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2 Sep 2010 ... times as much revenue per gallon of alcohol sold as spirits. ..... The same day that McDonnell's privatization plan w (more)
Control State Politics
File Format: PDF/Adobe Acrobat - Quick View
2 Sep 2010 ... times as much revenue per gallon of alcohol sold as spirits. ..... The same day that McDonnell's privatization plan was unveiled, the Washington ... amount of annual revenue lost, and whether the new tax income would grow over .... also decrease annual state alcohol revenue by $200-300 million.65
http://www.24houronlinemoney.com (less)
Slide 1: Symantec's Fiscal 2008 Fourth Quarter Supplemental Information (Unaudited) SUMMARY (1) (in thousands)
Revenue and Earnings Results Non-GAAP Revenue: GAAP Revenue: Non-GAAP EPS: GAAP EPS: Mar-08Q $1,547,987 $1,539,741 $0.36 $0.22 Dec-07Q $1,529,026 $1,515,251 $0.33 $0.15 Mar-07Q $1,364,782 $1,357,217 $0.24 $0.07 Q408 vs. Q407 Growth 13% 13% 50% 214% Q408 vs. Q407 Growth 21% 11% 12% 15% 10% 1223% Q408 vs. Q407 Growth 15% 12% 10% 17% 19% Q4 vs. Q3 Growth 1% 2% 9% 47% Q4 vs. Q3 Growth 3% 0% 0% 1% 2% 76% Q4 vs. Q3 Growth 0% 2% 2% -1% 4% % of Total Revenue 28% 37% 6% 71% 29% 0% % of Total Revenue 53% 47% 51% 34% 15% FY 08 $5,937,189 $5,874,419 $1.27 $0.52 FY 07 $5,252,664 $5,199,366 $1.01 $0.41 Y/Y Growth 13% 13% 26% 27%
Revenue by Segment - Non-GAAP Security & Compliance Storage and Server Management Services: Total Enterprise: Consumer: Other:
(2)
Mar-08Q $438,969 $562,910 $96,610 $1,098,489 $448,625 $873
Dec-07Q $426,981 $565,155 $96,189 $1,088,325 $440,206 $495
Mar-07Q $361,294 $508,783 $86,439 $956,516 $408,200 $66
#REF!
FY 08 $1,677,515 $2,151,693 $359,955 $4,189,163 $1,746,089 $1,937
FY 07 $1,412,686 $1,955,923 $293,428 $3,662,037 $1,590,506 $122
Y/Y
Growth 19% 10% 23% 14% 10%
1488%
Revenue by Geography - Non-GAAP International: U.S.: Americas (U.S., Latin America, Canada): EMEA: Asia Pacific & Japan: Expenses and Profitability - Non-GAAP Gross Margin: Operating Expenses: Operating Expenses as a % of total revenue: Operating Income: Operating Margin: Net Income: Fully Diluted Shares Outstanding:
Mar-08Q $812,912 $735,075 $805,807 $521,843 $220,337 Mar-08Q 86.0% $901,220 58% $430,751 27.8% $309,430 856,747
Dec-07Q $811,760 $717,266 $789,075 $528,860 $211,091 Dec-07Q 86.2% $898,708 59% $419,538 27.4% $291,748 876,221
Mar-07Q $705,633 $659,149 $734,458 $444,734 $185,590 Mar-07Q 84.0% $841,640 62% $305,205 22.4% $226,767 932,985
FY 08 $3,080,962 $2,856,227 $3,137,974 $1,980,668 $818,547 FY 08 85.6% $3,506,110 59% $1,576,810 26.6% $1,126,511 884,136
FY 07 $2,659,067 $2,593,597 $2,876,065 $1,657,421 $719,178 FY 07 83.7% $3,049,918 58% $1,345,690 25.6% $992,477 983,261
Y/Y
Growth 16% 10% 9% 20% 14%
Y/Y
Growth 15% 17% 14% -10%
Balance Sheet & Cash Flow Metrics Cash position (including short-term investments): DSO: Non-GAAP Deferred Revenue: GAAP Deferred Revenue: Cash Flow from Operating Activities: Purchase of property and equipment Stock Repurchase - number of shares purchased:
Mar-08Q $2,426,953 45 days $3,088,231 $3,076,569 $2,565.00 $674,370 $274 $64,678 11.3 million shares
Dec-07Q $1,984,596 54 days $2,897,029 $2,877,173 $462.00 $462,005 $71 $71,100 22.7 million shares
Mar-07Q $2,987,653 45 days $2,771,741 $2,753,783 $1,666.00 $566,984 $420 $70,154 33.1 million shares
Q408 vs. Q407 Growth -19% 11% 12% 54% 19% -35% -8%
Q4 vs. Q3 Growth 22% 7% 7% 455% 46% 286% -9%
FY 08 N/A N/A N/A N/A 2565 $1,818,653 274 $273,807 80.9 million shares
FY 07 N/A N/A N/A N/A 1666 $1,666,235 420 $419,749 161.7 million shares
Y/Y
Growth N/A N/A N/A
N/A 0.539615846 9% -0.347619048 -35% -
(1) The information presented above includes selected historical GAAP and non-GAAP financial information. To see the most directly comparable GAAP financial measures together with the reconciliation, go to: http://investor.symantec.com/phoenix.zhtml?c=89422&p=irol-irhome. (2) During the March 2008 quarter, we modified the segment reporting structure to more readily match business operational changes as a result of the January 2008 promotion of Enrique Salem to Chief Operating Officer of Symantec. The following changes have been made to our segment reporting structure: (i) the Security and Data Management Group is now known as the Security and Compliance Group; (ii) the Altiris segment, in its entirety, has been moved into the Security and Compliance Group; (iii) the Data Center Management Group is now known as the Storage and Server Management Group; and (iv) we have moved the Backup Exec products to the Storage and Server Management Group from the Security and Data Management Group. There were no changes to the Consumer, Services, or Other segments. The new business structure more directly aligns the operating segments with markets and customers, and we believe will establish more direct lines of reporting responsibilities, speed decision making, and enhance the ability to pursue strategic growth opportunities. Data shown from the prior periods have been reclassified to match the current reporting structure.
1
Slide 2: Big Deal Summary
Greater than Greater than Mar-08 Dec-07 Sep-07 Jun-07 Mar-07 Dec-06 Sep-06 Jun-06
Headcount
$300k 449 554 302 249 391 409 293 299 $1m 115 127 64 48 101 115 67 64
Mar-08 Dec-07 (1) Sep-07 Jun-07 (2) Mar-07 Dec-06 Sep-06 Jun-06
Employees 17,648 17,906 18,059 17,705 17,131 17,396 16,598 16,161
(1) Includes 164 employees added from the Vontu acquisition. (2) Includes 980 employees added from the Altiris acquisition.
2
Slide 3: Symantec Corporation GAAP Statements of Operations (In thousands, except per share data) (Unaudited) Fiscal 2008 Net revenues: Content, subscriptions, and maintenance Licenses Total net revenues Cost of revenues: Content, subscriptions, and maintenance Licenses Amortization of acquired product rights Total cost of revenues Gross Profit Operating expenses: Sales and marketing Research and development General and administrative Amortization of other purchased intangible assets Restructuring Integration Loss on sale of assets Total operating expenses Operating income (loss) Interest income Interest expense Settlements of litigation Other income (expense), net Income (loss) before income taxes Provision for income taxes Net income (loss) Earnings per share - diluted Weighted-average shares outstanding - diluted $ $ $ 4,561,566 1,312,853 5,874,419 826,339 44,664 349,327 1,220,330 4,654,089 $ Quarter Ended 31-Mar-08 1,190,440 349,301 1,539,741 206,746 13,230 86,403 306,379 1,233,362 $ Quarter Ended 31-Dec-07 1,167,443 347,808 1,515,251 204,355 10,304 84,502 299,161 1,216,090 $ Quarter Ended 30-Sep-07 1,117,165 301,924 1,419,089 205,572 9,892 89,062 304,526 1,114,563 $ Quarter Ended 30-Jun-07 1,086,518 313,820 1,400,338 209,666 11,238 89,360 310,264 1,090,074 $ Fiscal 2007 3,917,572 1,281,794 5,199,366 823,525 49,968 342,333 1,215,826 3,983,540 $ Quarter Ended 31-Mar-07 1,051,112 306,105 1,357,217 210,888 10,502 84,873 306,263 1,050,954 $ Quarter Ended 31-Dec-06 993,889 321,984 1,315,873 213,977 12,015 84,511 310,503 1,005,370 $ Quarter Ended 30-Sep-06 955,025 305,383 1,260,408 203,524 11,539 85,338 300,401 960,007 $ Quarter Ended 30-Jun-06 917,546 348,322 1,265,868 195,136 15,912 87,611 298,659 967,209
2,415,264 895,242 347,642 225,131 73,914 94,616 4,051,809 602,280 76,896 (29,480) 58,500 4,327 712,523 248,673 463,850 0.52 884,136 $ $
623,592 223,314 92,792 56,284 22,031 1,928 1,019,941 213,421 16,899 (9,095) 58,500 3,444 283,169 96,783 186,386 0.22 856,747 $ $
627,980 225,293 82,600 54,996 23,305 6,142 1,020,316 195,774 19,997 (7,477) (2,348) 205,946 74,056 131,890 0.15 876,221 $ $
595,162 221,057 86,405 56,926 9,578 86,546 1,055,674 58,889 19,179 (6,617) 1,965 73,416 23,048 50,368 0.06 892,759 $ $
568,530 225,578 85,845 56,925 19,000 955,878 134,196 20,821 (6,291) 1,266 149,992 54,786 95,206 0.10 910,302 $ $
2,007,651 866,882 316,783 201,502 70,236 744 3,463,798 519,742 122,043 (27,233) 17,070 631,622 227,242 404,380 0.41 983,261 $ $
575,546 218,468 79,266 49,932 50,758 744 974,714 76,240 30,503 (6,246) 5,568 106,065 45,171 60,894 0.07 932,985 $ $
500,067 216,969 78,820 50,476 846,332 159,038 28,741 (6,257) (3,897) 177,626 60,855 116,769 0.12 963,309 $ $
464,589 218,250 80,076 50,480 6,220 819,615 140,391 34,983 (8,053) 15,581 182,904 56,722 126,181 0.13 987,916 $ $
467,449 213,195 78,621 50,614 13,258 823,137 144,072 27,816 (6,678) (182) 165,028 64,494 100,535 0.10 1,048,833
Symantec Corporation Non-GAAP Statements of Operations (1) (In thousands, except per share data) (Unaudited) Fiscal 2008 Net revenues Cost of revenues Gross profit Operating expenses: Sales and marketing Research and development General and administrative Total operating expenses Operating income Interest income Interest expense Other income (expense), net Income before income taxes Provision for income taxes Net income Earnings per share - diluted Weighted-average shares outstanding - diluted $ $ $ 5,937,189 854,269 5,082,920 $ Quarter Ended 31-Mar-08 1,547,987 216,016 1,331,971 $ Quarter Ended 31-Dec-07 1,529,026 210,780 1,318,246 $ Quarter Ended 30-Sep-07 1,437,332 210,964 1,226,368 $ Quarter Ended 30-Jun-07 1,422,844 216,508 1,206,336 $ Fiscal 2007 5,252,664 857,056 4,395,608 $ Quarter Ended 31-Mar-07 1,364,782 217,936 1,146,846 $ Quarter Ended 31-Dec-06 1,326,341 222,172 1,104,169 $ Quarter Ended 30-Sep-06 1,273,392 209,879 1,063,513 $ Quarter Ended 30-Jun-06 1,288,149 207,069 1,081,080
2,355,551 835,977 314,582 3,506,110 1,576,810 76,896 (29,480) 1,050 1,625,276 498,765 1,126,511 1.27 884,136 $ $
607,770 209,079 84,371 901,220 430,751 16,899 (9,095) 3,444 442,000 132,570 309,430 0.36 856,747 $ $
613,857 209,579 75,272 898,708 419,538 19,997 (7,477) (5,626) 426,432 134,684 291,748 0.33 876,221 $ $
580,736 206,056 78,028 864,820 361,548 19,179 (6,617) 1,966 376,076 113,440 262,636 0.29 892,759 $ $
553,188 211,263 76,911 841,362 364,974 20,821 (6,291) 1,266 380,770 118,072 262,698 0.29 910,302 $ $
1,950,202 807,950 291,766 3,049,918 1,345,690 122,041 (27,233) (2,919) 1,437,579 445,102 992,477 1.01 983,261 $ $
563,457 206,148 72,036 841,641 305,205 30,501 (6,245) 2,344 331,805 105,038 226,767 0.24 932,985 $ $
487,210 202,607 72,844 762,661 341,508 28,741 (6,257) (3,897) 360,095 109,288 250,807 0.26 963,309 $ $
446,949 200,963 73,293 721,205 342,308 34,983 (8,053) (1,184) 368,054 106,590 261,464 0.26 987,916 $ $
452,586 198,232 73,593 724,411 356,669 27,816 (6,678) (182) 377,625 124,185 253,440 0.24 1,048,833
(1) The method we use to produce non-GAAP results is not computed according to GAAP and may differ from the methods used by other companies. Our non-GAAP results are not meant to be considered in isolation or as a substitute for comparable GAAP measures and should be read only in conjunction with our condensed consolidated financial statements prepared in accordance with GAAP.
3
Slide 4: Symantec Corporation Reconciliation of Non-GAAP Adjustments Statements of Operations (In thousands, except per share data) (Unaudited) Fiscal 2008 NET REVENUES: GAAP net revenues Deferred revenue related to acquisitions(1) Non-GAAP net revenues GROSS PROFIT: GAAP gross profit Deferred revenue related to acquisitions(1) Stock-based compensation (2) Amortization of acquired product rights (3) Gross profit adjustment Non-GAAP gross profit OPERATING EXPENSES: GAAP operating expenses Stock-based compensation (2) Amortization of other intangible assets (3) Restructuring (4) Write-down of assets (5) Loss on sale of assets (6) Executive incentive bonuses (7) Integration (8) Operating expense adjustment Non-GAAP operating expenses OPERATING INCOME: GAAP operating income Gross profit adjustment Operating expense adjustment Non-GAAP operating income NET INCOME: GAAP net income Gross profit adjustment Operating expense adjustment Gain on sale of assets (9) Settlements of litigation (10) Income tax effect on above items (11) Non-GAAP net income EARNINGS PER SHARE - DILUTED: GAAP earnings per share Stock-based compensation adjustment per share, net of tax (2) Other non-GAAP adjustments per share, net of tax (1, 3-10) Non-GAAP earnings per share WEIGHTED-AVERAGE SHARES OUTSTANDING - DILUTED: GAAP weighted-average shares outstanding $ $ 5,874,419 62,770 5,937,189 $ $ Quarter Ended 31-Mar-08 1,539,741 8,246 1,547,987 $ $ Quarter Ended 31-Dec-07 1,515,251 13,775 1,529,026 $ $ Quarter Ended 30-Sep-07 1,419,089 18,243 1,437,332 $ $ Quarter Ended 30-Jun-07 1,400,338 22,506 1,422,844 $ $ Fiscal 2007 5,199,366 53,298 5,252,664 $ $ Quarter Ended 31-Mar-07 1,357,217 7,565 1,364,782 $ $ Quarter Ended 31-Dec-06 1,315,873 10,468 1,326,341 $ $ Quarter Ended 30-Sep-06 1,260,408 12,984 1,273,392 $ $ Quarter Ended 30-Jun-06 1,265,868 22,281 1,288,149
$
$
4,654,089 62,770 16,734 349,327 428,831 5,082,920
$
$
1,233,362 8,246 3,960 86,403 98,609 1,331,971
#REF!
$
$
1,216,090 13,775 3,879 84,502 102,156 1,318,246
$
$
1,114,563 18,243 4,499 89,062 111,804 1,226,367
$
$
1,090,074 22,506 4,396 89,360 116,262 1,206,336
$
$
3,983,540 53,298 16,437 342,333 412,068 4,395,608
$
$
1,050,954 7,565 3,454 84,873 95,892 1,146,846
$
$
1,005,370 10,468 3,819 84,512 98,799 1,104,169
$
$
960,007 12,984 5,183 85,339 103,506 1,063,513
$
$
967,209 22,281 3,981 87,609 113,871 1,081,080
$
$
4,051,809 (146,961) (225,131) (73,914) (1,200) (94,616) (3,436) (441) (545,699) 3,506,110
$
$
1,019,941 (38,582) (56,284) (22,031) (1,928) 104 (118,721) 901,220
#REF!
$
$
1,020,316 (35,541) (54,996) (23,305) (1,200) (6,142) (424) (121,608) 898,708
$
$
1,055,674 (36,490) (56,926) (9,578) (86,546) (1,314) (190,854) 864,820
$
$
955,878 (36,348) (56,925) (19,000) (1,802) (441) (114,516) 841,362
$
$
3,463,798 (137,403) (201,502) (70,236) (3,995) (744) (413,880) 3,049,918
$
$
974,714 (31,639) (49,932) (50,758) (744) (133,073) 841,641
$
$
846,332 (32,298) (50,476) (897) (83,671) 762,661
$
$
819,615 (40,628) (50,479) (6,220) (1,083) (98,410) 721,205
$
$
823,137 (32,838) (50,615) (13,258) (2,015) (98,726) 724,411
$ $
602,280 428,831 545,699 1,576,810
$ $
213,421 98,609 118,721 430,751
#REF!
$ $
195,774 102,156 121,608 419,538
$ $
58,889 111,804 190,854 361,547
$ $
134,196 116,262 114,516 364,974
$ $
519,742 412,068 413,880 1,345,690
$ $
76,240 95,892 133,073 305,205
$ $
159,038 98,799 83,671 341,508
$ $
140,391 103,506 98,410 342,307
$ $
144,072 113,871 98,726 356,669
$
$
463,850 428,831 545,699 (3,277) (58,500) (250,092) 1,126,511
$
$
186,386 98,609 118,721 (58,500) (35,786) 309,430
#REF!
$
$
131,890 102,156 121,608 (3,277) (60,629) 291,748
$
$
50,368 111,804 190,854 (90,391) 262,635
$
$
95,206 116,262 114,516 (63,286) 262,698
$
$
404,380 412,068 413,880 (19,988) (217,863) 992,477
$
$
60,894 95,892 133,073 (3,223) (59,869) 226,767
$
$
116,770 98,799 83,671 (48,433) 250,807
$
$
126,181 103,506 98,410 (16,765) (49,868) 261,464
$
$
100,535 113,871 98,726 (59,692) 253,440
$
$
0.52 0.14 0.61 1.27
$
$
0.22 0.04 0.10 0.36
$
$
0.15 0.04 0.14 0.33
$
$
0.06 0.04 0.19 0.29
$
$
0.10 0.04 0.15 0.29
$
$
0.41 0.12 0.48 1.01
$
$
0.07 0.03 0.14 0.24
$
$
0.12 0.03 0.11 0.26
$
$
0.13 0.04 0.09 0.26
$
$
0.10 0.03 0.11 0.24
884,136
856,747
876,221
892,759
910,302
983,261
932,985
963,309
987,916
1,048,833
(See notes on following page)
4
Slide 5: The non-GAAP financial measures included in the tables above are non-GAAP net revenues, non-GAAP net income and non-GAAP earnings per share, which adjust for the following items: business combination accounting entries, stock-based compensation expense, restructuring charges, charges related to the amortization of intangible assets, litigation settlements, write-downs of assets and certain other items. We believe the presentation of these non-GAAP financial measures, when taken together with the corresponding GAAP financial measures, provides meaningful supplemental information regarding the Company's operating performance for the reasons discussed below. Our management uses these non-GAAP financial measures in assessing the Company's operating results, as well as when planning, forecasting and analyzing future periods. We believe that these non-GAAP financial measures also facilitate comparisons of the Company's performance to prior periods and to our peers and that investors benefit from an understanding of these non-GAAP financial measures. (1) Fair value adjustment to deferred revenue. We have completed numerous business combinations and acquisitions for a variety of strategic purposes over the past several years. As is the case with our existing business, at the time of acquisition, these acquired businesses recorded deferred revenue related to past transactions for which revenue would be recognized in future periods as revenue recognition criteria are satisfied. The purchase accounting entries for these acquisitions require us to write down a portion of this deferred revenue to its then current fair value. Consequently, in post acquisition periods, we do not recognize the full amount of this deferred revenue. When measuring the performance of our business, however, we add back non-GAAP revenue associated with certain types of deferred revenue that were excluded as a result of these purchase accounting adjustments, as we believe that this provides information about the operating impact of the acquired businesses in a manner consistent with the revenue recognition for our pre-existing products and services. We believe that the inclusion of this revenue provides useful information to our management as well as to investors. (2) Stock-based compensation. Consists of expenses for employee stock options, restricted stock units, restricted stock awards and our employee stock purchase plan determined in accordance with Statement of Financial Accounting Standards Number 123(R), or SFAS 123(R). When evaluating the performance of our individual business units and developing short and long term plans, we do not consider stock-based compensation charges. Our management team is held accountable for cash-based compensation, but we believe that management is limited in its ability to project the impact of stock-based compensation and accordingly is not held accountable for its impact on our operating results. Although stock-based compensation is necessary to attract and retain quality employees, our consideration of stock based compensation places its primary emphasis on overall shareholder dilution rather than the accounting charges associated with such grants. In addition, for comparability purposes, we believe it is useful to provide a non-GAAP financial measure that excludes stock-based compensation in order to better understand the long-term performance of our core business and to facilitate the comparison of our results to the results of our peer companies. Furthermore, unlike cash compensation, the value of stock-based compensation is determined using a complex formula that incorporates factors, such as market volatility, that are beyond our control. Further, we believe it is useful to investors to understand the impact of SFAS 123(R) to our results of operations. For the three months and twelve months ended March 31, 2008 and 2007, respectively, stock-based compensation was allocated as follows:
Three Months Ended March 31, 2008 2007 2008
Year Ended March 31, 2007
Cost of revenues Sales and marketing Research and development General and administrative Total stock based compensation
$
$
3,960 15,748 14,158 8,676 42,542
$
$
3,454 12,084 12,325 7,230 35,093
$
$
16,734 58,181 57,597 31,183 163,695
$
$
16,437 55,855 57,132 24,416 153,840
(3) Amortization of acquired product rights and other intangible assets. When conducting internal development of intangible assets, accounting rules require that we expense the costs as incurred. In the case of acquired businesses, however, we are required to allocate a portion of the purchase price to the accounting value assigned to intangible assets acquired and amortize this amount over the estimated useful lives of the acquired intangibles. The acquired company, in most cases, has itself previously expensed the costs incurred to develop the acquired intangible assets, and the purchase price allocated to these assets is not necessarily reflective of the cost we would incur in developing the intangible asset. We eliminate this amortization charge from our non-GAAP operating results to provide better comparability of pre and post-acquisition operating results and comparability to results of businesses utilizing internally developed intangible assets. (4) Restructuring. We have engaged in various restructuring activities over the past several years that have resulted in costs associated with severance, benefits, outplacement services, and excess facilities. Each restructuring has been a discrete event based on a unique set of business objectives or circumstances, and each has differed from the others in terms of its operational implementation, business impact and scope. We do not engage in restructuring activities in the ordinary course of business. While our operations previously benefited from the employees and facilities covered by our various restructuring charges, these employees and facilities have benefited different parts of our business in different ways, and the amount of these charges has varied significantly from period to period. We believe that it is important to understand these charges; however, we do not believe that these charges are indicative of future operating results and that investors benefit from an understanding of our operating results without giving effect to them. (5) Write-down of assets. During the December 2007 quarter, we recorded a $1.2 million write-down on a facility classified as held for sale. (6) Loss on sale of assets. During the September 2007 quarter, management determined that certain tangible and intangible assets and liabilities of the Storage and Server Management segment (formally the Data Center Management segment) did not meet the long term strategic objectives of the segment, and we recorded a write-down of $87 million to value these assets and liabilities at the respective estimated fair value. We adjusted this amount to $93 million in the December 2007 quarter and to $95 million in the March 2008 quarter. On March 8, 2008 these assets were sold to a third party.
5
Slide 6: (7) Executive incentive bonuses. We have excluded bonuses related to acquisitions and executive sign-on bonuses for newly hired executives. We expect the benefit from these hires and retentions to extend over an indeterminate future period, but under GAAP we are required to expense the entire cost of the bonus in the period paid. We exclude these amounts to provide better comparability of the periods that include and do not include these charges. We believe that investors benefit from an understanding of our operating results for the periods presented without giving effect to these charges. (8) Integration. These charges consist of expenses incurred for consulting services and other professional fees associated with integration activities of acquisitions. Because these expenses are nonrecurring and unique to specific acquisitions, we believe they are not indicative of future operating results and that investors benefit from an understanding of our operating results without giving effect to them. (9) Gain on sale of assets. We exclude these gains because each is a unique one-time occurrence that is not closely related to, or a function of, our ongoing operations. (10) Settlements of litigation. This gain represents the net effect of a charge incurred from our settlements of litigation that was pending against Veritas when we acquired it in July 2005 and a gain from our settlement of certain patent-related matters. We exclude the impact of these settlements because we do not consider the defense and prosecution of these pieces of litigation to be part of the ongoing operation of our business and because of the singular nature of the claims underlying each matter. (11) Income tax effect on above items. This amount adjusts the provision for income taxes to reflect the effect of the non-GAAP adjustments on non-GAAP net income.
6
Slide 7: SYMANTEC CORPORATION Reconciliation of GAAP Revenue Components to Non-GAAP Revenue Components (In thousands) (Unaudited) FY 2008 Non-GAAP GAAP Net Revenues Revenue by Segment Security & Compliance Group Storage and Server Management Group Consumer Services Other (3) Revenue by Geography: Americas (4) EMEA Asia Pacific/Japan Total U.S. Revenue Total International Revenue
(2)
Three Months Ended Mar 31, 2008 Non-GAAP Non-GAAP 5,937,189 $ GAAP Adjustments (1) Non-GAAP 1,547,987 $
Three Months Ended Dec 31, 2007 Non-GAAP GAAP Adjustments (1) Non-GAAP 1,529,026 $
Three Months Ended Sep 30, 2007 Non-GAAP GAAP Adjustments (1) Non-GAAP 1,437,332 $
Three Months Ended Jun 30, 2007 Non-GAAP GAAP Adjustments (1) Non-GAAP 1,422,844
Adjustments (1)
$
5,874,419 $
62,770 $
1,539,741 $
8,246 $
1,515,251 $
13,775 $
1,419,089 $
18,243 $
1,400,338 $
22,506 $
$
$
1,630,133 $ 2,136,307 1,746,089 359,955 1,935 $
47,382 $ 15,386 2$
1,677,515 2,151,693 1,746,089 359,955 1,937
$
432,559 $ 561,076 448,625 96,610 871 $
6,410 $ 1,834 2$
438,969 562,910 448,625 96,610 873
$
$
416,666 $ 561,695 440,206 96,189 495 $
10,315 $ 3,460 -$
426,981 565,155 440,206 96,189 495
$
$
391,287 $ 507,956 433,508 86,010 328 $
13,845 $ 4,398 -$
405,132 512,354 433,508 86,010 328
$
$
389,621 $ 505,580 423,750 81,146 241 $
16,812 $ 5,694 -$
406,433 511,274 423,750 81,146 241
$ $ $ $
3,095,492 $ 1,963,319 815,608 $ 2,814,444 $ 3,059,975 $
42,482 $ 17,349 2,939 $ 41,783 $ 20,987 $
3,137,974 1,980,668 818,547 2,856,227 3,080,962
$ $ $ $
799,756 $ 520,049 219,936 $ 729,095 $ 810,646 $
6,051 $ 1,794 401 $ 5,980 $ 2,266 $
805,807 521,843 220,337 735,075 812,912
$ $ $ $
779,817 $ 524,981 210,453 $ 708,186 $ 807,065 $
9,258 $ 3,879 638 $ 9,080 $ 4,695 $
789,075 528,860 211,091 717,266 811,760
$ $ $ $
764,470 $ 460,485 194,134 $ 695,517 $ 723,572 $
12,222 $ 5,191 830 $ 12,027 $ 6,216 $
776,692 465,676 194,964 707,544 729,788
$ $ $ $
751,449 $ 457,804 191,085 $ 681,646 $ 718,692 $
14,951 $ 6,485 1,070 $ 14,696 $ 7,810 $
766,400 464,289 192,155 696,342 726,502
SYMANTEC CORPORATION Reconciliation of GAAP Revenue (In thousands) (Unaudited) FY 2007 Non-GAAP Adjustments (1) $ Three Months Ended Mar 31, 2007 Non-GAAP Adjustments (1) GAAP Non-GAAP $ 1,357,217 $ 7,565 $ 1,364,782 $ Three Months Ended Dec 31, 2006 Non-GAAP Adjustments (1) GAAP Non-GAAP 1,315,873 $ 10,468 $ 1,326,341 $ Three Months Ended Sep 30, 2006 Non-GAAP Adjustments (1) GAAP Non-GAAP 1,260,408 $ 12,984 $ 1,273,392 $ Three Months Ended Jun 30, 2006 Non-GAAP Adjustments (1) GAAP Non-GAAP 1,265,868 $ 22,281 $ 1,288,149
GAAP Net Revenues Revenue By Segment: Security & Compliance Group Storage and Server Management Group Consumer Services Other (3)
(2)
Non-GAAP 5,252,664
$
5,199,366
53,298 $
$
$
1,408,906 $ 1,906,607 1,590,505 293,226 122 $
3,779 $ 49,317 202 -$
1,412,685 1,955,924 1,590,505 293,428 122
$
$
360,722 $ 501,790 408,200 86,439 66 $
572 $ 6,993 -$
361,294 ## $ 508,783 ## 408,200 86,439 66 $
361,467 $ 479,758 406,145 68,517 (14) $
823 $ 9,645 -$
362,290 ## 489,403 ## 406,145 68,517 (14)
$
$
340,452 $ 459,151 394,382 66,356 67 $
948 $ 12,036 -$
341,400 ## 471,187 ## 394,382 66,356 67
$
$
346,265 $ 465,908 381,778 71,914 3$
1,436 $ 20,643 202 -$
347,701 486,551 381,778 72,116 3
Revenue by Geography: Americas (4) EMEA Asia Pacific/Japan Total U.S. Revenue Total International Revenue
$ $ $ $
$
2,840,570 1,644,177 714,619 2,560,194 2,639,172
11
$ $ $ $
35,495 $ 13,244 4,559 $ 33,403 $ 19,895 $
2,876,065 1,657,421 719,178 2,593,597 2,659,067
$ $ $ $
729,747 442,395 185,075 654,748 702,469
$ $ $ $
4,711 $ 2,339 515 $ 4,401 $ 3,164 $
734,458 444,734 185,590 659,149 705,633
$ $ $ $
720,611 $ 417,813 177,449 $ 650,721 $ 665,152 $
6,832 $ 2,987 649 $ 6,467 $ 4,001 $
727,443 420,800 178,098 657,188 669,153
$ $ $ $
696,367 $ 386,422 177,619 $ 628,614 $ 631,794 $
9,071 $ 3,166 747 $ 8,659 $ 4,325 $
705,438 389,588 178,366 637,273 636,119
$ $ $ $
693,845 $ 397,547 174,476 $ 626,111 $ 639,757 $
14,881 $ 4,752 2,648 $ 13,876 $ 8,405 $
708,726 402,299 177,124 639,987 648,162
We include certain non-GAAP revenue and deferred revenue components in the tracking and forecasting of our revenue and management of our business. This includes non-GAAP revenue associated with deferred revenue that was excluded as a result of purchase accounting adjustments related to acquisitions. We believe the non-GAAP revenue measures set forth above are useful to investors, and such items are used by our management, because this revenue is reflective of our ongoing operating results. (1) We have completed numerous business combinations and acquisitions for a variety of strategic purposes over the past several years. As is the case with our existing business, at the time of acquisition, acquired business had recorded deferred revenue related to past transactions for which revenue would be recognized in future periods as revenue recognition criteria are satisfied. The purchase accounting entries for these acquisitions require us to write down a portion of this deferred revenue to its then current fair value. Consequently, in post acquisition periods, we do not recognize the full amount of this deferred revenue. When measuring the performance of our business, however, we add back non-GAAP revenue associated with certain types of deferred revenue that were excluded as a result of these purchase accounting adjustments, as we believe that this provides information about the operating impact of the acquired businesses in a manner consistent with the revenue recognition for our for our pre-existing products and services. We believe that the inclusion of this revenue provides useful information to our management as well as to investors.
7
Slide 8: (2) During the March 2008 quarter, we modified the segment reporting structure to more readily match business operational changes as a result of the January 2008 promotion of Enrique Salem to Chief Operating Officer of Symantec. The following changes have been made to our segment reporting structure: (i) the Security and Data Management Group is now known as the Security and Compliance Group; (ii) the Altiris segment, in its entirety, has been moved into the Security and Compliance Group; (iii) the Data Center Management Group is now known as the Storage and Server Management Group; and (iv) we have moved the Backup Exec products to the Storage and Server Management Group from the Security and Data Management Group. There were no changes to the Consumer, Services, or Other segments. The new business structure more directly aligns the operating segments with markets and customers, and we believe will establish more direct lines of reporting responsibilities, speed decision making, and enhance the ability to pursue strategic growth opportunities. Data shown from the prior periods have been reclassified to match the current reporting structure. (3) Other includes product lines nearing the end of their life cycle. See Item 15, Footnote 15 in our March 2007 10-K. (4) The Americas includes the United States, Latin America, and Canada.
8
Slide 9: SYMANTEC CORPORATION Condensed Consolidated Balance Sheets (In thousands) (Unaudited) March 31, 2008 ASSETS Current assets: Cash and cash equivalents Short-term investments Trade accounts receivable, net Inventories Current deferred income taxes Other current assets Total current assets Property and equipment, net Acquired product rights, net Other intangible assets, net Goodwill Investment in joint venture Other long-term assets Long-term deferred income taxes Total assets LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable Accrued compensation and benefits Current deferred revenue Other current liabilities Income taxes payable Short-term borrowing Short-term convertible debentures Total current liabilities Convertible senior notes Long-term deferred revenue Long-term deferred tax liabilities Long-term income taxes payable Other long-term liabilities Total Liabilities Stockholders’ equity: Common stock Additional paid-in capital Accumulated other comprehensive income Retained earnings Total stockholders’ equity Total liabilities and stockholders' equity $ 1,890,225 536,728 758,200 34,138 193,775 316,852 3,729,918 1,001,750 648,950 1,243,524 11,207,357 150,000 55,291 55,304 18,092,094 $ December 31, 2007 1,484,489 500,107 901,615 34,591 171,198 282,598 3,374,598 1,039,510 733,278 1,299,083 11,208,960 53,661 58,455 17,767,545 $ September 30, 2007 1,388,364 627,478 601,837 32,735 172,422 206,840 3,029,676 1,125,560 788,884 1,315,003 10,948,364 59,264 49,998 17,316,749 $ June 30, 2007 1,374,049 660,543 568,721 34,666 163,146 279,828 3,080,953 1,113,315 925,595 1,411,713 10,969,774 62,959 57,300 17,621,609 $ March 31, 2007 2,559,034 428,619 666,968 42,183 165,323 208,920 4,071,047 1,092,240 909,878 1,245,638 10,340,348 63,987 27,732 17,750,870 $ December 31, 2006 2,592,003 382,519 744,766 43,804 145,687 205,205 4,113,984 1,114,018 992,638 1,295,445 10,344,055 65,601 28,547 17,954,288 $ September 30, 2006 2,607,786 343,489 563,608 43,010 119,490 189,787 3,867,170 1,062,354 1,067,766 1,339,779 10,326,629 66,462 14,868 17,745,028 $ June 30, 2006 3,685,517 409,216 540,552 42,830 132,387 191,836 5,002,338 1,098,629 1,150,352 1,390,258 10,329,888 59,272 11,552 19,042,289
$
$
$
$
$
$
$
$
$
169,631 431,345 2,661,515 264,832 72,263 200,000 3,799,586 2,100,000 415,054 219,341 478,743 106,187 7,118,911 8,393 9,139,084 159,792 1,665,914 10,973,183 18,092,094
$
162,871 410,171 2,497,697 231,686 78,997 200,000 3,581,422 2,100,000 379,476 219,778 459,126 98,662 6,838,464 8,452 9,207,367 199,488 1,513,774 10,929,081 17,767,545
$
169,422 324,236 2,265,575 191,500 40,520 2,991,253 2,100,000 333,022 277,041 424,595 85,419 6,211,330 8,650 9,495,987 195,814 1,404,968 11,105,419 17,316,749
$
165,715 307,202 2,330,411 224,416 13,056 3,040,800 2,100,000 334,364 358,010 414,322 38,647 6,286,143 8,813 9,740,361 189,725 1,396,567 11,335,466 17,621,609
$
149,131 307,824 2,387,733 234,915 238,486 3,318,089 2,100,000 366,050 343,848 21,370 6,149,357 8,994 10,061,144 182,933 1,348,442 11,601,513 17,750,870
$
198,622 298,286 2,199,844 182,760 338,049 3,217,561 2,100,000 359,357 226,864 22,118 5,925,900 9,275 10,511,659 184,479 1,322,975 12,028,388 17,954,288
$
166,844 263,415 1,990,193 169,515 260,183 2,850,150 2,100,000 335,162 244,324 21,470 5,551,106 9,413 10,759,857 174,900 1,249,752 12,193,922 17,745,028
$
161,938 258,697 2,021,949 170,572 360,681 518,200 3,492,037 2,100,000 283,385 233,230 26,320 6,134,972 9,875 11,552,839 172,651 1,171,952 12,907,317 19,042,289
$
$
$
$
$
$
$
$
9
Slide 10: SYMANTEC CORPORATION Reconciliation of GAAP deferred revenue to Non-GAAP deferred revenue (in thousands) (Unaudited)
Balances as of: Deferred revenue reconciliation GAAP deferred revenue Add back: Deferred revenue related to acquisitions (1) Non-GAAP deferred revenue
Jun 30, 2006 $ 2,305,334 35,247 2,340,581 $
Sep 30, 2006 2,325,355 22,263 2,347,618 $
Dec 31, 2006 2,559,201 25,448 2,584,649 $
Mar 31, 2007 2,753,783 17,958 2,771,741 $
Jun 30, 2007 2,664,775 44,007 2,708,782 $
Sep 30, 2007 2,598,597 25,888 2,624,485 $
Dec 31, 2007 2,877,173 19,856 2,897,029 $
Mar 31, 2008 3,076,569 11,662 3,088,231
$
$
$
$
$
$
$
$
We include certain non-GAAP revenue and deferred revenue components in the tracking and forecasting of our revenue and management of our business. This includes non-GAAP revenue associated with deferred revenue that was excluded as a result of purchase accounting adjustments related to acquisitions. We believe the non-GAAP deferred revenue measures set forth above are useful to investors, and such items are used by our management, because this revenue is reflective of our ongoing operating results. (1) We have completed numerous business combinations and acquisitions for a variety of strategic purposes over the past several years. As is the case with our existing business, at the time of acquisition, these acquired businesses had recorded deferred revenue related to past transactions for which revenue would be recognized in future periods as revenue recognition criteria are satisfied. The purchase accounting entries for these acquisitions require us to write down a portion of this deferred revenue to its then current fair value. Consequently, in post acquisition periods, we do not recognize the full amount of this deferred revenue. When measuring the performance of our business, however, we add back certain types of deferred revenue that were excluded as a result of these purchase accounting adjustments, as we believe that this provides information about the operating impact of the acquired businesses in a manner consistent with the revenue recognition for our preexisting products and services. We believe that the inclusion of this deferred revenue provides useful information to our management as well as to investors.
10
Slide 11: Symantec Corporation Trended Cash Flow Statements (In thousands) (Unaudited) Fiscal 2008 OPERATING ACTIVITIES: Net income Adjustments to reconcile net income to net cash provided by operating activities Depreciation and amortization Stock−based compensation expense Impairment of equity investments Write-down of assets Deferred income taxes Income tax benefit from the exercise of stock options Excess income tax benefit from the exercise of stock options Loss (gain) on sale of assets Net (gain) on settlements of litigation Other Net change in assets and liabilities, excluding effects of acquisitions: Trade accounts receivable, net Inventories Accounts payable Accrued compensation and benefits Deferred revenue Income taxes payable Other Net cash provided by operating activities INVESTING ACTIVITIES: Purchase of property and equipment Proceeds from sale of property and equipment Purchase of intangible assets Cash payments for business acquisitions, net of cash and cash equivalents acquired Investment in Joint Venture Purchases of available-for-sale securities Proceeds from sales of available-for-sale securities Net cash (used in) provided by investing activities FINANCING ACTIVITIES: Sale of common stock warrants Repurchase of common stock Net proceeds from issuance of common stock under employee stock plans Proceeds from debt issuance Purchase of bond hedge Proceeds from short-term borrowing Excess income tax benefit from the exercise of stock options Repayment of other long-term liability Tax payments related to restricted stock issuance Net cash used in financing activities Effect of exchange rate fluctuations on cash and cash equivalents Increase in cash and cash equivalents Beginning cash and cash equivalents Ending cash and cash equivalents Supplemental schedule of non-cash transactions: Issuance of common stock, stock options, and restricted stock units for business acquisitions Supplemental cash flow disclosures: Income taxes paid (net of refunds) during the year Interest expense paid during the year
######################
Quarter Ended 31-Mar-08
############################
Quarter Ended 31-Dec-07 $ 131,890 $
Quarter Ended 30-Sep-07 50,368 $
Quarter Ended 30-Jun-07 95,206 $
Fiscal 2007 404,380 $
Quarter Ended 31-Mar-07 60,894 $
Quarter Ended 31-Dec-06 116,770 $
Quarter Ended 30-Sep-06 126,182 $
Quarter Ended 30-Jun-06 100,534
$
463,850
$
186,386
824,109 163,695 1,000 1,200 (180,215) 29,443 (26,151) 97,463 (58,500) (894) (7,002) 10,791 667 97,133 126,716 150,919 124,429 1,818,653 (273,807) 104,715 (1,162,455) (150,000) (1,233,954) 1,189,283 (1,526,218) (1,499,995) 224,152 200,000 26,151 (11,724) (4,137) (1,065,553) 104,309 (668,809) 2,559,034 1,890,225
205,705 42,544 1,000 (1,568) 1,713 (7,844) 1,522 (58,500) (894) 158,390 1,567 13,916 13,339 117,250 (64,543) 64,387 674,370 (64,678) 104,715 (11,772) (150,000) (408,850) 358,380 (172,205) (200,019) 59,990 7,844 (1,811) (395) (134,391) 37,962 405,736 1,484,489 1,890,225
0.80
200,911 39,417 1,200 (74,747) 10,462 (4,778) 6,319 (284,378) (1,273) (20,896) 84,212 238,479 84,026 51,161 462,005 (71,100) (298,397) (184,534) 332,517 (221,514) (399,992) 33,942 200,000 4,778 (2,309) (692) (164,273) 19,907 96,125 1,388,364 1,484,489
204,048 40,991 (78,781) 7,405 (4,485) 89,622 (22,405) 2,791 (5,035) 16,062 (119,009) 112,044 37,093 330,969 (63,341) (903) (11,718) (340,039) 394,775 (21,226) (399,989) 68,057 4,485 (2,271) (111) (329,829) 34,401 14,315 1,374,049 1,388,364
213,445 40,743 (25,119) 9,863 (9,044) 141,391 7,706 12,682 (16,480) (110,004) 19,392 (28,212) 351,309 (74,688) 903 (840,568) (300,531) 103,611 (1,111,273) (499,995) 62,163 9,044 (5,333) (2,939) (437,060) 12,039 (1,184,985) 2,559,034 1,374,049
811,443 153,880 2,841 11,173 43,118 (25,539) (19,937) 912 33,714 10,324 (25,623) 23,169 399,517 (181,926) 24,789 1,666,235 (419,749) 121,464 (13,300) (33,373) (226,905) 349,408 (222,455) 326,102 (2,846,312) 230,295 2,067,299 (592,490) 25539 (520,000) (1,309,567) 109,199 243,412 2,315,622 2,559,034
201,967 35,134 90,240 17,477 (5,951) (3,221) (302) 81,169 1,982 (50,696) 11,091 177,989 (94,702) 43,913 566,984 (70,154) 34,560 (8,358) (97,339) 53,950 (87,341) (594,998) 61,039 (463) 5,951 (528,471) 15,859 (32,969) 2,592,003 2,559,034
200,982 36,117 (61,945) 14,798 (13,694) 1,358 (167,072) 185 39,087 28,821 198,900 70,223 (10,159) 454,371 (113,108) (13,300) (20,425) (87,074) 49,490 (184,417) (384,996) 51,274 13,694 (320,028) 34,291 (15,783) 2,607,786 2,592,003
201,618 45,770 20,211 5,705 (4,001) (16,716) (144) (24,449) (313) 2,737 6,097 26,634 (97,362) (15,829) 276,640 (89,413) 86,904 (2,944) (29,809) 98,703 63,441 (974,958) 77,501 4,001 (520,000) (1,413,456) (4,356) (1,077,731) 3,685,517 2,607,786
206,876 36,859 2,841 (37,333) 5,138 (1,893) 144,066 8,470 (16,751) (22,840) (4,006) (60,085) 6,864 368,240 (147,074) (1,646) (12,683) 147,265 (14,138) 326,102 (891,360) 40,481 2,067,762 (592,490) 1,893 952,388 63,405 1,369,895 2,315,622 3,685,517
$
$
$
$
$
$
$
$
$
$
$ $ $
35,054 181,089 22,659
$ $ $
384,771 10,108
11
Slide 12: SYMANTEC CORPORATION Guidance - Reconciliation of Projected GAAP Revenue, Deferred Revenue and Earnings per Share to Non-GAAP Revenue, Deferred Revenue and Earnings per Share (Unaudited)
Three Months Ended: June 30, 2008
Revenue reconciliation (in millions) GAAP revenue range Add back: Deferred revenue related to acquisitions (1) Non-GAAP revenue range
$1,550 - $1,590 5 $1,555 - $1,595
Earnings per share reconciliation GAAP earnings per share range Add back: Stock-based compensation, net of tax (2) Deferred revenue related to acquisitions, amortization of acquired product rights and other intangible assets, and restructuring net of tax Non-GAAP earnings per share range
$0.17 - $0.19 0.04
(1,3,4)
0.13 $0.34 - $0.36
As of :
June 30, 2008
Deferred revenue reconciliation (in millions) GAAP deferred revenue range Add back: Deferred revenue related to acquisitions (1) Non-GAAP deferred revenue range
$2,905 - $3,005 5 $2,910 - $3,010
We believe the presentation of these non-GAAP financial measures, when taken together with the corresponding GAAP financial measures, provide meaningful supplemental information regarding the Company's operating performance by excluding certain items that may not be indicative of the Company's core business, operating results or future outlook. Our management uses, and believes that investors benefit from referring to, these non-GAAP financial measures in assessing the Company's operating results both as a consolidated entity and at the business unit level, as well as when planning, forecasting and analyzing future periods. We believe that these non-GAAP financial measures also facilitate comparisons of the Company's performance to prior periods and to our peers. These measures are used by our management for the reasons associated with each of the adjusting items as described below. (1) Fair value adjustment to deferred revenue. We have completed numerous business combinations and acquisitions for a variety of strategic purposes over the past several years. As is the case with our existing business, at the time of acquisition, these acquired businesses recorded deferred revenue related to past transactions for which revenue would be recognized in future periods as revenue recognition criteria are satisfied. The purchase accounting entries for these acquisitions require us to write down a portion of this deferred revenue to its then current fair value. Consequently, in post acquisition periods, we do not recognize the full amount of this deferred revenue. When measuring the performance of our business, however, we add back non-GAAP revenue associated with certain types of deferred revenue that were excluded as a result of these purchase accounting adjustments, as we believe that this provides information about the operating impact of the acquired businesses in a manner consistent with the revenue recognition for our pre-existing products and services. We believe that the inclusion of this revenue and deferred revenue provides useful information to our management as well as to investors. (2) Stock-based compensation. Consists of expenses for employee stock options, restricted stock units, restricted stock awards and our employee stock purchase plan determined in accordance with Statement of Financial Accounting Standards Number 123(R), or SFAS 123(R). When evaluating the performance of our individual business units and developing short and long term plans, we do not consider stock-based compensation charges. Our management team is held accountable for cash-based compensation, but we believe that management is limited in its ability to project the impact of stock-based compensation and accordingly is not held accountable for its impact on our operating results. Although stockbased compensation is necessary to attract and retain quality employees, our consideration of stock based compensation places its primary emphasis on overall shareholder dilution rather than the accounting charges associated with such grants. In addition, for comparability purposes, we believe it is useful to provide a non-GAAP financial measure that excludes stock-based compensation in order to better understand the long-term performance of our core business and to facilitate the comparison of our results to the results of our peer companies. Furthermore, unlike cash compensation, the value of stock-based compensation is determined using a complex formula that incorporates factors, such as market volatility, that are beyond our control. Further, we believe it is useful to investors to understand the impact of SFAS 123(R) to our results of operations. (3) Amortization of acquired product rights and other intangible assets. When conducting internal development of intangible assets, accounting rules require that we expense the costs as incurred. In the case of acquired businesses, however, we are required to allocate a portion of the purchase price to the accounting value assigned to intangible assets acquired and amortize this amount over the estimated useful lives of the acquired intangibles. The acquired company, in most cases, has itself previously expensed the costs incurred to develop the acquired intangible assets, and the purchase price allocated to these assets is not necessarily reflective of the cost we would incur in developing the intangible asset. We eliminate this amortization charge from our non-GAAP operating results to provide better comparability of pre and post-acquisition operating results and comparability to results of businesses utilizing internally developed intangible assets. (4) Restructuring. We have engaged in various restructuring activities over the past several years that have resulted in costs associated with severance, benefits, outplacement services, and excess facilities. Each restructuring has been a discrete event based on a unique set of business objectives or circumstances, and each has differed from the others in terms of its operational implementation, business impact and scope. We do not engage in restructuring activities in the ordinary course of business. While our operations previously benefited from the employees and facilities covered by our various restructuring charges, these employees and facilities have benefited different parts of our business in different ways, and the amount of these charges has varied significantly from period to period. We believe that it is important to understand these charges; however, we do not believe that these charges are indicative of future operating results and that investors benefit from an understanding of our operating results without giving effect to them.
12
