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The Letter to Shareholders contained in this annual report contains forward-looking statements, particularly statements regarding our volume Solaris strategy; new market opportunities resulting from innovation; our goals for operating profi t for fi scal year 2009; growing our market share; attracting new customers; forging new partnerships; gaining increased leverage in our operating model; and our positioning for the era ahead. These forward-looking statements involve risks and uncertainties, and actual results may differ materially from those predicted in any such forward-looking statements. Such factors include, but are not limited to, increased competition; increased pricing pressures; risks associated with Sun’s ability to achieve expected cost reductions within expected time frames; a material acquisition, restructuring or other event that results in signifi cant charges; the complexity of our products and the importance of rapidly and successfully developing and introducing new products; reliance on single-source suppliers; risks associated with Sun’s ability to purchase a suffi cient amount of components to meet demand; inventory risks; risks associated with international customers and operations; delays in product development or customer accep- tance and implementation of new products and technologies; Sun’s dependence on signifi cant customers and specifi c industries; Sun’s dependence on channel partners; and failure to successfully integrate acquired companies; and the other factors described in the section entitled “Risk Factors” contained elsewhere in this annual report. Sun assumes no obligation to, and does not currently intend to, update these forward-looking statements except as required by law.

Copyright 2008 Sun Microsystems, Inc. All rights reserved. Sun, Sun Microsystems, the Sun logo, Java, Solaris, OpenSolaris, StorageTek, MySQL, ZFS, The Network is the Computer, Sun Fire, Sun Blade, Sun Ray, VirtualBox, Netra, Network.com, StarOffi ce, N1, and StorEdge are trademarks or registered trademarks of Sun Microsystems, Inc. or its subsidiaries in the United States and other countries. All SPARC trademarks are used under license and are trademarks or registered trademarks of SPARC International, Inc. in the US and other countries. Products bearing SPARC trademarks are based upon an architecture developed by Sun Microsystems, Inc. Intel® Xeon® is a trademark or registered trademark of Intel Corporation or its subsidiaries in the United States and other countries. AMD and Opteron are trademarks or registered trademarks of Advanced Micro Devices.

About Sun: A singular vision, The Network is the Computer™, drives Sun in delivering industry-leading technologies that focus on the whole system—where hardware, software, and services combine. With a proven history of sharing, building communities, and innovation, Sun creates opportunities, both social and economic, around the world. You can learn more about Sun at sun.com.

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THIS REPORT WAS PRINTED USING SOY BASED INK.