Red Hat Announces $325 Million Stock and Debenture Repurchase Program

  
    
  
  
    
      Red Hat, Inc. (NASDAQ: RHAT), the world's leading provider of open 
      source solutions to the enterprise, today announced that its Board of 
      Directors has authorized a $325 million Stock and Debenture Repurchase 
      Program. Under the program, the Company is authorized to repurchase in 
      aggregate up to $250 million of the Company's common stock and in 
      aggregate up to $75 million of the Company's 0.5% Convertible Senior 
      Debentures due 2024. Repurchases of common stock and Convertible 
      Debentures may be effected, from time to time, either on the open market 
      or in privately negotiated transactions, as applicable.
    
    
      "We believe this repurchase program is in the best interest of our 
      shareholders," said Charles Peters, Chief Financial Officer and 
      Executive Vice President. "It underscores our belief in Red Hat's future 
      and represents an opportunity to enhance long-term shareholder value."
    
    
      The timing and the amount of any repurchased common stock and any 
      Convertible Debentures will be determined by the Company's management 
      based on its evaluation of market conditions and other factors. 
      Repurchases of common stock may also be made under a Rule 10b5-1 plan, 
      which would permit common stock to be repurchased when the Company might 
      otherwise be precluded from doing so under insider trading laws. The 
      repurchase program may be suspended or discontinued at any time. Any 
      repurchased common stock will be available for use in connection with 
      its stock plans and for other corporate purposes. All repurchased 
      Convertible Debentures will be retired and canceled.
    
    
      The repurchase program will be funded using the Company's working 
      capital. As of August 31, 2006, the Company had cash and investments in 
      debt securities of approximately $1.0 billion.
    
    
      Red Hat had approximately 191 million shares of common stock outstanding 
      as of September 30, 2006.
    
    
      About Red Hat, Inc.
    
    
      Red Hat, the world's leading open source solutions provider, is 
      headquartered in Raleigh, NC with satellite offices spanning the globe. 
      CIOs and other senior-level IT executives have ranked Red Hat as the 
      industry's most valued vendor for two consecutive years in the CIO 
      Insight Magazine Vendor Value study. Red Hat is leading Linux and open 
      source solutions into the mainstream by making high-quality, low-cost 
      technology accessible. Red Hat provides an operating system platform, 
      Red Hat Enterprise Linux, along with applications, management, and 
      middleware solutions, including JBoss Enterprise Middleware Suite. Red 
      Hat is accelerating the shift to service-oriented architectures and 
      enabling the next generation of web-enabled applications running on a 
      low-cost, secure open source platform. Red Hat also offers support, 
      training and consulting services to its customers worldwide and through 
      top-tier partnerships. Red Hat's open source strategy offers customers a 
      long term plan for building infrastructures that are based on and 
      leverage open source technologies with a focus on security and ease of 
      management. Learn more: http://www.redhat.com
    
    
      Forward-Looking Statements
    
    
      Certain statements contained in this press release may constitute 
      "forward-looking statements" within the meaning of the Private 
      Securities Litigation Reform Act of 1995. Forward-looking statements 
      provide current expectations of future events based on certain 
      assumptions and include any statement that does not directly relate to 
      any historical or current fact. Actual results may differ materially 
      from those indicated by such forward-looking statements as a result of 
      various important factors, including the market price of the Company's 
      common stock and Convertible Debentures; the nature of other investment 
      opportunities presented to the Company from time to time; risks related 
      to the integration of acquisitions; the ability of the Company to 
      effectively compete; the inability to adequately protect Company 
      intellectual property and the potential for infringement or breach of 
      license claims of or relating to third party intellectual property; 
      risks related to data and information security vulnerabilities; 
      ineffective management of, and control over, the Company's growth and 
      international operations; adverse results in litigation; the dependence 
      on key personnel as well as other factors contained in our most recent 
      Quarterly Report on Form 10-Q (copies of which may be accessed through 
      the Securities and Exchange Commission's website at http://www.sec.gov), 
      including those found therein under the captions "Risk Factors" and 
      "Management's Discussion and Analysis of Financial Condition and Results 
      of Operations". In addition, the forward-looking statements included in 
      this press release represent the Company's views as of the date of this 
      press release and these views could change. However, while the Company 
      may elect to update these forward-looking statements at some point in 
      the future, the Company specifically disclaims any obligation to do so. 
      These forward-looking statements should not be relied upon as 
      representing the Company's views as of any date subsequent to the date 
      of the press release.
    
    
      LINUX is a trademark of Linus Torvalds. RED HAT and JBOSS are registered 
      trademarks of Red Hat, Inc. and its subsidiaries in the US and other 
      countries.
    
  
Red Hat, Inc. (NASDAQ: RHAT), the world's leading provider of open
source solutions to the enterprise, today announced that its Board of
Directors has authorized a $325 million Stock and Debenture Repurchase
Program. Under the program, the Company is authorized to repurchase in
aggregate up to $250 million of the Company's common stock and in
aggregate up to $75 million of the Company's 0.5% Convertible Senior
Debentures due 2024. Repurchases of common stock and Convertible
Debentures may be effected, from time to time, either on the open
market or in privately negotiated transactions, as applicable.

   "We believe this repurchase program is in the best interest of our
shareholders," said Charles Peters, Chief Financial Officer and
Executive Vice President. "It underscores our belief in Red Hat's
future and represents an opportunity to enhance long-term shareholder
value."

   The timing and the amount of any repurchased common stock and any
Convertible Debentures will be determined by the Company's management
based on its evaluation of market conditions and other factors.
Repurchases of common stock may also be made under a Rule 10b5-1 plan,
which would permit common stock to be repurchased when the Company
might otherwise be precluded from doing so under insider trading laws.
The repurchase program may be suspended or discontinued at any time.
Any repurchased common stock will be available for use in connection
with its stock plans and for other corporate purposes. All repurchased
Convertible Debentures will be retired and canceled.

   The repurchase program will be funded using the Company's working
capital. As of August 31, 2006, the Company had cash and investments
in debt securities of approximately $1.0 billion.

   Red Hat had approximately 191 million shares of common stock
outstanding as of September 30, 2006.

   About Red Hat, Inc.

   Red Hat, the world's leading open source solutions provider, is
headquartered in Raleigh, NC with satellite offices spanning the
globe. CIOs and other senior-level IT executives have ranked Red Hat
as the industry's most valued vendor for two consecutive years in the
CIO Insight Magazine Vendor Value study. Red Hat is leading Linux and
open source solutions into the mainstream by making high-quality,
low-cost technology accessible. Red Hat provides an operating system
platform, Red Hat Enterprise Linux, along with applications,
management, and middleware solutions, including JBoss Enterprise
Middleware Suite. Red Hat is accelerating the shift to
service-oriented architectures and enabling the next generation of
web-enabled applications running on a low-cost, secure open source
platform. Red Hat also offers support, training and consulting
services to its customers worldwide and through top-tier partnerships.
Red Hat's open source strategy offers customers a long term plan for
building infrastructures that are based on and leverage open source
technologies with a focus on security and ease of management. Learn
more: http://www.redhat.com

   Forward-Looking Statements

   Certain statements contained in this press release may constitute
"forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. Forward-looking statements
provide current expectations of future events based on certain
assumptions and include any statement that does not directly relate to
any historical or current fact. Actual results may differ materially
from those indicated by such forward-looking statements as a result of
various important factors, including the market price of the Company's
common stock and Convertible Debentures; the nature of other
investment opportunities presented to the Company from time to time;
risks related to the integration of acquisitions; the ability of the
Company to effectively compete; the inability to adequately protect
Company intellectual property and the potential for infringement or
breach of license claims of or relating to third party intellectual
property; risks related to data and information security
vulnerabilities; ineffective management of, and control over, the
Company's growth and international operations; adverse results in
litigation; the dependence on key personnel as well as other factors
contained in our most recent Quarterly Report on Form 10-Q (copies of
which may be accessed through the Securities and Exchange Commission's
website at http://www.sec.gov), including those found therein under
the captions "Risk Factors" and "Management's Discussion and Analysis
of Financial Condition and Results of Operations". In addition, the
forward-looking statements included in this press release represent
the Company's views as of the date of this press release and these
views could change. However, while the Company may elect to update
these forward-looking statements at some point in the future, the
Company specifically disclaims any obligation to do so. These
forward-looking statements should not be relied upon as representing
the Company's views as of any date subsequent to the date of the press
release.

   LINUX is a trademark of Linus Torvalds. RED HAT and JBOSS are
registered trademarks of Red Hat, Inc. and its subsidiaries in the US
and other countries.