 
|------- | -- | ---- | -------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |      |         
|Number  |    |      | Document
|        |    |      |         
|        | 2  | .1   |          | Agreement and Plan of Merger, dated September 11, 2003, by
    and among Informatica Corporation, a Delaware corporation,
    Stopwatch Acquisition Corporation, a Delaware corporation,
    Striva Corporation, a Delaware corporation, and Pete Sinclair as
    Stockholder Representative.(1)
|        | 2  | .2   |          | Amendment No. 1 to Agreement and Plan of Merger, dated
    September 22, 2003.(1)                                                                                                                                                                                                               
|        | 2  | .3   |          | Amendment No. 2 to Agreement and Plan of Merger, dated
    September 29, 2003.(1)                                                                                                                                                                                                               
|        | 3  | .1   |          | Amended and Restated Certificate of Incorporation of Informatica
    Corporation.(2)                                                                                                                                                                                                            
|        | 3  | .2   |          | Bylaws, as amended, of Informatica Corporation.(13)                                                                                                                                                                                                                                             
|        | 3  | .4   |          | Certificate of Amendment to the Companys Amended and
    Restated Certificate of Incorporation to increase the aggregate
    number of shares of the Companys common stock authorized
    for issuance from 100,000,000 to 200,000,000 shares.(3)                                             
|        | 3  | .5   |          | Certificate of Designation of the Rights, Preferences and
    Privileges of Series A Participating Preferred Stock of
    Informatica Corporation.(4)                                                                                                                                           
|        | 4  | .1   |          | Reference is made to Exhibits 3.1 and 3.2.                                                                                                                                                                                                                                                      
|        | 4  | .2   |          | Preferred Stock Rights Agreement, dated as of October 17,
    2001, between Informatica Corporation and American Stock
    Transfer & Trust Company.(4)                                                                                                                                         
|        | 10 | .1*  |          | Companys 2000 Employee Stock Incentive Plan, as amended.(5)                                                                                                                                                                                                                                    
|        | 10 | .6*  |          | Form of Indemnification Agreement between the Company and each
    of its executive officers and directors.(2)                                                                                                                                                                                  
|        | 10 | .10* |          | Companys 1996 Flexible Stock Incentive Plan, including
    forms of agreements thereunder.(6)                                                                                                                                                                                                  
|        | 10 | .11* |          | Companys 1999 Stock Incentive Plan, as amended.(7)                                                                                                                                                                                                                                             
|        | 10 | .12* |          | Companys 1999 Employee Stock Purchase Plan, as amended,
    including forms of agreements thereunder.(8)                                                                                                                                                                                       
|        | 10 | .13* |          | Companys 1999 Non-Employee Director Stock Incentive
    Plan.(2)                                                                                                                                                                                                                               
|        | 10 | .14  |          | Lease Agreement regarding Building 1 Lease, dated as of
    February 22, 2000, by and between the Company and Pacific
    Shores Center LLC.(9)                                                                                                                                                 
|        | 10 | .15  |          | Lease Agreement regarding Building 2 Lease, dated as of
    February 22, 2000, by and between the Company and Pacific
    Shores Center LLC.(9)                                                                                                                                                 
|        | 10 | .19* |          | Offer Letter, dated as of August 6, 2002, by and between
    the Company and Clive A. Harrison.(10)                                                                                                                                                                                             
|        | 10 | .20* |          | Description of management arrangement with Earl E. Fry.(10)                                                                                                                                                                                                                                     
|        | 10 | .21* |          | Amendment to 1999 Non-Employee Director Stock Incentive Plan.(11)                                                                                                                                                                                                                               
|        | 10 | .22* |          | Agreement on the Forgiveness of Employee Loan dated
    September 13, 2001, by and between the Company and Earl E.
    Fry.(12)                                                                                                                                                                 
|        | 10 | .23* |          | Separation Agreement and Release, dated January 30, 2004,
    by and between the Company and Sanjay Poonen.(13)                                                                                                                                                                                 
|        | 10 | .24* |          | Offer Letter, dated January 8, 2004, by and between the
    Company and Paul Albright.(13)                                                                                                                                                                                                      
|        | 10 | .25* |          | Separation Agreement and Release dated July 21, 2004 by and
    between Company and Gaurav S. Dhillon.(14)                                                                                                                                                                                      
|        | 10 | .26* |          | Employment Agreement dated July 19, 2004 by and between
    Company and Sohaib Abbasi.(14)                                                                                                                                                                                                      
|        | 10 | .27* |          | Offer Letter dated September 21, 2004, by and between the
    Company and John Entenmann.(15)                                                                                                                                                                                                   
|        | 10 | .28  |          | Lease Agreement dated as of October 7, 2004, by and between
    the Company and Seaport Plaza Associates, LLC.                                                                                                                                                                                  
|        | 10 | .29  |          | Form of Executive Severance Agreement dated November 15,
    2004 by and between the Company and each of John Entenmann, Earl
    E. Fry and Girish Pancha.                                                                                                                                     
|        | 10 | .30  |          | Separation Agreement and Release dated March 31, 2004 by
    and between the Company and Clive A. Harrison.                                                                                                                                                                                     
|        | 21 | .1   |          | List of Subsidiaries.                                                                                                                                                                                                                                                                           
|        | 23 | .2   |          | Consent of Independent Registered Public Accounting Firm.                                                                                                                                                                                                                                       



---



##### Table of Contents



|        |    |    |          |                                                                                                                                                                                       
|------- | -- | -- | -------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |    |         
|Number  |    |    | Document
|        |    |    |         
|        | 31 | .1 |          | Certification of Chief Executive Officer pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002.                                                                               
|        | 31 | .2 |          | Certification of Chief Financial Officer pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002.                                                                               
|        | 32 | .1 |          | Certification of Chief Executive Officer and Chief Financial
    Officer pursuant to 18 U.S.C. Section 1350, as adopted
    pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.






| |     |                                                                                                                                                                                                                                                         
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (1) | Incorporated by reference to the identically numbered exhibit to
    the Companys Registration Statement on Form 8-K filed
    with the Securities and Exchange Commission on October 7,
    2003.                                                     
|
| | (2) | Incorporated by reference to the identically numbered exhibit to
    Amendment No. 1 of the Companys Registration
    Statement on Form S-1 (Commission File No. 333-72677)
    filed with the Securities and Exchange Commission on
    April 8, 1999.
|
| | (3) | Incorporated by reference to the identically numbered exhibit to
    the Companys Quarterly Report on Form 10-Q filed with
    the Securities and Exchange Commission on August 14, 2000.                                                              
|
| | (4) | Incorporated by reference to the identically numbered exhibit to
    the Companys Registration Statement on Form 8-A filed
    with the Securities and Exchange Commission on November 6,
    2001.                                                    
|
| | (5) | Incorporated by reference to the identically numbered exhibit to
    the Companys Quarterly Report on Form 10-Q filed with
    the Securities and Exchange Commission on August 8, 2001.                                                               
|
| | (6) | Incorporated by reference to the identically numbered exhibit to
    the Companys Registration Statement on Form S-1
    (Commission File No. 333-72677) filed with the Securities
    and Exchange Commission on February 19, 1999.                   
|
| | (7) | Incorporated by reference to exhibit 4.3 to the
    Companys Registration Statement on Form S-8 filed
    with the Securities and Exchange Commission on August 3,
    2001.                                                                           
|
| | (8) | Incorporated by reference to exhibit 4.4 to the
    Companys Registration Statement on Form S-8 filed
    with the Securities and Exchange Commission on August 3,
    2001.                                                                           
|
| | (9) | Incorporated by reference to the identically numbered exhibit to
    the Annual Report on Form 10-K filed with the Securities
    and Exchange Commission on March 30, 2000.                                                                            



|     |                                                                                                                                                                                                     
|---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(10) | Incorporated by reference to the identically numbered exhibit to
    the Companys Quarterly Report on Form 10-Q filed with
    the Securities and Exchange Commission on November 13, 2002.        
|    
|(11) | Incorporated by reference to the identically numbered exhibit to
    the Companys Quarterly Report on Form 10-Q filed with
    the Securities and Exchange Commission on August 7, 2003.           
|    
|(12) | Incorporated by reference to Exhibit 99.1 to Amendment
    No. 1 of the Companys Registration Statement on
    Form S-3 filed with the Securities and Exchange Commission
    on December 24, 2003.
|    
|(13) | Incorporated by reference to the identically numbered exhibit of
    the Companys Annual Report on Form 10-K filed with
    the Securities and Exchange Commission on March 12, 2004.              
|    
|(14) | Incorporated by reference to the identically numbered exhibit of
    the Companys Quarterly Report on Form 10-Q filed with
    the Securities and Exchange Commission on August 5, 2004.           
|    
|(15) | Incorporated by reference to the identically numbered exhibit of
    the Companys Quarterly Report on Form 10-Q filed with
    the Securities and Exchange Commission on November 5, 2004.         






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