National Instruments

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Safe Harbor Warning

During the course of this presentation, we may make projections or other forward-looking statements regarding future events or the future financial performance of the company. We wish to caution you that such statements are just predictions and that actual events or results may differ materially. We refer you to the documents the company files regularly with the Securities and Exchange Commission, specifically the company's most recent Form 10-K and 10-Q. These documents contain and identify important factors that could cause the actual results to differ materially from those contained in our projections or forward-looking statements.

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Profile•Leaders in Computer-based Measurement and Automation

•Long-term Track Record of Growth and Profitability

•$821M Revenue in 2008

•$158 M Revenue in Q1 2009

•More than 5,000 employees; operations in 40+ countries

•Fortune’s 100 Best Companies to Work For 10th Consecutive Year

•Cash and short-term investments $241 million

Net R

evenu

e in M

illion

s

Record Revenue of

$821 Million in 2008

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What We Do

Low-Cost Modular

Measurement and

Control Hardware

Productive Software

Development Tools

Highly Integrated

Systems Platforms

Used By Engineers and Scientists for Test, Design and Control

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Empowering Users Through Software

LEGO Mindstorms NXT

“the smartest, coolest toy

of the year”

CERN Large Hadron Collider

“the most powerful instrument

on earth”

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NI’s Increased Value to CustomersControl Traditional

InstrumentsComplete

System SolutionsSimple PC-Based

Measurements

PC Data Acquisition

Typical Order Size

Compact FieldPoint System Platform

LabVIEW Real-Time

PXI System Platform

GPIB Instrument Control

LabVIEWSoftware

1980s 1990s 2000s

< $2 K

$1 K - $15 K

$10 K-$100 K+

CompactRIO IndustrialSystem Platform

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Test and Measurement – a $12 Billion Market

• Manufacturing focused,

Semiconductor and board

test

• Low volume, high dollar

systems sales (cyclic)

NI is an OEM supplier

Semiconductor ATE

$3.9B

• Products used in

electronic design and test

•Measurement needs

increasingly met by

commercial technologies

Growing market share

in automated test

General Purpose Test

$3.8B

• Communications

equipment design and

test

•Trend to software-based

systems and increasing

complexity

Large NI growth

potential

Communications Test

$4.2B

Source: Frost and Sullivan, 2006

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Today’s Challenges: The Traditional Approach

Oscilloscope

Logic Analyzer

Spectrum Analyzer

DMM

Communications Analyzer

LCR Meter

Function

Generator

Power Supply

Pattern Generator

Programmable Switch

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• Lower cost

• Higher performance

• Smaller size

• Flexible

• Easily upgraded

• User-defined

• Lower cost

• Higher performance

• Smaller size

• Flexible

• Lower cost

• Higher performance

• Smaller size

NI’s Value Proposition

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Industrial and Embedded – a >$40 B Market

• Plant automation

• Machine builders

• Enterprise trend

• Rugged, simple IO

• Software and hardware

Companies

NI compliments PLCs

PLC/PAC

• Trend to FPGAs

• Trend to high-level tools

• Price and cost driven

• Fragmented tool chain

NI makes design easier

Custom Design

• PC-based architectures

• Open

• Time to market driven

• Fragmented market

NI delivers quality

measurements

SBC/Embedded

>$13B >$24B $3B

NI Estimate

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Development Platform for the Next 30 Years

Graphical System DesignDesign Prototype Deploy

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Graphical System Design Examples

Machine ControlPackaging/Processing High-speed motion control,

batch control, discrete control

Heavy Machinery Control Real-time signal processing and

control of power electronics, hydraulic systems

Semiconductor/Biomed Custom motion and vision

inspection, material handling

Machine Monitoring

• Machine Condition Monitoring– Bearing order analysis, lubrication

monitoring, cooling, combustion, …

• Mobile/portable DSA, NVH– Noise, vibration, harshness, dynamic

signal analysis, acoustics

• Distributed Acquisition– Central controller with distributed I/O

nodes over Ethernet/wireless

In-Vehicle Data Acquisition• In-Vehicle Data Acquisition

– Automobiles, motorcycles, recreational vehicles, research aircraft, trains

• Engine and ECU test cells– HIL testing of engines and engine

controllers, sensor simulation using FPGA

• Rapid Control Prototyping– Automotive/aerospace control

prototyping

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Diversity of Applications

ElectronicsSemiconductors Computers

No industry is greater than 15% of revenue

Advanced

ResearchPetrochemical

Food

ProcessingTextiles

AutomotiveTelecom

ATE Military/Aerospace

Academic

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Virtual Instrumentation EverywhereMore than 30,000 companies

>90% of Fortune 500 manufacturing companies

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Strong Track Record of Growth and ProfitabilityN

et Reven

ue in

Millio

ns

Record Revenue of $821 Million in 2008

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Success Defined

• Goals

Sustained revenue growth >20%

Sustained operating income ~18%

• Strategies for the 2000’s economic era

Get R&D to 16% to fund the long term

Gross Margin ~76%

Get operating Income back to 18%

Be able to grow >10% through moderate industrial recessions

Invest incremental leverage to drive revenue growth >20%

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Strategic Plan for the Current EnvironmentMitigating threats and exploiting opportunities created by the recession

Prudent Financial Management

• Strong cash position

• Maintaining stable gross margins

• Flexible manufacturing cost structure

• Use strength to achieve lower component costs

• Foster strong employee productivity and

innovation

• Optimize operating expenses

Focusing on the Long-term

• Deepen customer relationships

• Continue strategic R&D investment

• Acquire key technical expertise

• Enter large new adjacent markets where our

disruptive technology offers significant cost

savings over traditional solutions

• Serve our existing markets as they focus on

efficiency gains and cost reduction.

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R&D Headcount

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Growth in Strategic Product RevenuesSuccess with Virtual Instrumentation and Graphical System Design

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*Agilent electronic measurements, Cognex, Keithley, LeCroy, LTX-Credence, Teradyne

NI’s Revenue Compared to US Public T&M and Semi Test Companies*

JP Morgan Global PMI vs. NI Revenue Growth

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Field Sales Expansion Plan

Budget

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Worldwide Average Order Size

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Non-GAAP Gross Margin

Reconciliation of the company’s GAAP and non-GAAP results can be found at

ni.com/pdf/nati/us/grossmarginreconciliation.pdf

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Non-GAAP Operating Income and R&D as a

Percentage of Revenue

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Financial Plan for the Current EnvironmentTTaking a prudent and realistic approach to the economy

• Sustained investment in R&D

• Moderating field sales force expansion

• Budgeting for full year 2009 total operating expenses to decline 10%

year-over-year, compared to 14% YOY growth in 2008.

• Manage costs with a focus on balancing our short-term operational

needs while making the strategic investments that best ensure our

future success.

National Instruments