Attached files
| file | filename |
|---|---|
| EX-99.1 - EXHIBIT 99.1 - NetApp, Inc. | exh99_1.htm |
| 8-K - NETAPP, INC. 8-K - NetApp, Inc. | netapp8k.htm |
Exhibit
99.2
NetApp Q4 and FY10
Earnings Results
Supplemental
Commentary
May 26,
2010
The
information in this written commentary, which was historically presented during
our live conference call, is now being provided to the investment community
concurrently with our press release to allow for additional time for review and
analysis prior to commencement of the live call. Please note that these prepared
remarks will not be read during the call. The live call will focus on strategic
commentary from the CEO and CFO, followed by Q&A.
Safe
Harbor Statement
These
prepared remarks contain forward-looking statements and projections that involve
risk and uncertainty, including statements regarding our
financial performance for the fourth quarter of fiscal 2010. Actual
results may differ materially from our statements or projections. Factors that
could cause actual results to differ from our projections include, but are not
limited to, customer demand for our products and services; our ability to
increase revenue and manage our operating costs; increased competition risks
associated with the anticipated growth in the networked storage market; our
ability to deliver new product architectures and enterprise service offerings;
our ability to design products and services that compete effectively from a
price and performance perspective; our reliance on a limited number of
suppliers; and our ability to accurately forecast demand for our products. Other
equally important factors are detailed in our accompanying press release as well
as in our 10-K and 10-Q reports on file with the SEC and also available on our
website, all of which are incorporated by reference into today’s
commentary.
All
numbers stated herein are stated in accordance with U.S. Generally Accepted
Accounting Principles (GAAP) unless stated otherwise. To see the reconciling
items between our non-GAAP and GAAP financial information, refer to the table at
the end of this document, as well as in our press release and on our
website.
Fiscal
2010 Highlights
In fiscal
2010, NetApp achieved company records in several categories, including revenue,
income from operations, and net income per share.
Year over
Year Overview
|
FY2010
|
FY20091
|
Year/Year
Growth
|
|
|
Non-GAAP
Net Revenue
|
$3,931M
|
$3,535M
|
11%
|
|
Non-GAAP
Gross Margin
|
65.0%
|
61.1%
|
|
|
Non-GAAP
Operating Expenses
|
$1,923M
|
$1,749M
|
10%
|
|
Non-GAAP
Income from Operations
|
$631M
|
$409M
|
54%
|
|
Non-GAAP
Operating Margin
|
16.1%
|
11.6%
|
|
|
Non-GAAP
Net Income per Share, Diluted
|
$1.51
|
$1.09
|
39%
|
Fiscal
year 2010 revenue was $3.93 billion, an 11% increase over FY2009 net revenue.
Non-GAAP gross margins were 65%, up from 61.1% in FY 2009, due to a favorable
revenue mix as well as favorable trends in materials cost for low-end and
mid-range systems. Non-GAAP operating expenses were up 10% year over
year. We returned to our targeted non-GAAP operating margin of
approximately 16%, up from our FY2009 operating margin of 11.6%. These
improvements in profitability are reflected in our non-GAAP net income per
share, which rose 39% from $1.09 in FY 2009 to $1.51 in FY2010.
1 GAAP revenue in FY2009 was $3,406 million,
Non-GAAP revenue in FY2009 excludes the impact of the $129 million GSA
settlement
Q4 Fiscal
2010 Overview
In the
fourth quarter, NetApp achieved record performance in revenue, income from
operations, net income per share, deferred revenue, cash flow from operations,
and units shipped. As customers increasingly turn to server
virtualization and the benefits of cloud computing to reduce IT costs, they are
choosing NetApp for the storage efficiency and flexibility we provide as they
begin to re-architect their data centers for a virtual future.
Revenue
|
Q4
FY10 Revenue
|
%
of Q4 FY10 Revenue
|
Sequential Growth2
|
Year/Year
Growth
|
|
|
Product
Revenue
|
$759M
|
65%
|
23%
|
50%
|
|
Software
Entitlements
&
Maintenance
|
$174M
|
15%
|
2%
|
6%
|
|
Service
|
$239M
|
20%
|
8%
|
14%
|
|
Net
Revenue
|
$1,172M
|
100%
|
16%
|
33%
|
Revenue
for the fourth quarter was $1.17 billion, increasing 16% sequentially and 33%
year over year. Foreign currency effects3 decreased our
sequential results by approximately one percentage point and increased our year
over year growth rate by approximately two percentage points.
2 Sequential growth calculation based upon
Q3FY10 results, which can be found at www.investor.netapp.com
3 Foreign currency effects represent the
translation effect of changes in average foreign exchange rates between the
current period and the comparative prior periods (or, in the case of deferred
revenue, the exchange rate in effect when the transaction was invoiced), less
current period actual net gains or losses on revenue hedging activities.
Product
revenue grew 23% sequentially and increased 50% year over year to $759 million.
The product component of our revenue mix increased to 65% of total revenue, up
strongly from 61% last quarter.
Revenue
from software entitlements and maintenance (SEM), which is a deferred revenue
element and is recognized ratably over the related contract period, was $174
million, or 15% of total revenue. SEM was up 2% sequentially and up 6% year over
year, reflecting the slower business growth rates of prior
periods. Product revenue growth can be viewed as a leading indicator
for future SEM revenue growth. The average contract life on the
balance sheet for SEM is approximately 32 months.
Service
revenue was $239 million, up 8% sequentially and up 14% over 2009 Q4
revenue. Service revenue represented 20% of total revenue and is comprised
mainly of hardware maintenance support contracts and professional
services.
|
·
|
Revenue
from hardware maintenance support contracts, which is also a deferred
revenue element, comprised approximately 62% of our services revenue this
quarter, increasing 5% sequentially and 19% year over
year.
|
|
·
|
The
professional services component of service revenue increased 15%
sequentially and was up 7% year over
year.
|
Gross
Margin
|
Q4
FY10
|
Q3
FY10
|
Q4
FY09
|
|
|
Non-GAAP
Gross Margin
|
64.6%
|
64.2%
|
61.8%
|
|
Product
|
59.7%
|
59.8%
|
52.7%
|
|
S/W
Entitlements & Maintenance
|
98.2%
|
98.3%
|
98.5%
|
|
Services
|
55.8%
|
50.4%
|
55.0%
|
On a
non-GAAP basis, consolidated gross margin was 64.6% of revenue this quarter, a
slight increase from Q3 results. There were no significant changes in
non-GAAP product or SEM gross margins from the prior quarter. Non-GAAP service
margin increased five percentage points sequentially to 55.8%, due primarily to
a seasonal increase in professional services work completed.
Operating
Expenses
|
Q4
FY10
|
Q3
FY10
|
Q4
FY09
|
|
|
Non-GAAP
Operating Expenses
|
$541M
|
$479M
|
$426M
|
Non-GAAP
operating expenses increased 13% sequentially and were up 27% year over year,
totaling $541 million or 46% of revenue in Q4. Headcount increased by a net
of 159 people to 8,333 at the end of the quarter, consistent with our plan to
increase our sales and engineering staff worldwide.
On a GAAP
basis, Q4 operating expenses include $33 million of stock compensation compared
to $32 million in Q3, as well as amortization of intangible assets associated
with prior acquisitions, current period impact of prior restructuring actions
and acquisition related expenses.
Income
from Operations & Other Income
|
Q4
FY10
|
Q3
FY10
|
Q4
FY09
|
|
|
Non-GAAP
Income from Operations
|
$217M
|
$171M
|
$118M
|
|
Non-GAAP
Other Income (Expense), Net
|
$3M
|
$0.33M
|
$4.4M
|
|
Non-GAAP
Income Before Income Taxes
|
$220M
|
$171M
|
$122M
|
|
Non-GAAP
Effective Tax Rate
|
16.6%
|
16.0%
|
16.0%
|
|
Non-GAAP
Net Income
|
$183M
|
$144M
|
$103M
|
|
Non-GAAP
Net Income per Share, Diluted
|
$0.50
|
$0.40
|
$0.31
|
Non-GAAP
income from operations was up 27% sequentially and 84% year over year to $217
million, or 18.5% of revenue, significantly outpacing our target operating
margin of approximately 16%.
Non-GAAP
other income and expense increased to $3 million, primarily due to realized
gains on investments as well as a shift toward longer-term investment
vehicles. GAAP other income (expense) also includes $13 million of
non-cash interest expense associated with our convertible debt.
Non-GAAP
income before income taxes was $220 million or 18.7% of revenue, up from 16.9%
in Q3. Our non-GAAP provision for income tax was $36 million, up from $27
million in Q3, and our effective tax rate increased to 16.6% from our average of
16% in prior quarters due to a year-end true-up. As a result, our
non-GAAP effective tax rate for FY2010 was 16.2%. Our diluted share count
increased sequentially by 4.2 million shares to 365 million shares
outstanding.
Non-GAAP
net income totaled $183 million, or $0.50 per share, another record for
NetApp.
Select
Balance Sheet Items
|
Q4
FY10
|
Q3
FY10
|
Q4FY09
|
|
|
Cash,
Cash Equivalents & Investments
|
$3.7B
|
$3.2B
|
$2.6B
|
|
Deferred
Revenue
|
$1.9B
|
$1.8B
|
$1.7B
|
|
DSO
(days)4
|
37
|
41
|
46
|
|
Inventory
Turns5
|
14.7
|
20.2
|
22.1
|
During
Q4, our cash and short term investments grew by $491 million, ending the quarter
at $3.7 billion, up 15% sequentially and up 43% year over year. Of
this Q4 FY10 balance, 56% was in the United States.
The total
deferred revenue balance of $1.9 billion reflects a sequential increase of
approximately $120 million this quarter and a 12% increase in the balance year
over year.
With
respect to DSO, accounts receivable days sales outstanding were 37 days this
quarter, compared to 41 days last quarter and 46 days in Q4 last
year. The strong DSO performance is attributable to record collection
efforts on the part of our accounts receivables team. At the end of Q4, 93% of
our receivables balance was current. Inventory turns were down from 20.2
turns in Q3 to 14.7 turns, a side effect of the rapid growth we are experiencing
and the unpredictable spot shortages of some parts.
Select
Cash Flow Statement Items
|
Q4
FY10
|
Q3
FY10
|
Q4
FY09
|
|
|
Net
Cash Provided by Operating Activities
|
$475M
|
$195M
|
$196M
|
|
Purchases
of Property and Equipment
|
$38M
|
$50M
|
$135M
|
|
Free
Cash Flow6
|
$436M
|
$145M
|
$61M
|
|
Free
Cash Flow as % of Net Revenue
|
37%
|
14%
|
7%
|
Net cash
provided by operating activities was $475 million, more than doubling both
sequentially and year over year, primarily due to strong growth in net income,
increased deferred revenue, and well managed receivables. Capital
expenditures were about $38 million, down from $50 million last
quarter.
Free cash
flow totaled $436 million, over three times higher than Q3 levels. Expressed as
a percent of revenue, Q4 free cash flow was 37% of net revenue, well above our
average range.
Q1
FY11 Outlook
|
Q1
FY11 Outlook
|
|
|
Revenue
|
$1,100M
– $1,140M
|
|
Share
Count
|
Approximately
370M
|
|
Non-GAAP
Net Income per Share, Diluted
|
$0.43
- $0.47
|
|
GAAP
Net Income per Share, Diluted
|
$0.31
- $0.35
|
This
forecast is based on current business expectations and current market
conditions.
Other Business Metrics
6 Free cash
flow is defined as net cash provided by operating activities less cash purchases
of property and equipment
Geographic
Mix
|
%
of Q4 FY10 Revenue
|
Q4
FY10 Revenue
|
Year/Year
Growth
|
|
|
Americas
|
54%
|
$639M
|
34%
|
|
U.S. Public Sector
|
11%
|
$133M
|
30%
|
|
EMEA
|
36%
|
$419M
|
32%
|
|
AsiaPacific
|
10%
|
$113M
|
31%
|
The
Americas generated revenue of $639 million, up 11% sequentially and up 34% year
over year, contributing 54% of total revenue. Included in the Americas numbers,
the US Public Sector Team delivered 11% of total revenue, which was seasonally
down by approximately 7% sequentially, though up 30% year over
year.
EMEA
revenue increased 24% sequentially and 32% year over year to $419 million,
comprising 36% of total revenue. AsiaPacific revenue was $113 million, an
increase of 14% sequentially and 31% year over year, for a total of 10% of
revenue this quarter.
Channel
Mix
Both our
direct and indirect channels posted increases in revenue during the fourth
quarter. Consistent with our strategy, our indirect channel continues to grow
faster than our direct channel. Direct revenue was 29% of total
revenue, increasing 10% sequentially and 19% year over year. Indirect
revenues, generated by channel and OEM partners, contributed 71% of total
revenues in the quarter. Indirect revenues increased 19% sequentially
and 40% over Q4 last year. Within the indirect channel, Arrow
continued last quarter’s record pace of 16% of total revenue, while Avnet was
down slightly to 11% of revenue from last quarter’s record of 12% of revenue.
Revenue from the IBM OEM partnership was 3% of total revenue, up 2% over their
absolute dollar contribution in Q4 last year.
Customer
Dynamics
This
quarter’s top 100 accounts contributed approximately 42% of total Q4 revenue,
about the same level as in Q3FY10. In FY10 we added 121 net new
Storage50007
accounts, down modestly from the record high number added in FY09.
Protocol
Trends
|
Q4
FY09
|
Q1
FY10
|
Q2
FY10
|
Q3
FY10
|
Q4FY10
|
|
|
NAS
|
47%
|
51%
|
48%
|
42%
|
41%
|
|
SAN
|
14%
|
15%
|
19%
|
15%
|
16%
|
|
Unified
|
39%
|
35%
|
34%
|
42%
|
42%
|
For over
eight years, NetApp has been shipping storage systems which support multiple
protocols concurrently on every system—a capability called Unified Storage. We
have shipped over 150,000 Unified Storage systems since we pioneered this
innovation in 2002. This quarter the unified storage percentage of our
configured system product revenue continued at record levels.
We
continue to actively bundle and sell more of our systems in a Unified
configuration. In addition, since all of our systems enable the use of multiple
protocols for applications, we have found that our installed base usage
profiles—especially for protocols— frequently changes after installation, while
the system configuration sold does not. As a result, we have come to the
conclusion that trying to partition our revenues across the traditional NAS and
SAN categories at time of shipment it is no longer meaningful, therefore this
will be the last quarter in which we provide the data in the chart
above.
Platform
Trends
Total
system units shipped grew 10% sequentially again this quarter and also increased
52% over Q4 last year. The standout growth segment this quarter was our
mid-range, which grew 36% sequentially and 40% year over year. Sales
of high-end units were also up strongly this quarter, growing 27% sequentially
and 48% year over year. While low end units were down modestly from
last quarter’s record levels, they were up 61% over Q4 of last
year.
7 The
Storage 5000 is a proprietary NetApp list of companies we believe to be the
5,000 largest buyers of storage worldwide
Our
V-Series platform, which is our controller and data management software without
any disks, reached a milestone 5,000 units shipped since inception this quarter.
Units of V-Series shipped were up 80% sequentially and over 230% higher year
over year.
Capacity
Trends
|
(in
Petabytes)
|
Q4
FY09
|
Q1
FY10
|
Q2
FY10
|
Q3
FY10
|
Q4
FY10
|
|
Fibre
Channel
|
72
|
69
|
79
|
88
|
99
|
|
ATA
|
165
|
175
|
173
|
209
|
298
|
|
SAS
|
8
|
7
|
8
|
29
|
49
|
|
Total
|
245
|
250
|
260
|
326
|
445
|
Total
petabytes shipped grew 37% sequentially and 82% year over year to 445 petabytes.
The mix of drive capacity continued to trend toward SAS and ATA, with ATA
remaining by far the largest segment as customers utilize our efficiency
features to get more out of our storage on less expensive drives.
Additional
Information
For more
detailed information about our solutions, corporate strategy and our
go-to-market initiatives, please visit our website at
www.netapp.com.
NetApp
Usage of Non-GAAP Financials
The
Company refers to the non-GAAP financial measures cited above in making
operating decisions because they provide meaningful supplemental information
regarding the Company's operational performance. Non-GAAP operating results and
net income exclude the GSA settlement, amortization of intangible
assets, stock-based compensation expenses, acquisition related income
and expenses, restructuring and other charges, asset impairments, non-cash
interest expense associated with our convertible debt, net losses or gains on
investments, and our GAAP tax provision, including discrete items, but includes
a non-GAAP tax provision based upon projected annual non-GAAP effective tax
rates for the first three quarters of the fiscal year and an actual non-GAAP
provision for the fourth quarter. We have excluded these items in order to
enhance investors’ understanding of our ongoing operations. The use of
these non-GAAP financial measures has material limitations because they should
not be used to evaluate our company without reference to their
corresponding GAAP financial measures. As such, we compensate for these material
limitations by using these non-GAAP financial measures in conjunction
with GAAP financial measures.
These
non-GAAP financial measures are used to: (1) measure company performance against
historical results, (2) facilitate comparisons to our competitors’ operating
results, and (3) allow greater transparency with respect to information used by
management in financial and operational decision making. In addition,
these non-GAAP financial measures are used to measure company performance for
the purposes of determining employee incentive plan compensation.
Non-GAAP
to GAAP Reconciliation
|
NETAPP,
INC.
|
||||||||||||
|
RECONCILIATION
OF NON-GAAP AND GAAP
|
||||||||||||
|
IN
THE CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
|
||||||||||||
|
(In
millions, except net income per share amounts)
|
||||||||||||
|
(Unaudited)
|
||||||||||||
|
Three
Months Ended
|
||||||||||||
|
April
30, 2010
|
April
24, 2009
|
January
29, 2010
|
||||||||||
|
SUMMARY RECONCILIATION OF NET
INCOME
|
||||||||||||
|
NET
INCOME
|
$ | 145.1 | $ | 68.4 | $ | 107.9 | ||||||
|
Adjustments:
|
||||||||||||
|
GSA
settlement
|
- | 0.7 | - | |||||||||
|
Amortization
of intangible assets
|
4.9 | 5.7 | 4.9 | |||||||||
|
Stock-based
compensation expenses
|
37.8 | 42.2 | 36.6 | |||||||||
|
Restructuring
and other charges
|
(0.2 | ) | 35.5 | 0.1 | ||||||||
|
Acquisitions
related (income) expense, net
|
1.2 | - | - | |||||||||
|
Non-cash
interest expense
|
13.1 | 11.0 | 12.4 | |||||||||
|
(Gain)
loss on investments, net
|
(1.2 | ) | 2.6 | (0.7 | ) | |||||||
|
Discrete
GAAP tax provision items
|
(13.1 | ) | 6.5 | 0.6 | ||||||||
|
Income
tax effect
|
(4.5 | ) | (69.8 | ) | (18.0 | ) | ||||||
|
NON-GAAP
NET INCOME
|
$ | 183.1 | $ | 102.8 | $ | 143.8 | ||||||
|
DETAILED RECONCILIATION OF SPECIFIC
ITEMS:
|
||||||||||||
|
TOTAL
NET REVENUES
|
$ | 1,171.8 | $ | 879.6 | $ | 1,011.7 | ||||||
|
Adjustment:
|
||||||||||||
|
GSA
settlement
|
- | 0.7 | - | |||||||||
|
NON-GAAP
TOTAL NET REVENUES
|
$ | 1,171.8 | $ | 880.3 | $ | 1,011.7 | ||||||
|
COST
OF REVENUES
|
$ | 423.3 | $ | 345.7 | $ | 370.1 | ||||||
|
Adjustment:
|
||||||||||||
|
Amortization
of intangible assets
|
(4.1 | ) | (4.9 | ) | (4.1 | ) | ||||||
|
Stock-based
compensation expenses
|
(4.8 | ) | (4.9 | ) | (4.3 | ) | ||||||
|
NON-GAAP
COST OF REVENUES
|
$ | 414.4 | $ | 335.9 | $ | 361.7 | ||||||
|
COST
OF PRODUCT REVENUES
|
$ | 310.9 | $ | 245.2 | $ | 253.9 | ||||||
|
Adjustment:
|
||||||||||||
|
Amortization
of intangible assets
|
(4.1 | ) | (4.9 | ) | (4.1 | ) | ||||||
|
Stock-based
compensation expenses
|
(1.3 | ) | (1.0 | ) | (1.0 | ) | ||||||
|
NON-GAAP
COST OF PRODUCT REVENUES
|
$ | 305.5 | $ | 239.3 | $ | 248.8 | ||||||
|
COST
OF SERVICE REVENUES
|
$ | 109.3 | $ | 98.1 | $ | 113.3 | ||||||
|
Adjustment:
|
||||||||||||
|
Stock-based
compensation expenses
|
(3.5 | ) | (3.9 | ) | (3.3 | ) | ||||||
|
NON-GAAP
COST OF SERVICE REVENUES
|
$ | 105.8 | $ | 94.2 | $ | 110.0 | ||||||
|
GROSS
PROFIT
|
$ | 748.5 | $ | 533.9 | $ | 641.5 | ||||||
|
Adjustment:
|
||||||||||||
|
GSA
settlement
|
- | 0.7 | - | |||||||||
|
Amortization
of intangible assets
|
4.1 | 4.9 | 4.1 | |||||||||
|
Stock-based
compensation expenses
|
4.8 | 4.9 | 4.3 | |||||||||
|
NON-GAAP
GROSS PROFIT
|
$ | 757.4 | $ | 544.4 | $ | 649.9 | ||||||
|
SALES
AND MARKETING EXPENSES
|
$ | 366.7 | $ | 287.3 | $ | 324.8 | ||||||
|
Adjustments:
|
||||||||||||
|
Amortization
of intangible assets
|
(0.8 | ) | (0.8 | ) | (0.8 | ) | ||||||
|
Stock-based
compensation expenses
|
(16.9 | ) | (20.1 | ) | (17.2 | ) | ||||||
|
NON-GAAP
SALES AND MARKETING EXPENSES
|
$ | 349.0 | $ | 266.4 | $ | 306.8 | ||||||
|
RESEARCH
AND DEVELOPMENT EXPENSES
|
$ | 143.7 | $ | 125.0 | $ | 129.3 | ||||||
|
Adjustments:
|
||||||||||||
|
Stock-based
compensation expenses
|
(9.0 | ) | (11.3 | ) | (8.9 | ) | ||||||
|
NON-GAAP
RESEARCH AND DEVELOPMENT EXPENSES
|
$ | 134.7 | $ | 113.7 | $ | 120.4 | ||||||
|
GENERAL
AND ADMINISTRATIVE EXPENSES
|
$ | 64.2 | $ | 52.2 | $ | 58.1 | ||||||
|
Adjustments:
|
||||||||||||
|
Stock-based
compensation expenses
|
(7.1 | ) | (5.9 | ) | (6.2 | ) | ||||||
|
NON-GAAP
GENERAL AND ADMINISTRATIVE EXPENSES
|
$ | 57.1 | $ | 46.3 | $ | 51.9 | ||||||
|
OPERATING
EXPENSES
|
$ | 575.6 | $ | 500.0 | $ | 512.2 | ||||||
|
Adjustments:
|
||||||||||||
|
Amortization
of intangible assets
|
(0.8 | ) | (0.8 | ) | (0.8 | ) | ||||||
|
Stock-based
compensation expenses
|
(33.0 | ) | (37.3 | ) | (32.3 | ) | ||||||
|
Restructuring
and other charges
|
0.2 | (35.5 | ) | (0.1 | ) | |||||||
|
Acquisitions
related (income) expense, net
|
(1.2 | ) | - | - | ||||||||
|
NON-GAAP
OPERATING EXPENSES
|
$ | 540.8 | $ | 426.4 | $ | 479.0 | ||||||
|
INCOME
FROM OPERATIONS
|
$ | 172.9 | $ | 33.9 | $ | 129.3 | ||||||
|
Adjustments:
|
||||||||||||
|
GSA settlement
|
- | 0.7 | - | |||||||||
|
Amortization
of intangible assets
|
4.9 | 5.7 | 4.9 | |||||||||
|
Stock-based
compensation expenses
|
37.8 | 42.2 | 36.6 | |||||||||
|
Restructuring
and other charges
|
(0.2 | ) | 35.5 | 0.1 | ||||||||
|
Acquisitions
related (income) expense, net
|
1.2 | - | - | |||||||||
|
NON-GAAP
INCOME FROM OPERATIONS
|
$ | 216.6 | $ | 118.0 | $ | 170.9 | ||||||
|
TOTAL
OTHER INCOME (EXPENSES), NET
|
$ | (9.0 | ) | $ | (9.2 | ) | $ | (11.4 | ) | |||
|
Adjustments:
|
||||||||||||
|
Non-cash
interest expense
|
13.1 | 11.0 | 12.4 | |||||||||
|
(Gain)
loss on investments, net
|
(1.2 | ) | 2.6 | (0.7 | ) | |||||||
|
NON-GAAP
TOTAL OTHER INCOME (EXPENSES), NET
|
$ | 2.9 | $ | 4.4 | $ | 0.3 | ||||||
|
INCOME
BEFORE INCOME TAXES
|
$ | 163.9 | $ | 24.7 | $ | 117.9 | ||||||
|
Adjustments:
|
||||||||||||
|
GSA
settlement
|
- | 0.7 | - | |||||||||
|
Amortization
of intangible assets
|
4.9 | 5.7 | 4.9 | |||||||||
|
Stock-based
compensation expenses
|
37.8 | 42.2 | 36.6 | |||||||||
|
Restructuring
and other charges
|
(0.2 | ) | 35.5 | 0.1 | ||||||||
|
Acquisitions
related (income) expense, net
|
1.2 | - | - | |||||||||
|
Non-cash
interest expense
|
13.1 | 11.0 | 12.4 | |||||||||
|
(Gain)
loss on investments, net
|
(1.2 | ) | 2.6 | (0.7 | ) | |||||||
|
NON-GAAP
INCOME BEFORE INCOME TAXES
|
$ | 219.5 | $ | 122.4 | $ | 171.2 | ||||||
|
PROVISION
FOR (BENEFIT FROM) INCOME TAXES
|
$ | 18.8 | $ | (43.7 | ) | $ | 10.0 | |||||
|
Adjustments:
|
||||||||||||
|
Discrete
GAAP tax provision items
|
13.1 | (6.5 | ) | (0.6 | ) | |||||||
|
Income
tax effect
|
4.5 | 69.8 | 18.0 | |||||||||
|
NON-GAAP
PROVISION FOR INCOME TAXES
|
$ | 36.4 | $ | 19.6 | $ | 27.4 | ||||||
|
NET
INCOME PER SHARE
|
$ | 0.398 | $ | 0.205 | $ | 0.299 | ||||||
|
Adjustments:
|
||||||||||||
|
GSA settlement
|
- | 0.002 | - | |||||||||
|
Amortization
of intangible assets
|
0.013 | 0.017 | 0.013 | |||||||||
|
Stock-based
compensation expenses
|
0.104 | 0.127 | 0.102 | |||||||||
|
Restructuring
and other charges
|
(0.001 | ) | 0.106 | - | ||||||||
|
Acquisitions
related (income) expense, net
|
0.003 | - | - | |||||||||
|
Non-cash
interest expense
|
0.036 | 0.033 | 0.035 | |||||||||
|
(Gain)
loss on investments, net
|
(0.003 | ) | 0.008 | (0.002 | ) | |||||||
|
Discrete
GAAP tax provision items
|
(0.036 | ) | 0.020 | 0.002 | ||||||||
|
Income
tax effect
|
(0.012 | ) | (0.210 | ) | (0.050 | ) | ||||||
|
NON-GAAP
NET INCOME PER SHARE
|
$ | 0.502 | $ | 0.308 | $ | 0.399 |
Reg G Schedule
|
NETAPP,
INC.
|
|
|
RECONCILIATION
OF NON GAAP GUIDANCE TO GAAP
|
|
|
EXPRESSED
AS EARNINGS PER SHARE
|
|
|
FIRST
QUARTER 2011
|
|
|
(Unaudited)
|
|
|
First
Quarter
|
|
|
2011
|
|
|
Non-GAAP
Guidance
|
$0.43
- $0.47
|
|
Adjustments
of Specific Items to
|
|
|
Net
Income Per Share for the First
|
|
|
Quarter
2011:
|
|
|
Stock
based compensation expense
|
(0.11)
|
|
Amortization
of intangible assets
|
(0.01)
|
|
Non
cash interest expense
|
(0.03)
|
|
Income
tax effect
|
0.03
|
|
Total
Adjustments
|
(0.12)
|
|
GAAP
Guidance -Net Income Per Share
|
$0.31
- $0.35
|
