Verisign provides quarterly and annual financial statements that are prepared in accordance with generally accepted accounting principles (GAAP). Along with this information, we typically disclose and discuss certain non-GAAP financial information in our quarterly earnings release, on investor conference calls and during investor conferences and related events. This non-GAAP financial information does not include the following types of financial measures that are included in GAAP: discontinued operations, stock-based compensation, amortization of other intangible assets, impairments of goodwill and other intangible assets, restructuring charges, contingent interest payments to holders of our Convertible Debentures, unrealized gain/loss on contingent interest derivative on Convertible Debentures, and non-cash interest expense. Non-GAAP financial information is also adjusted for a 28 percent tax rate starting from the third quarter of 2012 and 30 percent for all other periods presented herein, both of which differ from the GAAP tax rate.
Management believes that this non-GAAP financial data supplements our GAAP financial data by providing investors with additional information that allows them to have a clearer picture of the Company's operations. The presentation of this additional information is not meant to be considered in isolation nor as a substitute for results prepared in accordance with GAAP. We believe that the non-GAAP information enhances the investors' overall understanding of our financial performance and the comparability of the company's operating results from period to period. Above, we have provided a reconciliation of the non-GAAP financial information that we provide each quarter with the comparable financial information reported in accordance with GAAP for the given period.
SUPPLEMENTAL FINANCIAL INFORMATION
The following table presents the classification of stock-based compensation:
Three Months Ended December 31, 2012 2011 ----------- -----------Cost of revenues $ 1,275 $ 1,376Sales and marketing 1,045 1,206Research and development 1,832 961General and administrative 2,819 3,622 ----------- -----------Total stock-based compensation expense $ 6,971 $ 7,165 =========== =========== VERISIGN, INC. STATEMENTS OF OPERATIONS RECONCILIATION (In thousands, except per share data) (Unaudited) Year Ended Year Ended December 31, 2012 December 31, 2011 ------------------- ------------------- Operating Net Operating Net Income Income Income Income --------- -------- --------- --------GAAP as reported $ 457,327 $320,032 $ 329,389 $142,891 Discontinued operations (7,547) (4,335) Adjustments: Stock-based compensation 33,362 33,362 37,571 37,571 Amortization of other intangible assets 1,321 1,321 1,293 1,293 Restructuring charges (765) (765) 15,512 15,512 Contingent interest payment to holders of Convertible Debentures -- 100,020 Unrealized (gain)loss on contingent interest derivative on Convertible Debentures (422) 1,125 Non-cash interest expense 7,370 6,540 Tax adjustment (30,860) (51,663) --------- -------- --------- --------Non-GAAP as adjusted $ 491,245 $322,491 $ 383,765 $248,954 ========= ======== ========= ========Revenues $ 873,592 $ 771,978Non-GAAP operating margin 56.2% 49.7% ========= =========Diluted shares 163,909 166,887Per diluted share, non-GAAP as adjusted $ 1.97 $ 1.49 ======== ========
Verisign provides quarterly and annual financial statements that are prepared in accordance with generally accepted accounting principles (GAAP). Along with this information, we typically disclose and discuss certain non-GAAP financial information in our quarterly earnings release, on investor conference calls and during investor conferences and related events. This non-GAAP financial information does not include the following types of financial measures that are included in GAAP: discontinued operations, stock-based compensation, amortization of other intangible assets, impairments of goodwill and other intangible assets, restructuring charges, contingent interest payments to holders of our Convertible Debentures, unrealized gain/loss on contingent interest derivative on Convertible Debentures, and non-cash interest expense. Non-GAAP financial information is also adjusted for a 28 percent tax rate starting from the third quarter of 2012 and 30 percent for all other periods presented herein, both of which differ from the GAAP tax rate.
Management believes that this non-GAAP financial data supplements our GAAP financial data by providing investors with additional information that allows them to have a clearer picture of the Company's operations. The presentation of this additional information is not meant to be considered in isolation nor as a substitute for results prepared in accordance with GAAP. We believe that the non-GAAP information enhances the investors' overall understanding of our financial performance and the comparability of the company's operating results from period to period. Above, we have provided a reconciliation of the non-GAAP financial information that we provide each quarter with the comparable financial information reported in accordance with GAAP for the given period.
SUPPLEMENTAL FINANCIAL INFORMATION
The following table presents the classification of stock-based compensation:
Year Ended December 31, 2012 2011 ----------- -----------Cost of revenues $ 5,754 $ 6,655Sales and marketing 6,091 6,062Research and development 6,023 4,926General and administrative 15,494 19,928Restructuring charges -- 5,701 ----------- -----------Total stock-based compensation expense $ 33,362 $ 43,272 =========== ===========
