8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): January 21, 2010

FAIRCHILD SEMICONDUCTOR INTERNATIONAL, INC.

(Exact name of registrant as specified in its charter)

Delaware	001-15181	04-3363001
(State or other jurisdiction of incorporation or organization)	(Commission File Number)	(I.R.S. Employer Identification No.)

82 Running Hill Road

South Portland, Maine 04106

(Address of principal executive offices, including zip code)

Registrant’s telephone number, including area code: (207) 775-8100

Check the appropriate box below if the form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02 Results of Operations and Financial Condition

On January 21, 2010, we announced consolidated financial results for the quarter and full year ended December 27, 2009. The press release announcing the results is included as Exhibit 99.1 to this report. Additional information about non-GAAP financial measures included in the press release is included in Exhibit 99.2. Each exhibit is incorporated herein by reference.

Signature

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	Fairchild Semiconductor International, Inc.
Date: January 21, 2010	/s/    ROBIN A. SAWYER
	Robin A. Sawyer
	Vice President, Corporate Controller
	(Principal Accounting Officer and Duly Authorized Officer)

EXHIBIT INDEX

Exhibit No.	Description
99.1	Press release dated January 21, 2010 announcing financial results for the quarter and full year ended December 27, 2009.
99.2	Additional information about non-GAAP financial measures included in the press release.

EX-99.1

Exhibit 99.1

Fairchild Semiconductor Reports Results for the Fourth Quarter and Full Year 2009

• Sales and Gross Margin Exceed High End of Expectations

• Inventories Improve as Distributor Sell Through Posts Solid Growth

• Record $129 million in Free Cash Flow for 2009

• Debt Reduced by $44 million in the Fourth Quarter and $63 million in 2009

Fairchild Semiconductor (NYSE: FCS), the leading global supplier of power semiconductors, today announced results for the fourth quarter ended December 27, 2009. Fairchild reported fourth quarter sales of $354.5 million, up 7% from the prior quarter and 11% higher than the fourth quarter of 2008.

Fairchild reported fourth quarter net income of $13.1 million or $0.10 per diluted share compared to net income of $2.7 million or $0.02 per diluted share in the prior quarter and a net loss of $218.1 million or $1.76 per share in the fourth quarter of 2008. The fourth quarter of 2008 includes a $203 million goodwill impairment charge. Results for the fourth quarter of 2009 include a $6.0 million charge for litigation, $5.8 million in restructuring and impairments, $2.1 million of accelerated depreciation and a $1.2 million gain associated with debt buyback. Gross margin was 29.7% compared to 26.0% in the prior quarter and 26.5% in the year ago quarter.

Fairchild reported fourth quarter adjusted net income of $29.9 million or $0.23 per diluted share, compared to adjusted net income of $14.9 million or $0.12 per diluted share in the prior quarter and adjusted net income of $7.7 million or $0.06 per diluted share in the fourth quarter of 2008. Adjusted gross margin was 30.3%, up 340 basis points sequentially and 380 basis points higher than in the fourth quarter of 2008. Adjusted gross margin excludes accelerated depreciation and inventory write-offs/reserve releases related to fab closures.

Full year revenues for 2009 were $1.2 billion, a decrease of 25% compared to 2008. Fairchild reported a net loss of $60 million or $0.49 per share in 2009, compared to a net loss of $167 million or $1.35 per share in 2008. On an adjusted basis, the company reported 2009 net income of $1 million or $0.01 per diluted share, compared to $86 million or $0.69 per diluted share in 2008. Adjusted net income and loss excludes amortization of acquisition-related intangibles, restructuring and impairments, net impairment/gain on equity investments, gain associated with debt buyback, goodwill impairment charge, impairment of investments, charge/release for litigation, accelerated depreciation and inventory write-offs/reserve releases related to fab closures, cost associated with the redemption of convertible debt, tax effects from finalized tax filings and positions, and associated net tax benefits of these items and other acquisition-related intangibles.

“We delivered results in the fourth quarter that exceeded our initial expectations in virtually all aspects of the business,” said Mark Thompson, Fairchild’s president and CEO. “We grew sales 7% sequentially in what is typically a flat quarter while further reducing our days of inventory both internally and in our distribution channel. Our channel inventories are at record low levels while the mix of fast moving products to slow turning inventory is the best on record. We pushed adjusted gross margin over 30 percent and have strong momentum heading into the first quarter to exceed our past gross margin peak. Strong execution on sales growth, margins and cost reductions also enabled us to generate $43 million of free cash flow in Q4 and a record $129 million for all of 2009.

End Markets and Channel Activity

“Order rates were solid throughout the quarter across a broad range of end markets enabling us to increase our backlog position from a quarter ago,” stated Thompson. “Overall product pricing in Q4 moderated to down less than one percent sequentially as customers focus more on product availability.

“Distributor sell through increased nearly 8% sequentially which was well above our initial expectations,” said Thompson. “The strong sell through drove a channel inventory reduction of about 7% from the prior quarter, resulting in a record low 8.3 weeks of inventory. If we add this channel inventory reduction to our sales we estimate actual consumption demand in Q4 was approximately $363 million.

Fourth Quarter Financials

“Strong sales growth coupled with disciplined cost and asset management allowed us to post solid improvements in our financial results for the fourth quarter,” said Mark Frey, Fairchild’s executive vice president and CFO. “We exceeded our adjusted gross margin guidance for the quarter and are well positioned to continue this trend in 2010 as we benefit from a better mix due to new products and our focus on higher value sockets as well as firmer pricing and higher factory loadings. R&D and SG&A expenses of $72.9 million were higher than forecast due primarily to greater variable costs driven by the stronger than expected demand. Cash and securities held roughly flat from the prior quarter at $452 million as we used our strong free cash flow to retire $44 million in debt and pay a $6 million cash settlement of litigation. We reduced internal inventory by 3 days to 69 days as sales growth more than offset the $7 million increase primarily in finished goods. We reduced our outstanding debt level by $63 million or 12 percent in 2009. We opportunistically bought back debt below par where possible and recorded a $2 million net gain in 2009 as a result of these actions.

Current Status of First Quarter Business

“Our scheduled backlog for first quarter shipments is currently about $369 million which is roughly $33 million higher than this point a quarter ago,” said Frey. “Included in this amount is approximately $20 million of backlog that we booked in the first three and a half weeks of this quarter. We expect that both distributor sell through and OEM demand will continue to track above seasonal levels in Q1. Given the solid order rates this quarter and our starting backlog position, we expect first quarter sales to be roughly $370 million while further improvements in product mix help drive adjusted gross margin to a range of 31 to 32%. We expect R&D and SG&A spending to be approximately $78 million in Q1. Interest expense for the first quarter is expected to be roughly $3 million while our adjusted tax rate should be in the range of 15 to 20%. We remain disciplined in our capital investment plans with spending forecast to be between 6 to 7% of sales in 2010. We anticipate recording approximately $2 million in charges and $2 million of accelerated depreciation in the first quarter associated with previously announced fab closure actions. As with last quarter, we are not assuming any obligation to update this information, although we may choose to do so before we announce first quarter results.”

Adjusted gross margin, adjusted net income and loss and free cash flow are non-GAAP financial measures and should not be considered replacements for GAAP results. We exclude accelerated depreciation and inventory write-offs/reserves related to fab closures from GAAP gross margins to determine adjusted gross margins. To determine adjusted net income/loss, we exclude amortization of acquisition-related intangibles, restructuring and impairments, net impairment/gain on equity investments, gain associated with debt buyback, goodwill impairment charge, impairment of investments, charge/release for litigation, accelerated depreciation and inventory write-offs/reserve releases related to fab closures, cost associated with the redemption of convertible debt, tax effects from finalized tax filings and positions, and associated net tax benefits of these items and other acquisition-related intangibles. To determine free cash flow, we subtract capital expenditures from GAAP cash provided by operating activities. Fairchild presents adjusted results because its management uses them as additional measures of the company’s operating performance, and management believes adjusted financial information is useful to investors because it illuminates underlying operational trends by excluding significant non-recurring, non-cash or otherwise unusual transactions. Fairchild’s criteria for determining adjusted results may differ from methods used by other companies, and should not be regarded as a replacement for corresponding GAAP measures.

Special Note on Forward Looking Statements:

Some of the paragraphs above, including the one headed “Current Status of First Quarter Business,” contain forward-looking statements that are based on management’s assumptions and expectations and involve risk and uncertainty. Other forward-looking statements may also be found in this news release. Forward-looking statements usually, but do not always, contain forward-looking terminology such as “we believe,” “we expect,” or “we anticipate,” or refer to management’s expectations about Fairchild’s future performance. Many factors could cause actual results to differ materially from those expressed in forward-looking statements. Among these factors are the following: failure to maintain order rates at expected levels; failure to achieve expected savings from cost reduction actions or other adverse results from those actions; changes in demand for our products; changes in inventories at our customers and distributors; technological and product development risks, including the risks of failing to maintain the right to use some technologies or failing to adequately protect our own intellectual property against misappropriation or infringement; availability of manufacturing capacity; the risk of production delays; availability of raw materials at competitive prices; competitors’ actions; loss of key customers, including but not limited to distributors; the inability to attract and retain key management and other employees; order cancellations or reduced bookings; changes in manufacturing yields or output; risks related to warranty and product liability claims; risks inherent in doing business internationally; changes in tax regulations or the migration of profits from low tax jurisdictions to higher tax jurisdictions; regulatory risks and significant litigation. These and other risk factors are discussed in the company’s quarterly and annual reports filed with the Securities and Exchange Commission (SEC) and available at the Investor Relations section of Fairchild Semiconductor’s web site at investor.fairchildsemi.com or the SEC’s web site at www.sec.gov.

About Fairchild Semiconductor:

Fairchild Semiconductor (NYSE: FCS) is a global leader delivering energy-efficient power analog and power discrete solutions. Fairchild is The Power Franchise®, providing leading-edge silicon and packaging technologies, manufacturing strength and system expertise for consumer, communications, industrial, portable, computing and automotive systems. An application-driven, solution-based semiconductor supplier, Fairchild provides online design tools and design centers worldwide as part of its comprehensive Global Power Resource^SM. Please contact us on the web at www.fairchildsemi.com.

Fairchild Semiconductor International, Inc.

Consolidated Statements of Operations

(In millions, except per share amounts)

(Unaudited)

	Three Months Ended									Twelve Months Ended
	December 27, 2009			September 27, 2009			December 28, 2008			December 27, 2009			December 28, 2008
Total revenue	$	354.5		$	331.8		$	320.9		$	1,187.5		$	1,574.2
Cost of sales (1)		249.1			245.5			235.8			897.2			1,118.8
Gross margin		105.4			86.3			85.1			290.3			455.4
Gross margin %		29.7	%		26.0	%		26.5	%		24.4	%		28.9	%
Operating expenses:
Research and development (2)		25.4			24.9			23.7			99.7			112.9
Selling, general and administrative (3)		47.5			43.4			44.3			179.3			217.7
Amortization of acquisition-related intangibles		5.6			5.6			5.5			22.3			22.1
Restructuring and impairments		5.8			4.1			15.9			27.9			29.2
Goodwill impairment charge		—			—			203.3			—			203.3
Charge (release) for litigation		6.0			—			(3.3	)		6.0			(3.3	)
Total operating expenses		90.3			78.0			289.4			335.2			581.9
Operating income (loss)		15.1			8.3			(204.3	)		(44.9	)		(126.5	)
Impairment of investments		—			—			19.0			—			19.0
Other expense, net		3.0			4.4			6.2			18.4			23.1
Income (loss) before income taxes		12.1			3.9			(229.5	)		(63.3	)		(168.6	)
Provision (benefit) for income taxes		(1.0	)		1.2			(11.4	)		(3.1	)		(1.2	)
Net income (loss)	$	13.1		$	2.7		$	(218.1	)	$	(60.2	)	$	(167.4	)
Net income (loss) per common share:
Basic	$	0.11		$	0.02		$	(1.76	)	$	(0.49	)	$	(1.35	)
Diluted	$	0.10		$	0.02		$	(1.76	)	$	(0.49	)	$	(1.35	)
Weighted average common shares:
Basic		124.0			123.9			123.6			123.8			124.3
Diluted		127.6			127.5			123.6			123.8			124.3
(1)    Equity compensation expense included in cost of sales	$	2.6		$	2.4		$	0.9		$	5.8		$	4.5
(2)    Equity compensation expense included in research and development	$	1.2		$	1.1		$	0.9		$	3.8		$	4.1
(3)    Equity compensation expense included in selling, general and administrative	$	2.0		$	1.7		$	0.5		$	7.9		$	10.5

Fairchild Semiconductor International, Inc.

Reconciliation of Net Income (Loss) To Adjusted Net Income

(In millions)

(Unaudited)

	Three Months Ended									Twelve Months Ended
	December 27, 2009			September 27, 2009			December 28, 2008			December 27, 2009			December 28, 2008
Net income (loss)	$	13.1		$	2.7		$	(218.1	)	$	(60.2	)	$	(167.4	)
Adjustments to reconcile net income (loss) to adjusted net income (loss):
Restructuring and impairments		5.8			4.1			15.9			27.9			29.2
Net impairment/gain on equity investments (1)		—			—			—			2.1			—
Gain associated with debt buyback (1)		(1.2	)		—			—			(2.0	)		—
Accelerated depreciation on assets related to fab closure (2)		2.1			3.0			—			8.8			—
Goodwill impairment charge		—			—			203.3			—			203.3
Impairment of investments		—			—			19.0			—			19.0
Charge (release) for litigation		6.0			—			(3.3	)		6.0			(3.3	)
Inventory write-off (release) associated with fab closure (2)		(0.1	)		(0.1	)		—			0.4			—
Costs associated with the redemption of convertible debt (1)		—			—			—			—			0.4
Amortization of acquisition-related intangibles		5.6			5.6			5.5			22.3			22.1
Associated net tax effects of the above and other acquisition-related intangibles		(1.4	)		(0.4	)		(14.6	)		(4.1	)		(14.4	)
Tax effects from finalized tax filings and positions		—			—			—			—			(2.5	)
Adjusted net income	$	29.9		$	14.9		$	7.7		$	1.2		$	86.4
Adjusted net income per common share:
Basic	$	0.24		$	0.12		$	0.06		$	0.01		$	0.70
Diluted	$	0.23		$	0.12		$	0.06		$	0.01		$	0.69

(1) Recorded in other expense, net

(2) Recorded in cost of sales

Fairchild Semiconductor International, Inc.

Reconciliation of Gross Margin To Adjusted Gross Margin

(In millions)

(Unaudited)

	Three Months Ended									Twelve Months Ended
	December 27, 2009			September 27, 2009			December 28, 2008			December 27, 2009			December 28, 2008
Gross margin	$	105.4		$	86.3		$	85.1		$	290.3		$	455.4
Adjustments to reconcile gross margin to adjusted gross margin:
Accelerated depreciation on assets related to fab closure		2.1			3.0			—			8.8			—
Inventory write-off (release) associated with fab closure		(0.1	)		(0.1	)		—			0.4			—
Adjusted gross margin	$	107.4		$	89.2		$	85.1		$	299.5		$	455.4
Adjusted gross margin %		30.3	%		26.9	%		26.5	%		25.2	%		28.9	%

Adjusted net income, adjusted net income per share, and adjusted gross margin should not be considered as alternatives to net income (loss), net income (loss) per share, gross margin or other measures of consolidated operations and cash flow data prepared in accordance with accounting principles generally accepted in the United States of America, as indicators of our operating performance, or as alternatives to cash flow as a measure of liquidity.

Fairchild Semiconductor International, Inc.

Consolidated Balance Sheets

(In millions)

(Unaudited)

	December 27, 2009		September 27, 2009		December 28, 2008
ASSETS
Current assets:
Cash and cash equivalents	$	415.8	$	416.4	$	351.5
Short-term marketable securities		0.1		0.7		0.8
Receivables, net		134.0		131.5		155.6
Inventories		189.5		182.6		231.0
Other current assets		41.8		43.1		40.0
Total current assets		781.2		774.3		778.9
Property, plant and equipment, net		653.2		662.7		731.6
Intangible assets, net		81.1		86.7		102.1
Goodwill		161.3		161.3		161.7
Long-term securities		35.8		35.4		34.6
Other assets		49.8		40.9		40.9
Total assets	$	1,762.4	$	1,761.3	$	1,849.8
LIABILITIES, TEMPORARY EQUITY AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current portion of long-term debt	$	5.3	$	5.3	$	5.3
Accounts payable		119.6		106.8		94.4
Accrued expenses and other current liabilities		70.6		67.1		94.4
Total current liabilities		195.5		179.2		194.1
Long-term debt, less current portion		466.9		511.3		529.9
Other liabilities		71.1		63.4		65.9
Total liabilities		733.5		753.9		789.9
Temporary equity - deferred stock units		2.3		2.2		2.8
Total stockholders’ equity		1,026.6		1,005.2		1,057.1
Total liabilities, temporary equity and stockholders’ equity	$	1,762.4	$	1,761.3	$	1,849.8

Fairchild Semiconductor International, Inc.

Condensed Consolidated Statements of Cash Flows

(In millions)

(Unaudited)

	Three Months Ended			Twelve Months Ended
	December 27, 2009			December 27, 2009			December 28, 2008
Cash flows from operating activities:
Net income (loss)	$	13.1		$	(60.2	)	$	(167.4	)
Adjustments to reconcile net income (loss) to cash provided by operating activities:
Depreciation and amortization		39.7			160.4			136.6
Non-cash stock-based compensation expense		5.8			17.5			19.1
Non-cash restructuring and impairments expense		0.8			1.6			12.2
Non-cash impairment of investments		—			—			19.0
Non-cash goodwill impairment		—			—			203.3
Non-cash write-off of equity investment		—			2.3			—
Gain on debt buyback		(1.4	)		(2.2	)		—
Gain on sale of equity investment		—			(0.2	)		—
Deferred income taxes, net		3.0			(8.6	)		(11.2	)
Other		1.0			1.9			2.3
Changes in operating assets and liabilities, net of acquisitions		7.5			75.9			(28.5	)
Cash provided by operating activities		69.5			188.4			185.4
Cash flows from investing activities:
Capital expenditures		(26.8	)		(59.8	)		(168.7	)
Purchase of marketable securities		(0.1	)		(0.5	)		(3.8	)
Sale of marketable securities		0.6			0.9			5.1
Maturity of marketable securities		—			0.2			0.2
Other		(0.7	)		(1.9	)		(5.2	)
Acquisitions		—			(1.5	)		—
Cash used in investing activities		(27.0	)		(62.6	)		(172.4	)
Cash flows from financing activities:
Repayment of long-term debt		(42.9	)		(60.6	)		(204.4	)
Issuance of long-term debt		—			—			150.0
Proceeds from issuance of common stock and from exercise of stock options, net		—			—			9.0
Purchase of treasury stock		—			—			(21.7	)
Other		(0.2	)		(0.9	)		(3.4	)
Cash used in financing activities		(43.1	)		(61.5	)		(70.5	)
Net change in cash and cash equivalents		(0.6	)		64.3			(57.5	)
Cash and cash equivalents at beginning of period		416.4			351.5			409.0
Cash and cash equivalents at end of period	$	415.8		$	415.8		$	351.5

Fairchild Semiconductor International, Inc.

Reconciliation of Cash Provided by Operating Activities to Free Cash Flow

(In millions)

(Unaudited)

	Three Months Ended			Twelve Months Ended
	December 27, 2009			December 27, 2009			December 28, 2008
Cash provided by operating activities	$	69.5		$	188.4		$	185.4
Capital expenditures		(26.8	)		(59.8	)		(168.7	)
Free cash flow	$	42.7		$	128.6		$	16.7

EX-99.2

Exhibit 99.2

Information About Our Non-GAAP Financial Measures

Regulation G and other provisions of the securities laws regulate the use of financial measures that are not prepared in accordance with generally accepted accounting principles (we refer to such measures as “non-GAAP financial measures”). In the press release included in this current report on Form 8-K, we provide information on “free cash flow”, “adjusted net income”, the related “adjusted earnings per share” (or “adjusted EPS”), “adjusted gross margin” and the related “adjusted gross margin percent,” each of which is a non-GAAP financial measure.

We believe these measures provide important supplemental information to investors. We use these measures, together with GAAP measures, for internal managerial purposes and as a means to evaluate period-to-period comparisons. However, we do not, and you should not, rely on non-GAAP financial measures alone as measures of our performance. We believe that non-GAAP financial measures reflect an additional way of viewing aspects of our operations that – when taken together with GAAP results and the reconciliations to corresponding GAAP financial measures that we also provide in our press releases – provide a more complete understanding of factors and trends affecting our business. We strongly encourage you to review all of our financial statements and publicly-filed reports in their entirety and to not rely on any single financial measure.

For information about our financial results as reported in accordance with GAAP, see Item 8 of Part II, “Consolidated Financial Statements and Supplementary Data” in our annual report on Form 10-K for the year ended December 28, 2008. For a quantitative reconciliation of our non-GAAP financial measures to the most comparable GAAP measures, see “Reconciliation of Net Income (Loss) to Adjusted Net Income (Loss)”, “Reconciliation of Gross Margin to Adjusted Gross Margin” and “Reconciliation of Cash Provided by Operating Activities to Free Cash Flow” in Exhibit 99.1 included in this current report on Form 8-K.

Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies’ non-GAAP financial measures, even if they have similar names.

Items That We Exclude In the Calculation of Adjusted Net Income (Loss)

Adjusted net income (loss), which we reconcile to net income (loss), excludes the following items:

• restructuring and impairments,

• costs associated with redemption of convertible debt,

• amortization of acquisition-related intangibles,

• gain on sale of equity investment,

• impairment of equity investment,

• gain associated with debt buyback,

• goodwill impairment loss,

• impairment of investments,

• charge (release) for litigation,

• accelerated depreciation and inventory write-off (release) associated with fab closure,

• the tax effects associated with the above and other acquisition-related intangibles, and

• tax effects from finalized tax filings and positions.

Not all of these items are necessarily included in the calculation of net income (loss) each quarter. To understand which of the above items are included in the calculation of net income (loss), and excluded from the calculation of adjusted net income (loss), see the reconciliation data in Exhibit 99.1 included in this current report on Form 8-K.

Adjusted EPS is derived from adjusted net income (loss), using the same measures of outstanding shares as are used to calculate net income (loss) per share in accordance with GAAP.

Items That We Exclude In the Calculation of Adjusted Gross Margin

Adjusted gross margin, which we reconcile to gross margin, excludes accelerated depreciation and inventory write-off (release) associated with fab closure.

Adjusted gross margin percent is derived from adjusted gross margin using the same measures of revenue as are used to calculate gross margin percent in accordance with GAAP.

We use adjusted net income and adjusted gross margin to manage and evaluate our business operations and overall financial performance because they exclude some cash and non-cash items that are either beyond our immediate control or are not characteristic of our underlying business operations for the periods in which they are recorded, or both.

Items That We Exclude In the Calculation of Free Cash Flow

Free cash flow, which we reconcile to cash provided by operating activities, excludes capital expenditures. Free cash flow is not intended as an alternative measure of cash flows provided by operating activities, as determined in accordance with GAAP.

We exclude these items for the following reasons:

• We believe such charges do not reflect results of our ongoing operations.

• We believe that, since such charges are not recorded in all periods, excluding them provides better comparability of our results of operations from period-to-period.

• Adjusted results provide an additional measure that our stockholders and debtholders have requested and expect as a means to project future results of operations.

• Although, for the reasons given above, our adjusted results may not be directly comparable with those of other companies, we believe they provide an additional point of comparison (particularly when viewed in the context of the reconciling data that we also provide) that investors may use to compare us with other companies in our industry, many of which also provide non-GAAP financial measures or highlight certain charges in their GAAP presentations.

• For comparison and projection purposes, GAAP measures alone may not provide all information that an investor may wish to consider. For example, amortization of acquisition-related intangibles, included in the GAAP measure, would be higher for a company that has grown through acquisitions than for a company that has grown internally. Excluding and explaining such charges as part of the presentation of the non-GAAP financial measure provides additional information for an investor to use, together with the GAAP measure, in comparing the performance of the two companies.