(1) Stock-based compensation expense is calculated in
accordance with the fair value recognition provisions of Financial
(2) Payroll tax on stock-based compensation represents the
incremental cost for employer payroll taxes on stock option
exercises and restricted stock units vested and released.
(3) The intangible assets recorded at fair value as a
result of our acquisition are amortized over the estimated useful
life of the respective asset.
(4) The inventory fair value adjustment recorded pursuant
to our acquisition is excluded from our non-GAAP operating
expenses as this cost would not have otherwise occurred in the
(5) We incurred expenses in connection with our
acquisitions, which would not have otherwise occurred in the
period presented as part of our operating expenses; therefore,
these costs or credits are excluded from our non-GAAP operating
(6) Business combination accounting rules require us to
account for the fair value of deferred revenue assumed in
connection with an acquisition. The non-GAAP adjustment is
intended to reflect the full amount of support and service revenue
that would have otherwise been recorded by the acquired entity.
(7) The non-GAAP tax rate excludes the income tax effects
of non-GAAP adjustments. Additionally, the non-GAAP tax rate
includes adjustments to our tax valuation allowance on deferred
tax assets and excludes the interim tax cost of the one-time
transfer of intellectual property rights between our legal
(8) We incurred expenses, including revaluation of the
contingent consideration, in connection with our acquisitions,
which would not have otherwise occurred in the period presented as
part of our other income (expense); therefore, these costs are
excluded from our non-GAAP operating expenses.