SanDisk 2009 Annual Report Download - page 100

Non-GAAP Financial Measures
Reconciliation of Net Income (Loss).
Twelve months ended
January 3,
2010
December 28,
2008
December 30,
2007
(In thousands except per share amounts)
Net income (loss) attributable to common stockholders ............ $ 415,310 $(1,986,624) $ 190,616
Share-based compensation .............................. 95,560 97,799 133,010
Impairment of goodwill and acquisition-related intangible
assets ............................................. — 1,021,238 —
Amortization of acquisition-related intangible assets .......... 13,696 71,581 90,117
Inventory step-up expense related to msystems acquisition ..... — — 7,066
Convertible debt interest ................................ 54,454 49,340 45,758
Income tax adjustments ................................. (151,813) 280,692 (58,458)
Non-GAAP net income (loss) attributable to common stockholders . . $ 427,207 $ (465,974) $ 408,109
Diluted net income (loss) attributable to common stockholders per
share: ................................................. $ 1.79 $ (8.82) $ 0.81
Share-based compensation .............................. 0.41 0.43 0.56
Impairment of goodwill and acquisition-related intangible
assets ............................................. — 4.53 —
Amortization of acquisition-related intangible assets .......... 0.06 0.32 0.38
Inventory step-up expense related to msystems acquisition ..... — — 0.03
Convertible debt interest ................................ 0.23 0.22 0.19
Income tax adjustments ................................. (0.65) 1.25 (0.24)
Non-GAAP diluted net income (loss) attributable to common
stockholders per share: ................................... $ 1.84 $ (2.07) $ 1.73
Shares used in computing diluted net income (loss) attributable to
common stockholders per share:
GAAP .............................................. 231,959 225,292 235,857
Non-GAAP .......................................... 232,300 225,292 236,614
Management believes that providing this additional information is useful to 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. Management also uses 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.
Management believes that the presentation of non-GAAP measures, including net income (loss) and
non-GAAP net income (loss) per diluted share, provides important supplemental information to management and
investors about financial and business trends relating to the company’s results of operations. Management
believes that the use of these non-GAAP financial measures also provides consistency and comparability with
our past financial reports.
Management has 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 the company.
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