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FEA Six-Month Results Reflect Strong Growth for Risk Analytics Provider

October 29, 2001 — Berkeley, Calif.

Financial Engineering Associates, Inc. (FEA) reported today that the company’s six-months financial results show continuing strong revenue and earnings growth for the leading risk analytics software developer.

For the first half of fiscal year 2002, FEA sales grew 70% year-over-year, outpacing prior gains of 52% in the first six months of last year.Privately-held FEA reported second-quarter and first-half results for the fiscal year-ending February 28, 2002 to its shareholders.

A major contributing factor to FEA's strong sales has been the introduction of enterprise-wide licensing agreements. The company has recently concluded such deals with some of the world’s top-tier energy firms, including TXU Energy Trading Ltd., a division of TXU (NYSE:TXU).

"We know that many of our clients are using FEA across their global enterprise -- on desktops, as well as in proprietary and third-party systems," Laurent Birade, FEA head of sales, said. "Enterprise-wide FEA licensing allows clients to manage IT investment at the corporate level, satisfying the traders, marketers, and risk managers who count on FEA products and support."

FEA derivative pricing and risk management technologies are used worldwide at firms in the energy, commodity, interest rate, foreign exchange and equity markets.

Mark Garman, Chief Scientist and President of FEA said "Q2 has been particularly gratifying for FEA in FY2002 and FY2001, with revenue growth in both years being around 100%. There are some indications that the usual concentration of software sector sales in Q3 and Q4 may be smoothing out, indicating a more year-round cycle. In light of market volatility in the past year, customers are no longer waiting to make decisions about software acquisitions. Many of FEA’s clients have realized that the immediacy of deploying leading-edge software can give them a competitive advantage."

The demands of continued growth have prompted FEA to plan a move into a new headquarters building in Berkeley, California before year-end. A significant feature of the new offices is a custom-built training room. This will allow FEA to offer clients hands-on training with its software products, as well as the education in practical risk and valuation theory for which FEA is renown. The courses will be led by FEA engineering, product development and derivative specialists, and by guest experts in the field.

"By investing in our support, training and education capabilities, we build upon the client-driven innovations shaping the markets for FEA risk analytics, "Birade commented.

FEA Excel add-in products bring easy-to-use functionality to client-customized spreadsheets. FEA analytic programming libraries are also licensed by FEA Alliance Partners as embedded components of customized trading and risk management systems and services installed worldwide.