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ANNEX A
Non-GAAP Financial Measures
Reconciliation Operating Income and Margin
Fiscal years ended
December 29, December 30, January 1, January 2, January 3,
2013 2012 2012 2011 2010
(In millions)
GAAP Operating Income ................ $ 1,562 $ 696 $ 1,530 $ 1,462 $ 519
Share-based compensation ............... 100 78 63 78 96
Amortization of acquisition-related intangible
assets ............................ 61 52 44 14 14
Impairment of acquisition-related intangible
assets ............................ 83 1———
Non-GAAP Operating Income ............ $ 1,806 $ 827 $ 1,637 $ 1,553 $ 629
Fiscal years ended
December 29, December 30, January 1, January 2, January 3,
2013 2012 2012 2011 2010
GAAP Operating Margin ................ 25% 14% 27% 30% 15%
Share-based compensation ............... 2% 2% 1% 2% 3%
Amortization of acquisition-related intangible
assets ............................ 1% 1% 1% —% —%
Impairment of acquisition-related intangible
assets ............................ 1% % —% —% —%
Non-GAAP Operating Margin ............ 29% 16% 29% 32% 18%
We believe these non-GAAP measures provide investors the ability 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.
A-1
Proxy Statement