© 2005 Wind River Daily Revenue Recognition Solution Kuldeep Tanwar Manager Business Applications Wind River Systems, Inc January 17 th 2007

© 2005 Wind River 2 Wind River: Device Software Optimization Wind River enables companies to develop and run device software faster, better, at lower cost, and more reliably.

© 2005 Wind River 3 Wind River Leading the DSO Industry DSO Leader Technology Leader Market Leader Established in 1983 Public company (1.4B market cap) #1 market share (40%) #1 revenues ($266M FY06) 1st connected RTOS 1st IDE 1st device software develop- and-run platforms 1st industry-specific services practices 40,000 users 300M deployed devices Global operations, services, and support #1 DSO solution

© 2005 Wind River 4 Wind River’s Customer’s Our customers make differentiated devices by focusing on intelligent, connected device software.

© 2005 Wind River 5 Wind River’s Applications Footprint Finance & HR General Ledger Accounts Payables Accounts Receivables Cash Management Fixed Assets Collections Purchasing Customers Online Human Resources Learning Mgmt Systems iLearning 3 rd party Bolt-ons Marketing & Sales Siebel Accounts Siebel Contacts Siebel Opportunities Siebel Quotes Siebel Campaign Customers Online Security & Monitoring 10G Grid OID – Single Sign On Order Management Accounts Receivables Advanced Pricing Plan to Fulfill MRP Inventory Item/BOM WIP Services TeleService iSupport Service Contracts Install Base Project Mgmt Project Resource Mgmt Time & Labor iExpense Project Accounting Project Billing Business Intelligence 6i Reports Drake – Rich EULs Portal – BI Dashboards

© 2005 Wind River Daily Revenue Recognition Solution Overview

© 2005 Wind River 7 Business Issue Wind River has subscription and maintenance contracts of variable lengths Lack of flexibility in Oracle variable accounting led to incorrect system revenue recognition for most ratable contracts Large contracts adjusted by individual manual journal entry Smaller contracts adjusted by “convention journal” Entire process subject to higher level of risk due to the amount of manual processing Added complexity to revenue close and to revenue and deferred revenue reconciliations

© 2005 Wind River 8 Scope Enabling daily revenue recognition calculation for all operating units. Manual revenue calculations using spreadsheets and manual journal entries will be discontinued resulting in lower cost, productivity gains and risk reduction. Business Units: Wind River Worldwide Finance –Americas (US, Canada) –EMEA (UK, France, Germany, Italy, Sweden, Netherlands, Israel) –Asia Pacific (China, India, Korea, Singapore, Taiwan) –Japan

© 2005 Wind River 9 Legacy Manual Process 4. Rev Rec 5. GL Interface 7. Import from GL Interface 6. GL Interface Table 8.1 Cal Rev Adj 8.3 Enter Adjustments in ADI 8.4 Import Journals 8.5 Post Journals BAU 8.2 WR Rev Adj 3. Auto Invoice 2. Pre Auto Invoice 1. AR Interface Table Red boxes indicate manual process

© 2005 Wind River 10 No re-work Required New Process 4. Rev Rec 5. GL Interface 7. Import from GL Interface 6. GL Interface Table 8.1 Cal Rev Adj 8.3 Enter Adjustments in ADI 8.4 Import Journals 8.5 Post Journals BAU 8.2 WR Rev Adj 3. Auto Invoice 2. Pre Auto Invoice (Add module to insert new rules & Update RA Interface Table 1. AR Interface Table Red boxes indicate manual process

© 2005 Wind River 11 Approach Order is booked & shipped with accounting rule “WRS Variable” Before Auto Invoice runs, a bolt on module will update the “WRS Variable” with a new rule based on the beginning and end dates of the service agreement and the length of the agreement. These new accounting rules have been created in the system as part of the solution deployment. Next steps are Business As Usual (BAU), i.e. Run Auto Invoice, Revenue Recognition, GL Transfer … Above approach is applicable for invoices created after go-live from OM and SC Modules. All old invoices (i.e. created before go live) will continue to use the “WRS Variable” accounting rule. Current biz process will be followed for old invoices.

© 2005 Wind River 12 What are the New Accounting Rules? Start DateEnd DateCommentsNew Rule Name 10-Jan July-2006There are Seven Month Periods First month Prorated for 20 days Last Month prorated for 3 days and 5 months in between prorated for 30 days each D10-5-D3 18-Jan Nov-2006There are Eleven Month Periods First month Prorated for 12 days Last Month prorated for 10 days and 9 months in between prorated for 30 days each D18-9-D10 25-Jan July-2007There are 19 Month Periods First month Prorated for 5 days Last Month prorated for 25 days and 17 months in between prorated for 30 days each D25-17-D25 Accounting Rule Type: ’Accounting, Fixed Duration’ Accounting period type: Month Average Month Days : 30

© 2005 Wind River 13 Realized Business Benefits Plug and play solution Improved accuracy of revenue - achieved objective of daily calculation convention Reduced complexity in close process and resulting in a faster close Correct accounting distribution is visible in A/R Did not increase the number accounting distribution lines in A/R and G/L No additional manual G/L entries were required Improved the reconciliation process Leveraged existing reporting structure without having to make any changes to reports Easy to test and audit – beauty in the solution’s simplicity Approved by our auditors No impact of upgrades on solution

© 2005 Wind River WIN Wind River, the global leader in device software optimization (DSO), enables companies to develop and run software faster, better, at lower cost, and more reliably.

© 2005 Wind River 15 Backup slide - Pros and Cons PROS: –Will utilize the Standard Oracle functionality with minimal customization –Revenue distributions will be visible thru AR. –No journal or GL adjustments will be required. –Solution is upgradeable and supportable. –Solution will not increase the number of lines in AR or in GL. –Extension will be written as in a manner to easily facilitate decommissioning at a later date. –Little to no user intervention in creating and maintaining the rules. –Minimizes re-work to replicate additional reporting. –Will run automatically prior to Auto Invoice, so there will be no timing differences in AR. –“ Oracle ” Team liked this approach over other approaches (because it was non- invasive). CONS: –Daily “ rules ” will be created and maintained behind the scenes so there will be no visibility thru applications. – System will have to generate accounting rules and populate the accounting rules tables (non standard), 60K rules will be created