STORAGE

Cognos Incorporated, the world leader in business intelligence (BI) and corporate performance management solutions, today announced record results for the Company's fourth quarter and full fiscal year 2004, ended February 29, 2004. Revenue for the quarter was $202.1 million, an increase of 23 percent from the fourth quarter of last year, when revenue was $163.7 million. Net income for the fourth quarter of fiscal 2004 was $46.1 million, resulting in diluted earnings per share of $0.50. This was 56 percent higher than in the fourth quarter of the prior fiscal year, when net income was $29.6 million and diluted earnings per share were $0.33. Net income was favorably impacted in the quarter by an improvement in the tax rate from 25 percent to 16 percent for fiscal 2004, resulting from the completion of tax audits that reduced overall tax exposure for the corporation. Net income in the quarter was reduced by a one-time, pre-tax cost of $1.75 million related to a patent litigation settlement. Excluding the favorable change in tax rate and the one-time cost, pro forma diluted earnings per share in the quarter were $0.39. Revenue for the full fiscal year 2004 was $683.1 million, an increase of 24 percent compared with revenue of $551.0 million for the previous year. Net income for fiscal 2004 was $100.9 million, and diluted earnings per share were $1.10. This compares with the prior year's net income of $73.1 million, or $0.81 per share. Excluding the favorable change in tax rate and the one-time cost, pro forma diluted earnings per share in fiscal 2004 were $0.99. Cognos ReportNet(TM) continued its strong momentum, driving revenue growth in the quarter. BI revenue reached $195.1 million, an increase of 26 percent from $155.3 million in the fourth quarter of last year. Total license revenue increased 18 percent to $93.5 million, compared to $79.6 million in the same period last year. Highlights of the Quarter * $30 million of license revenue for Cognos ReportNet in the fourth quarter alone * Over 1,000 ReportNet transactions in the quarter from leading organizations such as AT&T, Fiducia, Georgia Pacific Corporation, Lockheed Martin, Raytheon, Ricoh, Sun Chemical, Telus Communications, Trillium Health Centre, and the U.S. Army * Introduction of Cognos ReportNet 1.1 delivers tight integration with PowerPlay(R) and drives continued strong momentum and positive customer response for this clear leader in industrial-strength enterprise reporting * Breakout quarter for Cognos Enterprise Planning (EP), doubling license revenue from Q3 level and driving 24 percent overall EP revenue growth for the full year * Introduction of Cognos Enterprise Planning 7.2 provides high level of integration with the full Cognos product family and extends the richness of the Cognos corporate performance management solution * 13 contracts greater than $1 million, an all-time high for the Company; 37 contracts greater than $1 million for the full fiscal year 2004 * The Company's balance sheet remains strong. Cash flow from operations was $80.5 million. As a result, the Company exited the quarter with $388.2 million in cash, cash equivalents, and short-term investments. "We are extremely pleased with the results for the fourth quarter and the full year," said Cognos Chief Executive Officer Ron Zambonini. "It was rock solid by every objective measure. Cognos employees are executing flawlessly, driving our competitive success. ReportNet is on fire. Our product portfolio -- powered by unmatched innovation -- is the strongest in the industry, and getting stronger. "The outlook and opportunities for Cognos are excellent. Through fiscal 2004 we extended our leadership position in business intelligence and corporate performance management. We enter fiscal 2005 with superior momentum. Company fundamentals and our competitive position have never been better. "I am proud of the hard work and dedication of the Cognos team and their accomplishments last year, and throughout my tenure with the Company, and I thank them sincerely for their unswerving commitment to the success of Cognos." Business Outlook Management offers the following outlook for the first quarter of fiscal 2005, ending May 31, 2004: * Revenue is expected to be in the range of $169 million to $171 million; * Diluted earnings per share are expected to be in the range of $0.19 to $0.20. For the full fiscal year 2005 management expects revenue to be around $770 million and diluted earnings per share to be around $1.18, assuming a tax rate of 21 percent in fiscal year 2005.