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NetApp Announces Results for Third Quarter Fiscal Year 2013

Reports Q3 FY'13 Revenues of $1.630 Billion; Non-GAAP Earnings per Share of $0.67

SUNNYVALE, CA -- (Marketwire) -- 02/13/13 -- NetApp (NASDAQ: NTAP) today reported results for the third quarter of fiscal year 2013, which ended January 25, 2013. Revenues for the third quarter of fiscal year 2013 totaled $1.630 billion and were in line with prior guidance. Revenues for the same period a year ago totaled $1.566 billion.

For the third quarter of fiscal year 2013, GAAP net income was $158 million, or $0.43 per share,(1) compared to GAAP net income of $120 million, or $0.32 per share for the same period a year ago. Non-GAAP net income for the third quarter of fiscal year 2013 was $243 million, or $0.67 per share,(2) compared to non-GAAP net income of $216 million, or $0.58 per share for the same period a year ago.

Revenues for the first nine months of fiscal year 2013 totaled $4.616 billion compared to revenues of $4.531 billion for the first nine months of the prior fiscal year. GAAP net income for the first nine months of fiscal year 2013 totaled $332 million, or $0.90 per share, compared to GAAP net income of $425 million, or $1.10 per share for the first nine months of the prior fiscal year. Non-GAAP net income for the first nine months of fiscal year 2013 totaled $588 million, or $1.60 per share, compared to non-GAAP net income of $674 million, or $1.75 per share for the first nine months of the prior fiscal year.

"NetApp delivered solid financial results again this quarter. The value proposition of Data ONTAP® for shared storage infrastructures and the price performance characteristics of the E-series for dedicated storage infrastructures helped drive strong growth in our branded business," said Tom Georgens, president and CEO. "The robust adoption of clustered Data ONTAP, our industry-leading flash portfolio, and our best-of-breed partnerships position us well for continued growth."

Outlook

NetApp's outlook for the fourth quarter of fiscal year 2013 is based on current business expectations, market conditions, and continued uncertainty in the macroeconomic environment.

  • NetApp estimates revenue for the fourth quarter of fiscal year 2013 to be in the range of $1.700 billion to $1.800 billion.
  • NetApp estimates GAAP earnings per share for the fourth quarter of fiscal year 2013 to be approximately $0.43 to $0.48 per share. NetApp estimates non-GAAP earnings per share for the fourth quarter of fiscal year 2013 to be approximately $0.65 to $0.70 per share.
  • NetApp estimates that the share count for the fourth quarter of fiscal year 2013 will increase to approximately 372 million shares.

Business Highlights

During the third quarter of fiscal year 2013, NetApp extended its product and technology innovation leadership, strengthened its alliance ecosystem of strategic best-of-breed partnerships, and continued to be recognized as one of the world's best places to work. On the product front, NetApp announced enhancements to its FAS3000 storage systems and its E-Series platform to address customers' varied workload environments. NetApp also deepened its partnerships with industry leaders Cisco and Citrix, and announced a new integration with Amazon Web Services (AWS). Finally, NetApp became the official data storage provider of the NFL.

Highlights include:
NetApp Acquires ionGrid

  • NetApp has completed the acquisition of ionGrid, a privately-held software company based in Mountain View, Calif. The acquisition provides NetApp customers with a secure, simple to use solution for accessing enterprise file shares from mobile devices. Financial terms of the acquisition are not being disclosed at this time.

FAS and E-Series Innovation Helps Customers Fuel Growth

  • New FAS midrange storage systems provide foundation for agile data infrastructure. The new FAS3220 and FAS3250 systems are flash-enabled and leverage clustered Data ONTAP to address customer requirements for performance and nonstop operations. Both systems help enterprises and midsized businesses that are consolidating operations onto a shared storage platform improve performance by up to 80% and increase storage capacity up to 100% over existing midrange products.
  • Customers accelerate big data innovation and analysis with enhanced E-Series storage platform. The updated E-Series platform includes the addition of SSD cache for improved performance, a broadening of network interface support for the E5400 storage system for increased connectivity and network flexibility, and new mirroring and replication services for greater data protection. The enhanced platform provides customers with the foundation to build innovative storage systems that deliver superior performance for the most challenging big data workloads.

Deeper Integration with Partners Enables Customers to Innovate in the Cloud

  • NetApp and Cisco expand partnership to unify branch office, data center, and public cloud environments with FlexPod® architecture. The partnership expansion includes efforts in technology integration, solution development, and continued go-to-market collaboration to make it easier for customers to deploy and access next-generation cloud infrastructure solutions. The announcement builds on the already strong momentum FlexPod is experiencing with more than 2,100 customers across more than 35 countries and over 700 channel partners.
  • NetApp teams with Amazon Web Services to help customers connect their existing infrastructure to the AWS cloud. NetApp unveiled NetApp® Private Storage for AWS, an enterprise storage solution that allows customers to replicate data from on-premise NetApp storage environments to NetApp Private Storage, and through AWS Direct Connect they can leverage on-demand cloud services. With this solution customers can build an agile cloud infrastructure that balances internal data center resources along with AWS cloud resources to best meet their business needs.
  • NetApp and Citrix collaborate on secure file sharing and on-premise storage solution for enterprise customers. Citrix ShareFile customers now have access to NetApp FAS and V-Series storage systems running clustered Data ONTAP. The new solution will allow customers who store their data on premise to leverage NetApp Data ONTAP software to access data, scale performance and capacity, reduce data center footprint, and reduce costs.

Customers Build on NetApp to Accelerate Business Operations

  • NetApp data storage delivers and protects NFL and Super Bowl XLVII game-day data. Starting with Super Bowl XLVII in New Orleans on February 3, 2013, NetApp kicked off a two-year relationship with the NFL, making NetApp the official data storage provider of the NFL. The NFL will leverage the FAS2220 and FAS2240 storage systems to enable its support of league-wide mission-critical activities.
  • Sauber F1 Team relies on NetApp to thrive in Formula 1 racing. Data is one of the Sauber F1 Teams greatest competitive advantages and as a result the team has built its IT infrastructure on a NetApp storage foundation. The Sauber F1 Team leverages a FlexPod architecture and NetApp MetroCluster™ solution for the reliability, simplicity, efficiency, and high availability required to help drive the team's success.

NetApp Reinforces Its Standing as a Great Place to Work

  • For the second consecutive year, NetApp was ranked #6 on FORTUNE magazine's "100 Best Companies to Work For" list for 2013. This is the fifth consecutive year that NetApp has ranked in the top 10 and seventh consecutive year it has ranked in the top 15.

Webcast and Conference Call Information
The NetApp third quarter fiscal year 2013 conference call will be broadcast live on the Internet at investors.netapp.com on Wednesday, February 13, 2013, at 2:30 p.m. Pacific Time. This press release and any other information related to the call will be posted on the Web site at that location. An audio replay Webcast will be available after 4:30 p.m. Pacific Time on the Web site.

NetApp uses a hybrid format for disclosing key financial information associated with our quarterly results. Concurrent with the press release, NetApp posts a supplemental commentary with financial information and statistics to our Web site at investors.netapp.com.

About NetApp
NetApp creates innovative storage and data management solutions that deliver outstanding cost efficiency and accelerate business breakthroughs. Our commitment to living our core values and consistently being recognized as a great place to work around the world are fundamental to our long-term growth and success, as well as the success of our pathway partners and customers. Discover our passion for helping companies around the world go further, faster at www.netapp.com.

"Safe Harbor" Statement Under U.S. Private Securities Litigation Reform Act of 1995
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements include all of the statements under the Outlook section relating to our forecasts for the fourth quarter of fiscal year 2013, the benefits to us and our customers of our products and services, the expected benefits of partnerships, alliances and acquisitions, and our statements regarding future repurchases of our common stock, all of which involve risk and uncertainty. Actual results may differ materially from our statements and projections for a variety of reasons, including general economic and market conditions; and matters specific to our business, such as customer demand for and acceptance of our products and services. These and other equally important factors are described in reports and documents we file from time to time with the Securities and Exchange Commission (SEC), including the factors described under the sections titled "Risk Factors" in our most recently submitted Annual and Quarterly Reports on Forms 10-K and 10-Q, respectively. We disclaim any obligation to update information contained in these forward-looking statements whether as a result of new information, future events, or otherwise.

NetApp, the NetApp logo, Go further, faster, Data ONTAP, FlexPod, and MetroCluster are trademarks or registered trademarks of NetApp, Inc. All other marks are the property of their respective owners.

(1)GAAP earnings per share is calculated using the diluted number of shares for all periods presented.
(2)Non-GAAP net income excludes the amortization of intangible assets, stock-based compensation, acquisition-related income and expenses, restructuring and other charges, asset impairments, non-cash interest expense associated with our debt, net losses or gains on investments, and our GAAP tax provision, but includes a non-GAAP tax provision based upon our projected annual non-GAAP effective tax rate for the first three quarters of the fiscal year and an actual non-GAAP tax provision for the fourth quarter of the fiscal year. Non-GAAP earnings per share is calculated using the diluted number of shares for all periods presented. A detailed reconciliation of our non-GAAP to GAAP results can be found at http://investors.netapp.com.

NetApp Usage of Non-GAAP Financials
The Company refers to the non-GAAP financial measures cited above in making operating decisions because they provide meaningful supplemental information regarding the Company's ongoing operational performance. Non-GAAP net income excludes the amortization of intangible assets, stock-based compensation, acquisition-related income and expenses, restructuring and other charges, asset impairments, non-cash interest expense associated with our debt, net losses or gains on investments, and our GAAP tax provision, but includes a non-GAAP tax provision based upon our projected annual non-GAAP effective tax rate for the first three quarters of the fiscal year and an actual non-GAAP tax provision for the fourth quarter of the fiscal year. We have excluded these items in order to enhance investors' understanding of our ongoing operations. The use of these non-GAAP financial measures has material limitations because they should not be used to evaluate our Company without reference to their corresponding GAAP financial measures. As such, we compensate for these material limitations by using these non-GAAP financial measures in conjunction with GAAP financial measures.

These non-GAAP financial measures are used to: (1) measure Company performance against historical results, (2) facilitate comparisons to our competitors' operating results, and (3) allow greater transparency with respect to information used by management in financial and operational decision making. In addition, these non-GAAP financial measures are used to measure Company performance for the purposes of determining employee incentive plan compensation. We have historically reported similar non-GAAP financial measures to our investors and believe that the inclusion of comparative numbers provides consistency in our financial reporting at this time.



                                NETAPP, INC.
                    CONDENSED CONSOLIDATED BALANCE SHEETS
                                (In millions)
                                 (Unaudited)

                                           January 25, 2013  April 27, 2012
                                           ---------------- ----------------

                  ASSETS

Current assets:
  Cash, cash equivalents and investments   $        6,723.9 $        5,398.5
  Accounts receivable, net                            633.8            830.9
  Inventories                                         172.9            161.5
  Other current assets                                518.0            435.6
                                           ---------------- ----------------
    Total current assets                            8,048.6          6,826.5

Property and equipment, net                         1,189.2          1,137.2
Goodwill and other intangible assets, net           1,171.9          1,141.2
Other non-current assets                              456.2            427.4
                                           ---------------- ----------------
  Total assets                             $       10,865.9 $        9,532.3
                                           ================ ================


   LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
  Accounts payable                         $          221.2 $          233.1
  Accrued compensation and other current
   liabilities                                        679.2            717.9
  Current portion of long-term debt                 1,243.3          1,202.3
  Short-term deferred revenue                       1,477.3          1,366.5
                                           ---------------- ----------------
    Total current liabilities                       3,621.0          3,519.8
                                           ---------------- ----------------

Long-term debt                                        994.3                -
Other long-term liabilities                           226.9            206.9
Long-term deferred revenue                          1,398.7          1,449.4
                                           ---------------- ----------------
    Total liabilities                               6,240.9          5,176.1
                                           ---------------- ----------------

Convertible Notes                                         -             62.6

Stockholders' equity                                4,625.0          4,293.6
                                           ---------------- ----------------
  Total liabilities and stockholders'
   equity                                  $       10,865.9 $        9,532.3
                                           ================ ================




                                NETAPP, INC.
              CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
             (In millions, except net income per share amounts)
                                (Unaudited)

                                  Three Months Ended     Nine Months Ended
                                 --------------------  --------------------
                                  January    January    January    January
                                  25, 2013   27, 2012   25, 2013   27, 2012
                                 ---------  ---------  ---------  ---------

Revenues:
  Product                        $ 1,060.7  $ 1,062.7  $ 2,954.5  $ 3,044.6
  Software entitlements and
   maintenance                       228.6      203.5      666.5      599.7
  Service                            340.8      299.3      994.9      886.4
                                 ---------  ---------  ---------  ---------
    Net revenues                   1,630.1    1,565.5    4,615.9    4,530.7
                                 ---------  ---------  ---------  ---------

Cost of revenues:
  Cost of product                    512.5      517.8    1,442.0    1,415.9
  Cost of software entitlements
   and maintenance                     7.3        6.2       20.9       17.1
  Cost of service                    145.4      133.0      424.1      379.3
                                 ---------  ---------  ---------  ---------
    Total cost of revenues           665.2      657.0    1,887.0    1,812.3
                                 ---------  ---------  ---------  ---------
Gross profit                         964.9      908.5    2,728.9    2,718.4
                                 ---------  ---------  ---------  ---------

Operating expenses:
  Sales and marketing                493.5      477.0    1,464.6    1,385.9
  Research and development           215.6      208.3      660.8      606.6
  General and administrative          66.2       63.2      198.4      193.4
  Acquisition-related expense          1.7        3.5        1.7        7.4
                                 ---------  ---------  ---------  ---------
    Total operating expenses         777.0      752.0    2,325.5    2,193.3
                                 ---------  ---------  ---------  ---------

Income from operations               187.9      156.5      403.4      525.1

Other expense, net:
  Interest income                     10.3        8.7       32.1       27.6
  Interest expense                   (24.0)     (18.9)     (63.7)     (54.7)
  Other income (expense), net          1.6        0.6        5.9       (0.1)
                                 ---------  ---------  ---------  ---------
    Total other expense, net         (12.1)      (9.6)     (25.7)     (27.2)
                                 ---------  ---------  ---------  ---------

Income before income taxes           175.8      146.9      377.7      497.9

Provision for income taxes            17.7       27.3       46.2       73.2
                                 ---------  ---------  ---------  ---------

Net income                       $   158.1  $   119.6  $   331.5  $   424.7
                                 =========  =========  =========  =========

Net income per share:
  Basic                          $    0.44  $    0.33  $    0.91  $    1.17
                                 =========  =========  =========  =========

  Diluted                        $    0.43  $    0.32  $    0.90  $    1.10
                                 =========  =========  =========  =========

Shares used in net income per
 share calculations:
  Basic                              359.5      360.3      362.5      364.0
                                 =========  =========  =========  =========

  Diluted                            364.7      373.7      368.1      385.1
                                 =========  =========  =========  =========




                                NETAPP, INC.
               CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
                               (In millions)
                                (Unaudited)


                                     Three Months Ended  Nine Months Ended
                                    ------------------- -------------------
                                     January   January   January   January
                                     25, 2013  27, 2012  25, 2013  27, 2012
                                    --------- --------- --------- ---------

Cash flows from operating
 activities:
  Net income                        $   158.1 $   119.6 $   331.5 $   424.7
  Adjustments to reconcile net
   income to net cash provided by
   operating activities:
    Depreciation and amortization        86.4      73.6     255.5     210.5
    Stock-based compensation             67.3      76.7     211.5     197.8
    Accretion of discount and
     issuance costs on debt              15.3      13.5      44.0      38.7
    Shortfall (excess tax benefit)
     from stock-based compensation       (9.4)      4.0     (53.0)    (80.7)
    Other, net                            3.4      (1.9)     (8.3)      2.8
  Changes in assets and
   liabilities, net of acquisitions
   of businesses:
    Accounts receivable                 (19.8)    (59.8)    193.1      55.8
    Inventories                          40.3       9.5     (11.4)     (8.8)
    Accounts payable                    (29.9)    (56.0)    (16.0)    (10.4)
    Accrued compensation and other
     current liabilities                (19.2)     12.6     (35.1)   (160.5)
    Deferred revenue                    105.3     107.6      62.7     234.5
    Changes in other operating
     assets and liabilities, net        (32.7)    (30.2)    (43.8)    (24.4)
                                    --------- --------- --------- ---------
      Net cash provided by
       operating activities             365.1     269.2     930.7     880.0
                                    --------- --------- --------- ---------
Cash flows from investing
 activities:
  Redemptions (purchases) of
   investments, net                     110.7     (61.6)    204.1     (21.2)
  Purchases of property and
   equipment                           (110.7)    (91.3)   (239.7)   (282.9)
  Acquisitions of businesses, net
   of cash acquired                     (89.4)        -     (89.4)   (480.0)
  Other investing activities, net         0.2      (2.0)      3.0         -
                                    --------- --------- --------- ---------
      Net cash used in investing
       activities                       (89.2)   (154.9)   (122.0)   (784.1)
                                    --------- --------- --------- ---------
Cash flows from financing
 activities:
  Issuance of common stock               50.4      49.1      95.5     101.0
  Repurchase and retirement of
   common stock                         (61.7)        -    (410.0)   (600.0)
  Excess tax benefit (shortfall)
   from stock-based compensation          9.4      (4.0)     53.0      80.7
  Issuance of long-term debt, net       987.3         -     987.3         -
  Other financing activities, net        (0.4)      1.5      (0.7)      3.1
                                    --------- --------- --------- ---------
      Net cash provided by (used
       in) financing activities         985.0      46.6     725.1    (415.2)
                                    --------- --------- --------- ---------

Effect of exchange rate changes on
 cash and cash equivalents                4.0      (9.0)     (1.9)    (17.1)

Net increase (decrease) in cash and
 cash equivalents                     1,264.9     151.9   1,531.9    (336.4)
Cash and cash equivalents:
  Beginning of period                 1,816.8   2,269.0   1,549.8   2,757.3
                                    --------- --------- --------- ---------
  End of period                     $ 3,081.7 $ 2,420.9 $ 3,081.7 $ 2,420.9
                                    ========= ========= ========= =========




                                NETAPP, INC.
                    RECONCILIATION OF NON-GAAP AND GAAP
           IN THE CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
             (In millions, except net income per share amounts)
                                (Unaudited)

                                  Three Months Ended     Nine Months Ended
                                 --------------------  --------------------
                                  January    January    January    January
                                  25, 2013   27, 2012   25, 2013   27, 2012
                                 ---------  ---------  ---------  ---------

SUMMARY RECONCILIATION OF NET
 INCOME
NET INCOME                       $   158.1  $   119.6      331.5      424.7

Adjustments:
  Amortization of intangible
   assets                             21.4       21.6       64.3       67.6
  Stock-based compensation            67.3       76.7      211.5      197.8
  Acquisition-related expense          1.7        3.5        1.7       15.4
  Non-cash interest expense           15.3       13.5       44.0       38.7
  Gain on investments                 (0.7)      (0.7)      (0.7)      (0.7)
  Income tax effect of non-GAAP
   adjustments                       (20.4)     (18.2)     (64.2)     (69.7)

                                 ---------  ---------  ---------  ---------
NON-GAAP NET INCOME              $   242.7  $   216.0  $   588.1  $   673.8
                                 =========  =========  =========  =========


NET INCOME PER SHARE             $   0.434  $   0.320      0.901      1.103

Adjustments:
  Amortization of intangible
   assets                            0.059      0.058      0.175      0.175
  Stock-based compensation           0.184      0.205      0.574      0.514
  Acquisition-related expense        0.005      0.010      0.005      0.040
  Non-cash interest expense          0.042      0.036      0.119      0.101
  Gain on investments               (0.002)    (0.002)    (0.002)    (0.002)
  Income tax effect of non-GAAP
   adjustments                      (0.057)    (0.049)    (0.174)    (0.181)

                                 ---------  ---------  ---------  ---------
NON-GAAP NET INCOME PER SHARE    $   0.665  $   0.578  $   1.598  $   1.750
                                 =========  =========  =========  =========


                                 NETAPP, INC.
                           SUPPLEMENTAL INFORMATION
                                (In millions)
                                 (Unaudited)

                                     Three Months Ended January 25, 2013
                               ---------------------------------------------

                                 Amortization of                Acquisition-
                                   Intangible     Stock-based     related
                                     Assets       Compensation    Expense
                                ---------------- ------------- -------------


Cost of product revenues        $           13.9 $         1.4 $           -
Cost of service revenues                       -           4.8             -
Sales and marketing expenses                 7.5          31.9             -
Research and development
 expenses                                      -          20.8             -
General and administrative
 expenses                                      -           8.4             -
Acquisition-related expense                    -             -           1.7
Interest expense                               -             -             -
Other income (expense), net                    -             -             -
                                ---------------- ------------- -------------
Effect on income before income
 taxes                          $           21.4 $        67.3 $         1.7
                                ================ ============= =============



                                  Non-cash
                                  Interest      Gain on
                                   Expense    Investments     Total
                                ------------ ------------  -----------


Cost of product revenues        $          - $          -  $      15.3
Cost of service revenues                   -            -          4.8
Sales and marketing expenses               -            -         39.4
Research and development
 expenses                                  -            -         20.8
General and administrative
 expenses                                  -            -          8.4
Acquisition-related expense                -            -          1.7
Interest expense                        15.3            -         15.3
Other income (expense), net                -         (0.7)        (0.7)
                                ------------ ------------  -----------
Effect on income before income
 taxes                          $       15.3 $       (0.7) $     105.0
                                ============ ============  ===========



                                    Three Months Ended January 27, 2012
                               ---------------------------------------------

                                 Amortization of                Acquisition-
                                   Intangible     Stock-based     related
                                     Assets       Compensation    Expense
                                ---------------- ------------- -------------

Cost of product revenues        $           13.9 $         1.6 $           -
Cost of service revenues                       -           5.7             -
Sales and marketing expenses                 7.6          37.5             -
Research and development
 expenses                                    0.1          22.8             -
General and administrative
 expenses                                      -           9.1             -
Acquisition-related expense                    -             -           3.5
Interest expense                               -             -             -
Other income (expense), net                    -             -             -
                                ---------------- ------------- -------------
Effect on income before income
 taxes                          $           21.6 $        76.7 $         3.5
                                ================ ============= =============



                                  Non-cash
                                  Interest      Gain on
                                   Expense    Investments     Total
                                ------------ ------------  -----------

Cost of product revenues        $          - $          -  $      15.5
Cost of service revenues                   -            -          5.7
Sales and marketing expenses               -            -         45.1
Research and development
 expenses                                  -            -         22.9
General and administrative
 expenses                                  -            -          9.1
Acquisition-related expense                -            -          3.5
Interest expense                        13.5            -         13.5
Other income (expense), net                -         (0.7)        (0.7)
                                ------------ ------------  -----------
Effect on income before income
 taxes                          $       13.5 $       (0.7) $     114.6
                                ============ ============  ===========


                                     Nine Months Ended January 25, 2013
                               ---------------------------------------------

                                 Amortization of                Acquisition-
                                   Intangible     Stock-based     related
                                     Assets       Compensation    Expense
                                ---------------- ------------- -------------


Cost of product revenues        $           41.8 $         4.7 $           -
Cost of service revenues                       -          15.0             -
Sales and marketing expense                 22.4         101.8             -
Research and development
 expense                                     0.1          63.8             -
General and administrative
 expense                                       -          26.2             -
Acquisition-related expense                    -             -           1.7
Interest expense                               -             -             -
Other income (expense), net                    -             -             -
                                ---------------- ------------- -------------
Effect on income before income
 taxes                          $           64.3 $       211.5 $         1.7
                                ================ ============= =============



                                  Non-cash
                                  Interest      Gain on
                                   Expense    Investments     Total
                                ------------ ------------  -----------


Cost of product revenues        $          - $          -  $      46.5
Cost of service revenues                   -            -         15.0
Sales and marketing expense                -            -        124.2
Research and development
 expense                                   -            -         63.9
General and administrative
 expense                                   -            -         26.2
Acquisition-related expense                -            -          1.7
Interest expense                        44.0            -         44.0
Other income (expense), net                -         (0.7)        (0.7)
                                ------------ ------------  -----------
Effect on income before income
 taxes                          $       44.0 $       (0.7) $     320.8
                                ============ ============  ===========



                                     Nine Months Ended January 27, 2012
                               ---------------------------------------------

                                 Amortization of                Acquisition-
                                   Intangible     Stock-based     related
                                     Assets       Compensation    Expense
                                ---------------- ------------- -------------

Cost of product revenues        $           41.8 $         4.1 $         5.4
Cost of service revenues                       -          13.8             -
Sales and marketing expense                 25.6          96.5             -
Research and development
 expense                                     0.2          57.0           2.6
General and administrative
 expense                                       -          26.4             -
Acquisition-related expense                    -             -           7.4
Interest expense                               -             -             -
Other income (expense), net                    -             -             -
                                ---------------- ------------- -------------
Effect on income before income
 taxes                          $           67.6 $       197.8 $        15.4
                                ================ ============= =============




                                  Non-cash
                                  Interest      Gain on
                                   Expense    Investments     Total
                                ------------ ------------  -----------

Cost of product revenues        $          - $          -  $      51.3
Cost of service revenues                   -            -         13.8
Sales and marketing expense                -            -        122.1
Research and development
 expense                                   -            -         59.8
General and administrative
 expense                                   -            -         26.4
Acquisition-related expense                -            -          7.4
Interest expense                        38.7            -         38.7
Other income (expense), net                -         (0.7)        (0.7)
                                ------------ ------------  -----------
Effect on income before income
 taxes                          $       38.7 $       (0.7) $     318.8
                                ============ ============  ===========




                                NETAPP, INC.
                 RECONCILIATION OF NON-GAAP GUIDANCE TO GAAP
                       EXPRESSED AS EARNINGS PER SHARE
                             FOURTH QUARTER 2013
                                 (Unaudited)


                                                       Fourth Quarter
                                                            2013
                                                ----------------------------

Non-GAAP Guidance - Net Income Per Share                $0.65 - $0.70


Adjustments of Specific Items to
  Net Income Per Share for the Fourth Quarter
   2013:

  Amortization of intangible assets                        (0.06)
  Stock-based compensation expense                         (0.18)
  Non-cash interest expense                                (0.04)
  Income tax effect                                         0.06
                                                ----------------------------
Total Adjustments                                          (0.22)

GAAP Guidance - Net Income Per Share                    $0.43 - $0.48


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@CloudExpo Stories
For organizations that have amassed large sums of software complexity, taking a microservices approach is the first step toward DevOps and continuous improvement / development. Integrating system-level analysis with microservices makes it easier to change and add functionality to applications at any time without the increase of risk. Before you start big transformation projects or a cloud migration, make sure these changes won’t take down your entire organization.
All clouds are not equal. To succeed in a DevOps context, organizations should plan to develop/deploy apps across a choice of on-premise and public clouds simultaneously depending on the business needs. This is where the concept of the Lean Cloud comes in - resting on the idea that you often need to relocate your app modules over their life cycles for both innovation and operational efficiency in the cloud. In his session at @DevOpsSummit at19th Cloud Expo, Valentin (Val) Bercovici, CTO of Soli...
What are the new priorities for the connected business? First: businesses need to think differently about the types of connections they will need to make – these span well beyond the traditional app to app into more modern forms of integration including SaaS integrations, mobile integrations, APIs, device integration and Big Data integration. It’s important these are unified together vs. doing them all piecemeal. Second, these types of connections need to be simple to design, adapt and configure...
To manage complex web services with lots of calls to the cloud, many businesses have invested in Application Performance Management (APM) and Network Performance Management (NPM) tools. Together APM and NPM tools are essential aids in improving a business's infrastructure required to support an effective web experience... but they are missing a critical component - Internet visibility.
Microservices are a very exciting architectural approach that many organizations are looking to as a way to accelerate innovation. Microservices promise to allow teams to move away from monolithic "ball of mud" systems, but the reality is that, in the vast majority of organizations, different projects and technologies will continue to be developed at different speeds. How to handle the dependencies between these disparate systems with different iteration cycles? Consider the "canoncial problem" ...
Both SaaS vendors and SaaS buyers are going “all-in” to hyperscale IaaS platforms such as AWS, which is disrupting the SaaS value proposition. Why should the enterprise SaaS consumer pay for the SaaS service if their data is resident in adjacent AWS S3 buckets? If both SaaS sellers and buyers are using the same cloud tools, automation and pay-per-transaction model offered by IaaS platforms, then why not host the “shrink-wrapped” software in the customers’ cloud? Further, serverless computing, cl...
“We're a global managed hosting provider. Our core customer set is a U.S.-based customer that is looking to go global,” explained Adam Rogers, Managing Director at ANEXIA, in this SYS-CON.tv interview at 18th Cloud Expo, held June 7-9, 2016, at the Javits Center in New York City, NY.
The speed of software changes in growing and large scale rapid-paced DevOps environments presents a challenge for continuous testing. Many organizations struggle to get this right. Practices that work for small scale continuous testing may not be sufficient as the requirements grow. In his session at DevOps Summit, Marc Hornbeek, Sr. Solutions Architect of DevOps continuous test solutions at Spirent Communications, explained the best practices of continuous testing at high scale, which is rele...
Hardware virtualization and cloud computing allowed us to increase resource utilization and increase our flexibility to respond to business demand. Docker Containers are the next quantum leap - Are they?! Databases always represented an additional set of challenges unique to running workloads requiring a maximum of I/O, network, CPU resources combined with data locality.
"Matrix is an ambitious open standard and implementation that's set up to break down the fragmentation problems that exist in IP messaging and VoIP communication," explained John Woolf, Technical Evangelist at Matrix, in this SYS-CON.tv interview at @ThingsExpo, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
"A lot of times people will come to us and have a very diverse set of requirements or very customized need and we'll help them to implement it in a fashion that you can't just buy off of the shelf," explained Nick Rose, CTO of Enzu, in this SYS-CON.tv interview at 18th Cloud Expo, held June 7-9, 2016, at the Javits Center in New York City, NY.
As software becomes more and more complex, we, as software developers, have been splitting up our code into smaller and smaller components. This is also true for the environment in which we run our code: going from bare metal, to VMs to the modern-day Cloud Native world of containers, schedulers and micro services. While we have figured out how to run containerized applications in the cloud using schedulers, we've yet to come up with a good solution to bridge the gap between getting your contain...
Web Real-Time Communication APIs have quickly revolutionized what browsers are capable of. In addition to video and audio streams, we can now bi-directionally send arbitrary data over WebRTC's PeerConnection Data Channels. With the advent of Progressive Web Apps and new hardware APIs such as WebBluetooh and WebUSB, we can finally enable users to stitch together the Internet of Things directly from their browsers while communicating privately and securely in a decentralized way.
"We host and fully manage cloud data services, whether we store, the data, move the data, or run analytics on the data," stated Kamal Shannak, Senior Development Manager, Cloud Data Services, IBM, in this SYS-CON.tv interview at 18th Cloud Expo, held June 7-9, 2016, at the Javits Center in New York City, NY.
Who are you? How do you introduce yourself? Do you use a name, or do you greet a friend by the last four digits of his social security number? Assuming you don’t, why are we content to associate our identity with 10 random digits assigned by our phone company? Identity is an issue that affects everyone, but as individuals we don’t spend a lot of time thinking about it. In his session at @ThingsExpo, Ben Klang, Founder & President of Mojo Lingo, discussed the impact of technology on identity. Sho...
"Operations is sort of the maturation of cloud utilization and the move to the cloud," explained Steve Anderson, Product Manager for BMC’s Cloud Lifecycle Management, in this SYS-CON.tv interview at 18th Cloud Expo, held June 7-9, 2016, at the Javits Center in New York City, NY.
Due of the rise of Hadoop, many enterprises are now deploying their first small clusters of 10 to 20 servers. At this small scale, the complexity of operating the cluster looks and feels like general data center servers. It is not until the clusters scale, as they inevitably do, when the pain caused by the exponential complexity becomes apparent. We've seen this problem occur time and time again. In his session at Big Data Expo, Greg Bruno, Vice President of Engineering and co-founder of StackIQ...
"I think that everyone recognizes that for IoT to really realize its full potential and value that it is about creating ecosystems and marketplaces and that no single vendor is able to support what is required," explained Esmeralda Swartz, VP, Marketing Enterprise and Cloud at Ericsson, in this SYS-CON.tv interview at @ThingsExpo, held June 7-9, 2016, at the Javits Center in New York City, NY.
The buzz continues for cloud, data analytics and the Internet of Things (IoT) and their collective impact across all industries. But a new conversation is emerging - how do companies use industry disruption and technology enablers to lead in markets undergoing change, uncertainty and ambiguity? Organizations of all sizes need to evolve and transform, often under massive pressure, as industry lines blur and merge and traditional business models are assaulted and turned upside down. In this new da...
"We got started as search consultants. On the services side of the business we have help organizations save time and save money when they hit issues that everyone more or less hits when their data grows," noted Otis Gospodnetić, Founder of Sematext, in this SYS-CON.tv interview at @DevOpsSummit, held June 9-11, 2015, at the Javits Center in New York City.