SAN JOSE, CA--(Marketwired - Aug 25, 2016) - Brocade® (NASDAQ: BRCD) today reported financial results for its third fiscal quarter ended July 30, 2016. These results include approximately two months of financial results from Ruckus Wireless, which was acquired on May 27, 2016. Brocade reported third quarter revenue of $591 million, up 7% year-over-year and up 13% quarter-over-quarter. The Company reported GAAP diluted earnings per share (EPS) of $0.02, down from $0.21 in Q3 2015 and from $0.11 in Q2 2016. The year-over-year and sequential declines in GAAP EPS were primarily the result of acquisition-related items, including the lower gross margin associated with acquired inventory and deferred revenue, acquisition and integration costs, and increases in the amortization of intangible assets and stock-based compensation. These items were partially offset by the favorable resolution of a tax audit. Non-GAAP diluted EPS was $0.21 for Q3 2016, down 21% year-over-year and down 2% quarter-over-quarter. The year-over-year decline in non-GAAP EPS was primarily due to the acquisition-related purchase accounting adjustments, unfavorable revenue mix, and higher operating expenses.

"Against the backdrop of a mixed macro environment, we posted solid results, with total revenue at the high end of our outlook range," said Lloyd Carney, CEO of Brocade. "During Q3, we also continued the momentum of new product innovations across our portfolio, building a solid foundation for business growth and expansion of our addressable markets. Furthermore, with the successful completion of our acquisition of Ruckus Wireless in the quarter, we are pleased to welcome this talented and committed team to the Brocade family. Our combined strengths open up new opportunities and distinguish Brocade as a pure-play networking company for the digital transformation era."

Key Financial Metrics:

 Q3 2016  Q2 2016  Q3 2015  Q3 2016 vs. Q2 2016  Q3 2016 vs. Q3 2015
Revenue $ 591 M   $ 523 M   $ 552 M   13 %   7 %
GAAP EPS--diluted $ 0.02     $ 0.11     $ 0.21     (77 %)   (89 %)
Non-GAAP EPS--diluted $ 0.21     $ 0.22     $ 0.27     (2 %)   (21 %)
GAAP gross margin 60.4 %   66.9 %   67.4 %   (6.5 ) pts   (7.0 ) pts
Non-GAAP gross margin 66.5 %   68.2 %   68.6 %   (1.8 ) pts   (2.1 ) pts
GAAP operating margin 3.5 %   15.8 %   21.7 %   (12.3 ) pts   (18.2 ) pts
Non-GAAP operating margin 19.5 %   22.4 %   26.9 %   (2.9 ) pts   (7.4 ) pts

Please see important note of explanation about the use of non-GAAP financial measures below, including a detailed reconciliation between GAAP and non-GAAP information in the tables included herein.

Highlights:

  • On May 27, 2016, Brocade completed the acquisition of Ruckus Wireless, Inc., enhancing Brocade's position as a pure-play networking company with solutions spanning from the heart of the data center to the wireless network edge.
  • SAN product revenue of $282 million was down 9% year-over-year. The year-over-year decline was primarily the result of lower Fibre Channel director sales, which decreased 23%, partially offset by fixed-configuration switch sales which increased 3%. Sequentially, SAN product revenue decreased 5%, with directors declining 20%, partially offset by fixed-configuration and embedded switch sales growing 7% and 8%, respectively. The year-over-year and sequential declines in our SAN director revenue were primarily the result of a longer time to closure for many large deals, while the improvement in our switch revenue was primarily due to pull-through demand from all-flash array deployments. Overall, the decline in our SAN product revenue is consistent with commentary from many of our OEM partners regarding the weaker storage demand environment.
  • During the quarter, Brocade launched the Brocade X6 Director, the industry's first Gen 6 Fibre Channel director for mission-critical storage connectivity. This highly reliable, high-performance, low-latency solution is specifically designed for all-flash data centers. It extends the company's leadership in offering the industry's most innovative and widely deployed Fibre Channel storage networking solutions.
  • IP Networking product revenue of $209 million, including $73 million of product revenue from Ruckus Wireless, was up 36% year-over-year. The increase was due to the acquisition of Ruckus Wireless, partially offset by lower U.S. federal revenue, which was down 26% year-over-year, primarily due to the timing of large orders. Sequentially, IP Networking product revenue increased 59% due primarily to the inclusion of Ruckus revenue.

Board Declares Dividend:

  • The Brocade Board of Directors has declared a regular third fiscal quarter cash dividend of $0.055 per share of the Company's common stock. The dividend payment will be made on October 3, 2016, to stockholders of record at the close of market on September 9, 2016.

Brocade management will host a conference call to discuss the fiscal third quarter results and the fiscal fourth quarter outlook today at 2:30 p.m. PT (5:30 p.m. ET). To access the webcast, please go to www.brcd.com/events.cfm. A replay of the conference call, prepared comments and slides, as well as a written transcript, will be available at www.brcd.com.

Other Q3 2016 product, customer, and partner announcements are available at http://newsroom.brocade.com/.

Brocade (www.brocade.com)
130 Holger Way, San Jose, CA 95134
T. 408.333.8000 F. 408.333.8101

Financial Highlights and Additional Financial Information

 Q3 2016  Q2 2016  Q3 2015
Routes to market as a % of total net revenues:          
  OEM revenues 54 %   63 %   62 %
  Channel/Direct revenues 46 %   37 %   38 %
           
  10% or greater customer revenues 23 %   30 %   43 %
Geographic split as a % of total net revenues (1):          
  Domestic revenues 52 %   53 %   57 %
  International revenues 48 %   47 %   43 %
Segment split as a % of total net revenues:          
  SAN product revenues 48 %   57 %   56 %
  IP Networking product revenues 35 %   25 %   28 %
  Global Services revenues 17 %   18 %   16 %
           
  SAN business revenues (2) 57 %   67 %   66 %
  IP Networking business revenues (2) 43 %   33 %   34 %
Additional information:Q3 2016  Q2 2016  Q3 2015
  GAAP net income $ 10 M   $ 43 M   $ 92 M
  Non-GAAP net income $ 92 M   $ 89 M   $ 115 M
  GAAP operating income $ 21 M   $ 83 M   $ 120 M
  Non-GAAP operating income $ 115 M   $ 117 M   $ 149 M
  GAAP effective tax rate (20.8 %)   41.6 %   17.4 %
  Non-GAAP effective tax rate 14.2 %   20.8 %   20.1 %
  Cash and cash equivalents $ 1,153 M   $ 1,428 M   $ 1,320 M
  Deferred revenues $ 345 M   $ 305 M   $ 301 M
  Capital expenditures $ 17 M   $ 19 M   $ 19 M
  Cash provided by operations $ 28 M   $ 112 M   $ 55 M
  Days sales outstanding 43 days   36 days   33 days
  Employees at end of period 5,948   4,724   4,626
  SAN port shipments 0.9 M   0.8 M   0.9 M
  Share repurchases $ 660.7 M   $ 36.4 M   $ 103.1 M
                         

Please see important note of explanation about the use of non-GAAP financial measures below, including a detailed reconciliation between GAAP and non-GAAP information in the tables included herein.

(1) Revenues are attributed to geographic areas based on known product delivery location. Since some OEM partners take delivery of Brocade products domestically and then ship internationally to their end users, the percentage of international revenues based on end-user location would likely be higher.
(2) SAN and IP Networking business revenues include hardware and software product, support, and services revenues.
   

Non-GAAP Financial Measures
To supplement financial information presented on a GAAP basis, Brocade provides information presented on a non-GAAP basis. These non-GAAP financial measures include non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating margin, non-GAAP operating income, non-GAAP tax rate, non-GAAP net income, non-GAAP EPS and adjusted free cash flow. These non-GAAP financial measures are not computed in accordance with, or as an alternative to, financial information presented on a GAAP basis. The presentation of this additional information is not meant to be considered in isolation or as a substitute for the most directly comparable GAAP measures. The most directly comparable GAAP information and a reconciliation between the GAAP and non-GAAP amounts is provided in the tables at the end of this press release.

Management believes that the non-GAAP financial measures used in this press release allow management to gain a better understanding of Brocade's comparative operating performance, both from period to period and relative to its competitors. These non-GAAP financial measures also help with the determination of Brocade's baseline performance before gains, losses or charges that are considered by management to be outside of ongoing operating results. Accordingly, management uses these non-GAAP financial measures for planning and forecasting of future periods and in making decisions regarding operations and the allocation of resources.

Management believes these non-GAAP financial measures, when read in conjunction with Brocade's GAAP financials, provide useful information to investors by offering:

  • the ability to make more meaningful period-to-period comparisons of Brocade's ongoing operating results;
  • the ability to make more meaningful comparisons of Brocade's operating performance relative to its competitors;
  • the ability to better identify trends in Brocade's underlying business and to perform related trend analyses; and
  • a better understanding of how management plans and measures Brocade's underlying business.

In determining non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating margin, non-GAAP operating income, non-GAAP tax rate, non-GAAP net income and non-GAAP EPS, management excludes certain gains or losses and benefits or costs that are the result of infrequent events or events that arise outside the ordinary course of Brocade's continuing operations. Management believes that it is appropriate to evaluate Brocade's operating performance by excluding those items that are not indicative of ongoing operating results or limit comparability. Such items include, but are not limited to: (i) impact to cost of revenues from purchase accounting adjustments to inventory; (ii) acquisition and integration costs; (iii) restructuring and other related benefits; and (iv) effects of certain intercompany transactions on the tax provision.

Management also excludes the following non-cash charges in determining these non-GAAP financial measures: (i) stock-based compensation expense; (ii) amortization of purchased intangible assets; and (iii) non-cash interest expense related to the convertible debt.

Management believes that the exclusion of stock-based compensation allows for more accurate comparisons of Brocade's operating results to Brocade's peer companies because of the varying use of valuation methodologies and subjective assumptions and the variety of award types. In addition, the exclusion of the expense associated with the amortization of acquisition-related intangible assets is appropriate because a significant portion of the purchase price for acquisitions may be allocated to intangible assets that have short lives, and the exclusion of amortization expense allows comparisons of operating results that are consistent over time for Brocade's newly acquired and long-held businesses. In connection with the convertible debt, under the relevant accounting guidance, a non-cash interest expense is recognized for the convertible debt as an imputed interest expense for the conversion feature. Management believes excluding the non-cash interest expense related to the convertible debt from its non-GAAP financial measures is useful for investors because the expense does not represent a cash outflow in the respective reporting periods and is not indicative of ongoing operating performance.

Finally, management believes that it is appropriate to exclude the tax effects of the items noted above in order to present a more meaningful measure of non-GAAP net income and non-GAAP EPS.

Limitations: These non-GAAP financial measures have limitations because they do not include all items of income and expense that impact the company. In addition, these non-GAAP financial measures may not be comparable to similar measurements reported by other companies. Management compensates for these limitations by relying primarily on its GAAP results and using non-GAAP financial measures only supplementally. Management also provides robust and detailed reconciliations of each non-GAAP financial measure to its most directly comparable GAAP measure, and management encourages investors to review carefully those reconciliations.

Forward-Looking Statements
This press release contains forward-looking statements including, but not limited to, statements regarding Brocade's financial results, goals, plans, strategy, business outlook and prospects. These statements are based on current expectations as of the date of this press release and involve a number of risks, uncertainties and assumptions that may cause actual results to differ significantly. The risks, uncertainties and assumptions include, but are not limited to: the effect on Brocade of increasing market competition and changes in the industry; the impact on Brocade of conditions in the market for Storage Area Networking products; Brocade's ability to execute on its sales strategy and plans for future operations; the impact on Brocade of macroeconomic trends and events and changes in IT spending levels; Brocade's ability to introduce and achieve market acceptance of new products and support offerings on a timely basis; risks associated with Brocade's international operations; and integration and other risks associated with acquisitions, divestitures and strategic investments. These and other risks are set forth in more detail in Brocade's Form 10-Q for the fiscal quarter ended April 30, 2016, and in Brocade's Annual Report on Form 10-K for the fiscal year ended October 31, 2015. Brocade does not assume any obligation to update or revise any such forward-looking statements whether as the result of new developments or otherwise.

About Brocade
Brocade (NASDAQ: BRCD) networking solutions help the world's leading organizations turn their networks into platforms for business innovation. With solutions spanning public and private data centers to the network edge, Brocade is leading the industry in its transition to the New IP network infrastructures required for today's era of digital business. (www.brocade.com)

Brocade and the B-wing symbol are registered trademarks of Brocade Communications Systems, Inc., in the United States and many other countries. Other brands, products, or service names mentioned herein may be trademarks of Brocade or others. Additional information about Brocade's trademarks is available at: http://www.brocade.com/en/legal/brocade-Legal-intellectual-property/brocade-legal-trademarks.html.

© 2016 Brocade Communications Systems, Inc. All Rights Reserved.

 
BROCADE COMMUNICATIONS SYSTEMS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
 
 Three Months Ended  Nine Months Ended
 July 30,
 2016		  August 1,
 2015		  July 30,
 2016		  August 1,
 2015
 (In thousands, except per share amounts)
Net revenues:              
  Product $ 490,995     $ 463,200     $ 1,400,355     $ 1,407,681  
  Service 99,726     88,619     287,956     266,952  
    Total net revenues 590,721     551,819     1,688,311     1,674,633  
Cost of revenues:              
  Product 188,492     144,243     464,797     431,781  
  Service 45,330     35,672     127,489     109,056  
    Total cost of revenues 233,822     179,915     592,286     540,837  
Gross margin 356,899     371,904     1,096,025     1,133,796  
Operating expenses:              
  Research and development 114,996     85,072     297,516     262,173  
  Sales and marketing 167,983     144,883     468,743     428,199  
  General and administrative 32,960     20,422     78,180     65,815  
  Amortization of intangible assets 5,498     889     7,302     1,654  
  Acquisition and integration costs 14,868     789     20,625     3,133  
  Restructuring and other related benefits --     --     (566 )   (637 )
    Total operating expenses 336,305     252,055     871,800     760,337  
Income from operations 20,594     119,849     224,225     373,459  
Interest expense (13,462 )   (9,778 )   (33,282 )   (45,754 )
Interest and other income, net 1,557     947     3,317     854  
Income before income tax 8,689     111,018     194,260     328,559  
Income tax expense (benefit) (1,806 )   19,351     47,034     72,585  
Net income $ 10,495     $ 91,667     $ 147,226     $ 255,974  
Net income per share--basic $ 0.02     $ 0.22     $ 0.36     $ 0.61  
Net income per share--diluted $ 0.02     $ 0.21     $ 0.35     $ 0.59  
Shares used in per share calculation--basic 426,671     417,299     411,709     422,184  
Shares used in per share calculation--diluted 434,416     427,518     419,416     433,303  
               
Cash dividends declared per share $ 0.055     $ 0.045     $ 0.145     $ 0.115  
 
 
 
BROCADE COMMUNICATIONS SYSTEMS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
 
 Three Months Ended  Nine Months Ended
 July 30,
 2016		  August 1,
 2015		  July 30,
 2016		  August 1,
 2015
 (In thousands)
Net income $ 10,495     $ 91,667     $ 147,226     $ 255,974  
Other comprehensive income and loss, net of tax:              
  Unrealized gains (losses) on cash flow hedges:              
    Change in unrealized gains and losses (700 )   (414 )   (1,035 )   (2,332 )
    Net gains and losses reclassified into earnings 482     831     1,831     2,544  
  Net unrealized gains (losses) on cash flow hedges (218 )   417     796     212  
  Foreign currency translation adjustments (1,628 )   (492 )   (1,760 )   (5,781 )
Total other comprehensive loss (1,846 )   (75 )   (964 )   (5,569 )
Total comprehensive income $ 8,649     $ 91,592     $ 146,262     $ 250,405  
 
 
 
BROCADE COMMUNICATIONS SYSTEMS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
 
 July 30,
 2016		  October 31,
 2015
 (In thousands, except par value)
ASSETS      
Current assets:      
  Cash and cash equivalents $ 1,153,074     $ 1,440,882  
  Accounts receivable, net of allowances for doubtful accounts of $3,836 and $1,838 as of July 30, 2016, and October 31, 2015, respectively 278,180     235,883  
  Inventories 81,182     40,524  
  Deferred tax assets --     78,675  
  Prepaid expenses and other current assets 86,922     56,235  
    Total current assets 1,599,358     1,852,199  
Property and equipment, net 459,812     439,224  
Goodwill 2,324,315     1,617,161  
Intangible assets, net 434,921     75,623  
Non-current deferred tax assets 3,918     813  
Other assets 51,441     51,133  
    Total assets $ 4,873,765     $ 4,036,153  
LIABILITIES AND STOCKHOLDERS' EQUITY      
Current liabilities:      
  Accounts payable $ 121,093     $ 98,143  
  Accrued employee compensation 134,471     142,075  
  Deferred revenue 257,460     244,622  
  Current portion of long-term debt 76,627     298  
  Other accrued liabilities 111,559     77,226  
    Total current liabilities 701,210     562,364  
Long-term debt, net of current portion 1,516,761     793,779  
Non-current deferred revenue 87,875     72,065  
Non-current income tax liability 100,208     47,010  
Non-current deferred tax liabilities --     24,024  
Other non-current liabilities 6,908     3,376  
    Total liabilities 2,412,962     1,502,618  
Commitments and contingencies      
Stockholders' equity:      
  Preferred stock, $0.001 par value, 5,000 shares authorized, no shares issued and outstanding --     --  
  Common stock, $0.001 par value, 800,000 shares authorized:      
    Issued and outstanding: 400,679 and 413,923 shares as of July 30, 2016, and October 31, 2015, respectively 401     414  
  Additional paid-in capital 1,475,709     1,632,984  
  Accumulated other comprehensive loss (25,966 )   (25,002 )
  Retained earnings 1,010,659     925,139  
    Total stockholders' equity 2,460,803     2,533,535  
    Total liabilities and stockholders' equity $ 4,873,765     $ 4,036,153  
 
 
 
BROCADE COMMUNICATIONS SYSTEMS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 Nine Months Ended
 July 30,
 2016		  August 1,
 2015
 (In thousands)
Cash flows from operating activities:      
  Net income $ 147,226     $ 255,974  
  Adjustments to reconcile net income to net cash provided by operating activities:      
    Excess tax benefits from stock-based compensation (1,778 )   (41,981 )
    Depreciation and amortization 80,979     62,569  
    Loss on disposal of property and equipment 458     1,620  
    Net gain on sale of investments (122 )   --  
    Amortization of debt issuance costs and debt discount 13,493     9,443  
    Write-off of debt discount and debt issuance costs related to lenders that did not participate in refinancing --     4,808  
    Provision (recovery) for doubtful accounts receivable and sales allowances (1,946 )   7,189  
    Non-cash purchase accounting adjustments to inventory 20,775     --  
    Non-cash stock-based compensation expense 88,805     64,594  
  Changes in assets and liabilities, net of acquisitions:      
    Accounts receivable 988     17,959  
    Inventories 5,601     (1,778 )
    Prepaid expenses and other assets (9,725 )   (20,854 )
    Deferred tax assets (109 )   531  
    Accounts payable 5,519     2,266  
    Accrued employee compensation (57,520 )   (94,852 )
    Deferred revenue 5,359     (14,220 )
    Other accrued liabilities (43,874 )   16,478  
    Restructuring liabilities (1,223 )   (2,514 )
      Net cash provided by operating activities 252,906     267,232  
Cash flows from investing activities:      
  Purchases of non-marketable equity and debt investments (2,000 )   (2,150 )
  Proceeds from maturities and sale of short-term investments 150,323     --  
  Proceeds from sale of non-marketable equity investment --     1,489  
  Purchases of property and equipment (59,810 )   (53,142 )
  Purchase of intangible assets --     (7,750 )
  Net cash paid in connection with acquisitions (564,888 )   (95,452 )
  Proceeds from collection of note receivable 250     250  
      Net cash used in investing activities (476,125 )   (156,755 )
Cash flows from financing activities:      
  Payment of principal related to senior secured notes --     (300,000 )
  Payment of debt issuance costs (891 )   (1,718 )
  Payment of principal related to capital leases (282 )   (1,677 )
  Common stock repurchases (841,562 )   (312,601 )
  Proceeds from issuance of common stock 49,195     51,345  
  Payment of cash dividends to stockholders (61,706 )   (48,819 )
  Proceeds from term loan 787,255     --  
  Proceeds from convertible notes --     565,656  
  Purchase of convertible note hedge --     (86,135 )
  Proceeds from issuance of warrants --     51,175  
  Proceeds from noncontrolling interests 2,550     --  
  Excess tax benefits from stock-based compensation 1,778     41,981  
      Net cash used in financing activities (63,663 )   (40,793 )
  Effect of exchange rate fluctuations on cash and cash equivalents (926 )   (5,030 )
  Net increase (decrease) in cash and cash equivalents (287,808 )   64,654  
  Cash and cash equivalents, beginning of period 1,440,882     1,255,017  
  Cash and cash equivalents, end of period $ 1,153,074     $ 1,319,671  
 
 
 
BROCADE COMMUNICATIONS SYSTEMS, INC.
RECONCILIATION BETWEEN GAAP AND NON-GAAP FINANCIAL MEASURES
(Unaudited)
 Three Months Ended
 July 30,
 2016		  April 30,
 2016		  August 1,
 2015
 (In thousands, except per share amounts)
Non-GAAP adjustments          
  Stock-based compensation expense included in cost of revenues $ 5,965     $ 3,531     $ 3,955  
  Amortization of intangible assets expense included in cost of revenues 8,922     3,193     2,549  
  Purchase accounting adjustments to inventory 20,775     --     --  
    Total gross margin impact from non-GAAP adjustments 35,662     6,724     6,504  
           
  Stock-based compensation expense included in research and development 9,206     5,123     5,226  
  Stock-based compensation expense included in sales and marketing 17,756     11,052     10,601  
  Stock-based compensation expense included in general and administrative 11,716     5,083     4,655  
  Amortization of intangible assets expense included in operating expenses 5,498     902     889  
  Acquisition and integration costs 14,868     5,757     789  
    Total operating income impact from non-GAAP adjustments 94,706     34,641     28,664  
           
  Convertible debt interest 3,871     3,824     3,684  
  Effects of certain intercompany transactions on the tax provision 7,436     13,670     --  
  Income tax effect of non-GAAP adjustments (24,506 )   (6,329 )   (9,494 )
    Total net income impact from non-GAAP adjustments $ 81,507     $ 45,806     $ 22,854  
           
Gross margin reconciliation          
  GAAP gross margin $ 356,899     $ 350,311     $ 371,904  
  Total gross margin impact from non-GAAP adjustments 35,662     6,724     6,504  
    Non-GAAP gross margin $ 392,561     $ 357,035     $ 378,408  
  GAAP gross margin, as a percentage of total net revenues 60.4 %   66.9 %   67.4 %
  Non-GAAP gross margin, as a percentage of total net revenues 66.5 %   68.2 %   68.6 %
           
Operating income reconciliation          
  GAAP operating income $ 20,594     $ 82,665     $ 119,849  
  Total operating income impact from non-GAAP adjustments 94,706     34,641     28,664  
    Non-GAAP operating income $ 115,300     $ 117,306     $ 148,513  
  GAAP operating income, as a percentage of total net revenues 3.5 %   15.8 %   21.7 %
  Non-GAAP operating income, as a percentage of total net revenues 19.5 %   22.4 %   26.9 %
           
Net income and net income per share reconciliation          
  Net income on a GAAP basis $ 10,495     $ 43,085     $ 91,667  
  Total net income impact from non-GAAP adjustments 81,507     45,806     22,854  
    Non-GAAP net income $ 92,002     $ 88,891     $ 114,521  
           
  GAAP net income per share--basic $ 0.02     $ 0.11     $ 0.22  
  Total impact on net income per share--basic from non-GAAP adjustments 0.20     0.11     0.05  
    Non-GAAP net income per share--basic $ 0.22     $ 0.22     $ 0.27  
           
  GAAP net income per share--diluted $ 0.02     $ 0.11     $ 0.21  
  Total impact on net income per share--diluted from non-GAAP adjustments 0.19     0.11     0.06  
  Non-GAAP net income per share--diluted $ 0.21     $ 0.22     $ 0.27  
           
  Shares used in GAAP and non-GAAP per share calculation--basic 426,671     400,554     417,299  
  Shares used in GAAP and non-GAAP per share calculation--diluted 434,416     408,748     427,518  
           
Effective tax rate reconciliation          
  GAAP effective tax rate (20.8 )%   41.6 %   17.4 %
  Tax impact from effects of certain intercompany transactions on the tax provision (15.2 )%   (38.7 )%   --  
  Tax impact from non-GAAP adjustments 50.2 %   17.9 %   2.7 %
    Non-GAAP effective tax rate 14.2 %   20.8 %   20.1 %