SanDisk 2012 Annual Report Download - page 153

This is a TAB type table. Insert
conts here. Annual Report
Non-GAAP Financial Measures
Reconciliation of Net Income.
Fiscal years ended
December 30,
2012
January 1,
2012
January 2,
2011
(In millions except shares and per share amounts)
Net income ................................................ $ 417.4 $ 987.0 $ 1,300.1
Share-based compensation ................................ 78.4 63.1 77.6
Amortization and write-off of acquisition-related intangible
assets ............................................... 52.4 44.2 14.2
Convertible debt interest .................................. 90.0 111.4 68.9
Income tax adjustments ................................... (55.8) (67.7) (360.5)
Non-GAAP net income ....................................... $ 582.4 $ 1,138.0 $ 1,100.3
Diluted net income per share: .................................. $ 1.70 $ 4.04 $ 5.44
Share-based compensation ................................ 0.32 0.26 0.32
Amortization and write-off of acquisition-related intangible
assets ............................................... 0.21 0.18 0.06
Convertible debt interest .................................. 0.37 0.45 0.29
Income tax adjustments ................................... (0.22) (0.28) (1.51)
Non-GAAP diluted net income per share: ........................ $ 2.38 $ 4.65 $ 4.60
Shares used in computing diluted net income per share (in thousands):
GAAP ................................................ 245,253 244,553 238,901
Non-GAAP ............................................ 245,199 244,568 239,042
We believe that providing this additional information is useful in enabling the investor to better assess and
understand operating performance, especially when comparing results with previous periods or forecasting
performance for future periods, primarily because management typically monitors the business excluding these
items. We also use these non-GAAP measures to establish operational goals and for measuring performance for
compensation purposes. However, analysis of results on a non-GAAP basis should be used as a complement to,
and in conjunction with, and not as a replacement for, data presented in accordance with GAAP.
We believe that the presentation of non-GAAP measures, including non-GAAP net income and non-GAAP
diluted net income per share, provides important supplemental information to management and investors about
financial and business trends relating to our operating results. We believe that the use of these non-GAAP
financial measures also provides consistency and comparability with our past financial reports.
We have historically used these non-GAAP measures when evaluating operating performance because we
believe that the inclusion or exclusion of the items described below provides an additional measure of our core
operating results and facilitates comparisons of our core operating performance against prior periods and our
business model objectives. We have chosen to provide this information to investors to enable them to perform
additional analyses of past, present and future operating performance and as a supplemental means to evaluate
our ongoing core operations. Externally, we believe that these non-GAAP measures continue to be useful to
investors in their assessment of our operating performance and their valuation of our company.
Internally, these non-GAAP measures are significant measures used by us for purposes of:
• evaluating our core operating performance;
• establishing internal budgets;
• setting and determining variable compensation levels;
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