Retalix (RTLX)

Financial Income (Expenses), Net

         Financial income (expenses), net, totaled approximately $2.0 million of expenses in 2008, compared to approximately $1.0 million of income in 2007, and $79,000 of income in 2006. During 2008, we recorded higher non-dollar currency losses, higher forward contract net losses and a loss on our auction rate security, offset by higher interest income compared to 2007, in spite of lower interest rates, due to an increase in our cash reserves. During 2007, we recorded higher non-dollar currency gains compared to 2006, in spite of lower interest income and higher interest and bank commission expense.

54

Financial Income (Expenses), Net

        Financial income, net, totaled $79,000 in 2006, compared to $202,000 in 2005 and $85,000 in 2004. During 2005 we enjoyed higher average financial reserves which contributed to higher interest income compared to 2006, in spite of higher non-dollar currency losses and higher costs related to sales of receivables in 2005. In 2004, significantly lower interest rates and thus yields on our financial reserves were the main contributor to lower interest income, compared to 2005, in spite of significantly lower costs related to sales of receivables in 2004.

Financial Income (Expenses), Net

          Financial income (expenses), net, totaled income of $202,000 in 2005 compared to income of $85,000 in 2004, and expenses of $95,000 in 2003. The net income in 2004 and 2005 resulted primarily from interest earned on deposits and securities, net of financial expenses incurred on bank loans, expenses resulting from sale of receivables and other bank charges. The net expense in 2003 resulted primarily from financial expenses incurred on bank loans used to finance acquisitions.

51

Financial Income (Expenses), Net

          Financial income (expenses), net, consists primarily of interest earned on bank deposits and securities, interest paid on loans, credit from banks, expenses resulting from sale of receivables and losses or gains from the conversion into dollars of monetary balance sheet items denominated in non-dollar currencies.

Financial Income (Expenses), Net

        Financial income (expenses), net, consists primarily of interest earned on bank deposits and securities, interest paid on loans, credit from banks, expenses resulting from sale of receivables and losses or gains from the conversion into dollars of monetary balance sheet items denominated in non-dollar currencies.