Riverbed Technology (RVBD)

General and Administrative Expenses

General and administrative expenses consist primarily of compensation for personnel and facilities costs related to our executive, finance, human resources, information technology and legal organizations, and fees for professional services. Professional services include legal, audit and information technology consulting costs.

Quarter Ended March 31, 2009 Compared to the Quarter Ended March 31, 2008: General and administrative expenses decreased by $0.4 million, or 4%, in the three months ended March 31, 2009 compared to the three months ended March 31, 2008 due to a decrease in legal fees incurred to defend intellectual property (IP) litigation that was settled in the third quarter of 2008, offset by an increase in personnel costs, primarily as a result of headcount increasing to 105 employees as of March 31, 2009 from 87 employees as of March 31, 2008. Of the $0.4 million decrease in general and administrative expenses, salaries, bonuses and related benefits increased $0.8 million whereas professional service fees decreased $1.7 million. Professional service fees decreased primarily due to decreased legal fees associated with IP litigation. Legal fees associated with the IP litigation were $0.9 million in the quarter ended March 31, 2008 but no significant fees were incurred in the quarter ended March 31, 2009. Stock-based compensation, which was $2.5 million in the three months ended March 31, 2009 compared to $1.9 million in the three months ended March 31, 2008, accounted for $0.6 million of the offsetting increase in general and administrative expenses.

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General and Administrative Expenses

General and administrative expenses consist primarily of compensation for personnel and facilities costs related to our executive, finance, human resources, information technology and legal organizations, and fees for professional services. Professional services include outside legal, audit and information technology consulting costs.

2008 Compared to 2007:    The increase in general and administrative expenses for the year ended December 31, 2008 compared to the year ended December 31, 2007 is due to an increase in personnel costs, primarily as a result of headcount increasing to 98 employees as of December 31, 2008 from 83 employees as of December 31, 2007, and an increase in professional services fees. Salaries, bonuses and related benefits accounted for $3.2 million and professional service fees accounted for approximately $5.0 million of the $13.8 million increase in general and administrative expenses. Professional service fees increased primarily due to increased intellectual property (IP) related legal fees associated with IP litigation. Legal fees associated with the IP litigation were $4.1 million in the year ended December 31, 2008 compared to zero in the year ended December 31, 2007. Legal fees are expected to decrease now that the IP litigation is resolved. Stock-based compensation, which was $9.2 million in the year ended December 31, 2008 compared to $5.4 million in the year ended December 31, 2007, accounted for approximately $3.8 million of the increase in general and administrative expenses.

2007 Compared to 2006:    The increase in general and administrative expenses for the year ended December 31, 2007 compared to the year ended December 31, 2006 is due to an increase in personnel costs, primarily as a result of headcount increasing to 83 employees as of December 31, 2007 from 32 employees as of December 31, 2006, and an increase in professional services fees. Salaries and bonuses accounted for $2.7 million and professional service fees accounted for approximately $6.1 million of the $15.5 million increase in general and administrative expenses. Professional service fees increased due to increased Sarbanes-Oxley compliance fees, contract labor, information technology consulting fees and audit and tax advisory fees. Stock-based compensation, which was $5.4 million in the year ended December 31, 2007 compared to $1.5 million in the year ended December 31, 2006, accounted for approximately $3.9 million of the increase in general and administrative expenses.

General and Administrative Expenses

General and Administrative Expenses

General and administrative expenses consist primarily of compensation for personnel and facilities costs related to our executive, finance, human resources, information technology and legal organizations, and fees for professional services. Professional services include legal, audit and information technology consulting costs.

Quarter Ended September 30, 2008 Compared to the Quarter Ended September 30, 2007: The increase in general and administrative expenses for the three months ended September 30, 2008 compared to the three months ended September 30, 2007 is due to an increase in personnel costs, primarily as a result of headcount increasing to 95 employees as of September 30, 2008 from 69 employees as of September 30, 2007, and an increase in professional services fees. Salaries, bonuses and related benefits accounted for $629,000 and professional service fees accounted for approximately $1.6 million of the $3.2 million increase in general and administrative expenses. Professional service fees increased primarily due to increased intellectual property (IP) related legal fees associated with IP litigation. Legal fees associated with the IP litigation were $2.0 million in the quarter ended September 30, 2008. Legal fees are expected to decrease now that the IP litigation is resolved. Stock-based compensation, which was $2.5 million in the three months ended September 30, 2008 compared to $1.6 million in the three months ended September 30, 2007, accounted for approximately $948,000 of the increase in general and administrative expenses.

Nine Months Ended September 30, 2008 Compared to the Nine Months Ended September 30, 2007: The increase in general and administrative expenses for the nine months ended September 30, 2008 compared to the nine months ended September 30, 2007 is due to an increase in personnel costs and professional services fees. Salaries, bonuses and related benefits accounted for $2.7 million and professional service fees accounted for approximately $5.4 million of the $13.1 million increase in general and administrative expenses. Professional service fees increased due to increased audit and tax advisory fees, information technology consulting fees and increased legal fees. Legal fees associated with IP litigation were $4.3 million in the nine months ended September 30, 2008. Stock-based compensation, which was $6.8 million in the nine months ended September 30, 2008 compared to $3.6 million in the nine months ended September 30, 2007, accounted for approximately $3.2 million of the increase in general and administrative expenses.

General and Administrative Expenses

General and administrative expenses consist primarily of compensation for personnel and facilities costs related to our executive, finance, human resources, information technology and legal organizations, and fees for professional services. Professional services include legal, audit and information technology consulting costs.

Quarter Ended June 30, 2008 Compared to the Quarter Ended June 30, 2007: The increase in general and administrative expenses for the three months ended June 30, 2008 compared to the three months ended June 30, 2007 is due to an increase in personnel costs, primarily as a result of headcount increasing to 88 employees as of June 30, 2008 from 49 employees as of June 30, 2007, and an increase in professional services fees. Salaries and bonuses accounted for $867,000 and professional service fees accounted for approximately $1.7 million of the $4.5 million increase in general and administrative expenses. Professional service fees increased primarily due to increased intellectual property related legal fees associated with IP litigation in the amount of $1.4 million. We expect legal fees to continue to be significant until the IP litigation is resolved. Stock-based compensation, which was $2.4 million in the three months ended June 30, 2008 compared to $1.3 million in the three months ended June 30, 2007, accounted for approximately $1.1 million of the increase in general and administrative expenses.

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Six Months Ended June 30, 2008 Compared to the Six Months Ended June 30, 2007: The increase in general and administrative expenses for the six months ended June 30, 2008 compared to the six months ended June 30, 2007 is due to an increase in personnel costs and professional services fees. Salaries and bonuses accounted for $1.8 million and professional service fees accounted for approximately $3.8 million of the $9.9 million increase in general and administrative expenses. Professional service fees increased due to increased audit and tax advisory fees, information technology consulting fees and increased legal fees, including intellectual property related legal fees associated with IP litigation in the amount of $2.3 million. Stock-based compensation, which was $4.3 million in the six months ended June 30, 2008 compared to $2.1 million in the six months ended June 30, 2007, accounted for approximately $2.2 million of the increase in general and administrative expenses.

General and Administrative Expenses

General and administrative expenses consist primarily of compensation for personnel and facilities costs related to our executive, finance, human resources, information technology and legal organizations, and fees for professional services. Professional services include legal, audit and information technology consulting costs.

Quarter Ended March 31, 2008 Compared to the Quarter Ended March 31, 2007: The increase in general and administrative expenses for the three months ended March 31, 2008 compared to the three months ended March 31, 2007 is due to an increase in personnel costs, primarily as a result of headcount increasing to 87 employees as of March 31, 2008 from 42 employees as of March 31, 2007, and an increase in professional services fees. Salaries and bonuses accounted for $940,000 and professional service fees accounted for approximately $2.1 million of the $5.3 million increase in general and administrative expenses. Professional service fees increased due to increased audit and tax advisory fees and increased intellectual property related

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legal fees associated with IP litigation in the amount of $940,000. Stock-based compensation, which was $1.9 million in the three months ended March 31, 2008 compared to $798,000 in the three months ended March 31, 2007, accounted for approximately $1.1 million of the increase in general and administrative expenses.

General and Administrative Expenses

General and administrative expenses consist primarily of compensation for personnel and facilities costs related to our executive, finance, human resources, information technology and legal organizations, and fees for professional services. Professional services include outside legal, audit and information technology consulting costs.

2007 Compared to 2006:     The increase in general and administrative expenses for the year ended December 31, 2007 compared to the year ended December 31, 2006 is due to an increase in personnel costs, primarily as a result of headcount increasing to 83 employees as of December 31, 2007 from 32 employees as of December 31, 2006, and an increase in professional services fees. Salaries and bonuses accounted for $2.7 million and professional service fees accounted for approximately $6.1 million of the $15.5 million increase in general and administrative expenses. Professional service fees increased due to increased Sarbanes-Oxley compliance fees, contract labor, information technology consulting fees and audit and tax advisory fees. Stock-based compensation,

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which was $5.4 million in the year ended December 31, 2007 compared to $1.5 million in the year ended December 31, 2006, accounted for approximately $3.9 million of the increase in general and administrative expenses.

2006 Compared to 2005:    The increase in general and administrative expenses for the year ended December 31, 2006 compared to the year ended December 31, 2005 is due to an increase in personnel costs, primarily as a result of headcount increasing to 32 employees as of December 31, 2006 from 16 employees as of December 31, 2005, and an increase in professional services fees. Salaries accounted for $1.8 million and professional service fees accounted for $1.7 million of the $5.8 million increase in general and administrative expenses. The additional personnel and professional services fees were primarily to address the legal, finance, human resources, recruiting and information technology functions required of a public company. Stock-based compensation, which was $1.5 million in the year ended December 31, 2006 compared to $368,000 in the year ended December 31, 2005, accounted for approximately $1.2 million of the increase in general and administrative expenses.

General and Administrative Expenses

General and administrative expenses consist primarily of compensation for personnel and facilities costs related to our executive, finance, human resources, information technology and legal organizations, and fees for professional services. Professional services include legal, audit and information technology consulting costs.

Quarter Ended September 30, 2007 Compared to the Quarter Ended September 30, 2006: The increase in general and administrative expenses for the three months ended September 30, 2007 compared to the three months ended September 30, 2006 is due to an increase in personnel costs, primarily as a result of headcount increasing to 69 employees as of September 30, 2007 from 29 employees as of September 30, 2006, and an increase in professional services fees. Salaries and bonuses accounted for $700,000 and professional service fees accounted for approximately $1.9 million of the $4.8 million increase in general and administrative expenses. Professional service fees increased due to increased Sarbanes-Oxley compliance fees, contract labor, information technology consulting fees and audit fees. Stock-based compensation, which was $1.6 million in the three months ended September 30, 2007 compared to $381,000 in the three months ended September 30, 2006, accounted for approximately $1.2 million of the increase in general and administrative expenses.

Nine Months Ended September 30, 2007 Compared to the Nine Months Ended September 30, 2006: The increase in general and administrative expenses for the nine months ended September 30, 2007 compared to the nine months ended September 30, 2006 is due to an increase in personnel costs and an increase in professional services fees. Salaries and bonuses accounted for $1.7 million and professional service fees accounted for approximately $4.4 million of the $10.8 million increase in general and administrative expenses. Professional service fees increased due to increased Sarbanes-Oxley compliance fees, contract labor, information technology consulting fees and audit fees. Stock-based compensation, which was $3.6 million in the nine months ended September 30, 2007 compared to $867,000 in the nine months ended September 30, 2006, accounted for approximately $2.7 million of the increase in general and administrative expenses.

General and Administrative Expenses

General and administrative expenses consist primarily of compensation for personnel and facilities costs related to our executive, finance, human resources, information technology and legal organizations, and fees for professional services. Professional services include legal, audit and information technology consulting costs.

Quarter Ended June 30, 2007 Compared to the Quarter Ended June 30, 2006: The increase in general and administrative expenses for the three months ended June 30, 2007 compared to the three months ended June 30, 2006 is due to an increase in personnel costs, primarily as a result of headcount increasing to 49 employees as of June 30, 2007 from 25 employees as of June 30, 2006, and an increase in professional services fees. Salaries and bonuses accounted for $806,000 and professional service fees accounted for approximately $1.2 million of the $3.5 million increase in general and administrative expenses. Stock-based compensation, which was $1.3 million in the three months ended June 30, 2007 compared to $311,000 in the three months ended June 30, 2006, accounted for approximately $940,000 of the increase in general and administrative expenses.

Six Months Ended June 30, 2007 Compared to the Six Months Ended June 30, 2006: The increase in general and administrative expenses for the six months ended June 30, 2007 compared to the six months ended June 30, 2006 is due to an increase in personnel costs and an increase in professional services fees. Salaries and bonuses accounted for $1.5 million and professional service fees accounted for approximately $1.8 million of the $6.0 million increase in general and administrative expenses. Stock-based compensation, which was $2.1 million in the six months ended June 30, 2007 compared to $486,000 in the six months ended June 30, 2006, accounted for approximately $1.6 million of the increase in general and administrative expenses.

General and Administrative Expenses

General and administrative expenses consist primarily of compensation and related costs for personnel and facilities related to our executive, finance, human resources, information technology and legal organizations, and fees for professional services. Professional services include legal, audit and information technology consulting costs.

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Quarter Ended March 31, 2007 Compared to the Quarter Ended March 31, 2006: The increase in general and administrative expenses for the three months ended March 31, 2007 compared to the three months ended March 31, 2006 is due to an increase in personnel costs, primarily as a result of headcount increasing to 42 employees as of March 31, 2007 from 19 employees as of March 31, 2006, and an increase in professional services fees. Salaries and bonuses accounted for $733,000 and professional service fees accounted for approximately $810,000 of the $2.4 million increase in general and administrative expenses. Additionally accounting, audit and Sarbanes-Oxley fees have increased compared to the corresponding prior year period. Stock-based compensation, which was $798,000 in the three months ended March 31, 2007 compared to $175,000 in the three months ended March 31, 2006, accounted for approximately $623,000 of the increase in general and administrative expenses.

General and Administrative Expenses

General and administrative expenses consist primarily of compensation and related costs for personnel and facilities related to our executive, finance, human resources, information technology and legal organizations, and fees for professional services. Professional services include legal, audit and information technology consulting costs.

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2006 Compared to 2005:    The increase in general and administrative expenses for the year ended December 31, 2006 compared to the year ended December 31, 2005 is due to an increase in personnel costs, primarily as a result of headcount increasing to 32 employees as of December 31, 2006 from 16 employees as of December 31, 2005, and an increase in professional services fees. Salaries accounted for $1.8 million and professional service fees accounted for $1.7 million of the $5.8 million increase in general and administrative expenses. The additional personnel and professional services fees are primarily to address the legal, finance, human resources, recruiting and information technology functions required of a newly public company. Stock-based compensation, which was $1.5 million in the year ended December 31, 2006 compared to $368,000 in the year ended December 31, 2005, accounted for approximately $1.2 million of the increase in general and administrative expenses. We expect to spend more money on general and administrative expenses as we plan to hire additional personnel and incur costs for the implementation of new infrastructure technology systems. In 2007, we will also incur significant costs related to public company compliance requirements.

2005 Compared to 2004:    The increase in general and administrative expenses from 2004 to 2005 is due to an increase in personnel costs, primarily as a result of a headcount increase to 16 employees as of December 31, 2005 from 5 employees as of December 31, 2004, and an increase in professional services fees. Salaries accounted for $690,000 and professional service fees accounted for $502,000 of the $2.5 million increase in general and administrative expenses. The additional personnel and professional services fees are primarily the result of our on-going efforts to build the legal, finance, human resources, recruiting and information technology functions required of a growing company. Stock-based compensation, which was $368,000 in 2005 compared to $1,000 in 2004, accounted for $367,000 of the increase in general and administrative expenses.

General and Administrative Expenses

General and administrative expenses consist primarily of compensation and related costs for personnel and facilities related to our executive, finance, human resources, information technology and legal organizations, and fees for professional services. Professional services include outside legal, audit and information technology consulting costs.

Quarter Ended September 30, 2006 Compared to the Quarter Ended September 30, 2005: The increase in general and administrative expenses in the quarter ended September 30, 2006 compared to the quarter ended September 30, 2005 is due to an increase in personnel costs, primarily as a result of a headcount increase to 29 employees at September 30, 2006 from 10 employees at September 30, 2005, and an increase in professional services fees. Salaries accounted for $524,000 and professional service fees accounted for $374,000 of the $1.4 million increase in general and administrative expenses. The additional personnel and professional services fees are primarily the result of our ongoing efforts to build the legal, finance, human resources, recruiting and information technology functions required of a public company. Stock-based compensation, which was $381,000 in the quarter ended September 30, 2006 compared to $132,000 in the quarter ended September 30, 2005, accounted for $249,000 of the increase in general and administrative expenses. We expect to incur significant additional expenses as a result of operating as a public company, including costs to comply with the Sarbanes-Oxley Act and the rules and regulations applicable to companies listed on the Nasdaq Stock Market’s Global Market.

Nine Months Ended September 30, 2006 Compared to the Nine Months Ended September 30, 2005: The increase in general and administrative expenses for the nine months ended September 30, 2006 compared to the nine months ended September 30, 2005 is due to an increase in personnel costs, primarily as a result of average headcount increasing to 24 employees during the nine months ended September 30, 2006 from 8 employees during the nine months ended September 30, 2005, and an increase in professional services fees. Salaries accounted for $1.3 million and professional service fees accounted for $874,000 of the $3.9 million increase in general and administrative expenses. The additional personnel and professional services fees are primarily the result of our on-going efforts to build the legal, finance, human resources, recruiting and information technology functions required of a public company. Stock-based compensation, which was $867,000 in the nine months ended September 30, 2006 compared to $207,000 in the nine months ended September 30, 2005, accounted for $660,000 of the increase in general and administrative expenses.