8-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, DC 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) July 28, 2010

LSI CORPORATION

(Exact name of registrant as specified in its charter)

DELAWARE	1-10317	94-2712976
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

1621 Barber Lane
Milpitas, California 95035
(Address of principal executive offices, including zip code)

(408) 433-8000
(Registrant’s telephone number, including area code)

Not Applicable
(Former name or former address, if changed since last report)

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 (see General Instruction A.2. below):

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

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

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

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

TABLE OF CONTENTS

EX-99.1

Item 2.02 Results of Operation and Financial Condition.

On July 28, 2010, LSI Corporation issued a news release regarding its financial results for the quarter ended July 4, 2010. A copy of the news release is furnished as Exhibit 99.1 to this Form 8-K and is incorporated by reference herein.

The news release contains non-GAAP financial information. Management believes that the presentation of non-GAAP net income (loss), non-GAAP gross margin, non-GAAP operating expenses, non-GAAP taxes, and non-GAAP net income (loss) per basic and diluted share provides important supplemental information to management and investors about financial and business trends relating to the company’s results of operations. Management believes that the use of these non-GAAP financial measures also provides consistency and comparability with our past financial reports.

Management has historically used these non-GAAP measures when evaluating operating performance because we believe that the inclusion or exclusion of the items described below provides an additional measure of our core operating results and facilitates comparisons of our core operating performance against prior periods and our business model objectives. We have chosen to provide this information to investors to enable them to perform additional analyses of past, present and future operating performance and as a supplemental means to evaluate our ongoing core operations. Externally, we believe that these non-GAAP measures continue to be useful to investors in their assessment of our operating performance and their valuation of the company.

Internally, these non-GAAP measures are significant measures used by management for purposes of:

• evaluating the core operating performance of the company;

• establishing internal budgets;

• calculating return on investment for development programs and growth initiatives;

• comparing performance with internal forecasts and targeted business models;

• strategic planning;

• evaluating and valuing potential acquisition candidates and how their operations compare to the company’s operations; and

• benchmarking performance externally against our competitors.

How we calculate our non-GAAP financial measures

Non-GAAP net income (loss), non-GAAP gross margin, non-GAAP operating expenses, non-GAAP taxes and non-GAAP net income (loss) per basic and diluted share are important to the company for the reasons noted above and exclude the following items:

• Stock-based compensation. Stock-based compensation relates primarily to LSI stock awards such as stock options and restricted stock units. Stock-based compensation is a non-cash expense that varies in amount from period to period and is dependent on market forces that are difficult to predict. As a result of this unpredictability, management excludes this item from its internal operating forecasts and models. Management believes that non-GAAP measures adjusted for stock-based compensation provide investors with a basis to measure the company’s core performance against the performance of other companies without the variability created by stock-based compensation.

• Purchase accounting effect on inventory. This is an acquisition-related charge. It results from marking to fair value an acquired company’s inventory at the time of acquisition. This charge is not factored into management’s evaluation of potential acquisitions or our performance after completion of acquisitions, because it is not related to our core operating performance, and the frequency and amount of this type of charge can vary significantly based on the size and timing of our acquisitions. Excluding this data provides investors with a basis to compare the company against the performance of other companies without this variability.

• Amortization of acquisition-related intangibles. This relates to purchased technology in acquisitions such as existing technology, patents and trademarks. This charge is not factored into management’s evaluation of potential acquisitions, or our performance after completion of acquisitions, because it is not related to our core operating performance, and the frequency and amount of this type of charge can vary significantly based on the size and timing of our acquisitions and the maturities of the businesses being acquired. Excluding this data provides investors with a basis to compare the company against the performance of other companies without this variability.

• Restructuring of operations and other items, net. This represents charges/losses and gains that are not directly related to the company’s ongoing or core business results. Management regularly excludes such items from internal operating forecasts and models because they are not considered a core operating activity for the company and because the frequency and variability in the nature of the charges can vary significantly from period to period. Excluding this data provides investors with a basis to compare the company against the performance of other companies without this variability.

• Goodwill and other intangible asset impairment charges. This item reflects the write down of goodwill and other intangible assets to their fair values. Because of the infrequent nature of this charge, management does not include this type of item in internal operating forecasts and models. Excluding this data provides investors with a basis to compare the company’s core operating results in different periods without this variability.

• Other charges and gains. Other charges and gains consist of gains or losses on equity investments and certain non-operating gains and losses that occur on an infrequent basis and vary greatly in amount. We do not regularly trade public equity securities nor do we typically use these securities to fund our ongoing operations. Management excludes these items because they do not affect our core operations. Excluding this data provides investors with a basis to compare the company against the performance of other companies without this variability.

• Non-GAAP income tax expense/benefit. This item represents the additional amount of tax expense or benefit that the company would accrue if it used non-GAAP results instead of GAAP results in the calculation of its tax liability.

We use non-GAAP net income computed as described above as the numerator in the calculation of non-GAAP net income per basic and diluted share. We calculate the basic and diluted share amounts used in the denominator in accordance with GAAP rules, using non-GAAP net income rather than GAAP net income.

Limitations of relying on non-GAAP financial measures

Some of the limitations of relying on non-GAAP financial measures include:

• Stock-based compensation. LSI’s stock-based incentive plans are important components of our employee incentive compensation arrangements and are reflected in our GAAP results. Stock-based compensation should be considered for a complete view of the costs of our compensation arrangements.

• Purchase accounting effect on inventory. Acquisitions have been an important part of our business strategy and the corresponding acquisition-related charges reflect the costs of choosing acquisitions as a form of growth strategy.

• Amortization of acquisition-related intangibles. Acquisitions have been an important part of our business strategy and the corresponding acquisition-related charges reflect the costs of choosing acquisitions as a form of growth strategy.

• Restructuring of operations and other items, net. This item reflects charges for severance, exit costs associated with leased facilities, asset impairment charges and gains on sales of assets that are no longer strategic. While no longer strategic to the future of the company, such items reflect the costs of decisions made as part of running a business and are critical to a complete view of our historical results.

• Goodwill and other intangible asset impairment charges. This amount should be included for a complete view of our historical performance including the impact of declines of the value of our assets.

• Other charges and gains. These amounts should be included for a complete view of our historical performance even though they are not related to our core operations.

• Non-GAAP income tax expense/benefit. This item represents the additional amount of tax expense or benefit that the company would accrue if it used non-GAAP results instead of GAAP results in the calculation of its tax liability. The limitation in it is that it does not include the effect of all the items excluded from the non-GAAP financial statements.

All supplemental non-GAAP financial measures should be read in conjunction with the comparable information presented in accordance with generally accepted accounting principles in the United States of America.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

Exhibit No.		Description
	99.1	News Release issued July 28, 2010.*

* Furnished, not filed.

SIGNATURES

     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 hereunto duly authorized.

LSI CORPORATION
By:	/s/ Bryon Look
	Bryon Look
	Executive Vice President, Chief Financial Officer and Chief Administrative Officer

Date: July 28, 2010

EXHIBIT INDEX

Exhibit No.		Description
	99.1	News Release issued July 28, 2010.*

* Furnished, not filed.

EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE	JULY 28, 2010
Investor Relations Contact:	Media Relations Contact:
Sujal Shah	Mitch Seigle
610-712-5471	408-954-3225
sujal.shah@lsi.com	mitch.seigle@lsi.com

cc10-54

LSI Reports Second Quarter 2010 Results

MILPITAS, Calif., July 28, 2010 — LSI Corporation (NYSE: LSI) today reported results for its second quarter ended July 4, 2010.

Second Quarter 2010 News Release Summary

§    Second quarter 2010 revenues of $639 million

§    Second quarter 2010 GAAP* net income of 1 cent per diluted share

§    Second quarter 2010 non-GAAP** net income of 11 cents per diluted share

§    Second quarter operating cash flows of $68 million

Third Quarter 2010 Business Outlook

§    Projected revenues of $625 million to $655 million

§    GAAP* net (loss)/income in the range of ($0.03) to $0.06 cents per share

§    Non-GAAP** net income in the range of $0.08 to $0.14 cents per share

*

Generally Accepted Accounting Principles.

**

Excludes goodwill and other intangible asset impairment, stock-based compensation, amortization of acquisition-related intangibles, purchase accounting effect on inventory, restructuring of operations and other items, net, write-down of debt and equity securities and gain on repurchase of convertible subordinated notes. It also excludes the income tax effect associated with the above mentioned items.

Second quarter 2010 revenues were $639 million, a 23% increase year-over-year compared to $521 million reported in the second quarter of 2009, and compares to $637 million reported in the first quarter of 2010.

Second quarter 2010 GAAP* net income was $7 million or 1 cent per diluted share, compared to second quarter 2009 GAAP net loss of $61 million or 9 cents per share. Second quarter 2010 GAAP results compare to first quarter 2010 GAAP net income of $23 million or 3 cents per diluted share. First quarter GAAP results included a net tax benefit of $19 million. Second quarter 2010 GAAP net income included a net charge of $64 million from special items, consisting primarily of $40 million of amortization of acquisition-related items, $18 million of stock-based compensation expense, and $5 million of net restructuring and other items.

Second quarter 2010 non-GAAP** net income was $71 million or 11 cents per diluted share, compared to second quarter 2009 non-GAAP net income of $7 million or 1 cent per diluted share. First quarter 2010 non-GAAP net income was $92 million or 14 cents per diluted share. First quarter non-GAAP results also included the aforementioned net tax benefit of $19 million.

Cash and short-term investments totaled approximately $670 million at quarter end. During the quarter, LSI repaid $350 million of outstanding convertible notes, becoming debt free. The company also completed second-quarter purchases of approximately 10 million shares of its common stock for approximately $55 million under its $250 million share repurchase program.

“Despite some isolated customer inventory adjustments late in the quarter that modestly affected our sequential revenue growth, tight operating expense control and higher gross margins enabled us to deliver a solid bottom-line performance,” said Abhi Talwalkar, LSI president and chief executive officer. “While improving end market demand for enterprise IT products continues to bode well for us, our outlook for the third quarter is one of tempered optimism as macro-economic conditions appear to be somewhat fluid at the present time.”

Bryon Look, LSI CFO and chief administrative officer, said, “We delivered sound financial results in the second quarter. First-half operating cash flows nearly tripled from the year-ago period while net cash improved by 28% on the same basis. We also repaid all our remaining debt and continued to purchase shares of the company’s common stock through our previously announced share repurchase program.”

LSI Third Quarter 2010 Business Outlook

	GAAP*	Special Items	Non-GAAP**
Revenue	$625 million to $655 million		$625 million to $655 million
Gross Margin	40% — 44%	$30 million to $40 million	46.5% — 48.5%
Operating Expenses	$243 million to $263 million	$20 million to $30 million	$223 million to $233 million
Net Other (Loss)/Income	$3 million		$3 million
Tax	Approximately $8 million		Approximately $8 million
Net (Loss)/Income Per Share	($0.03) to $0.06	($0.08) to ($0.11)	$0.08 to $0.14
Diluted Share Count	655 million		655 million

Capital spending is projected to be around $15 million in the third quarter and approximately $55 million in total for 2010.

Depreciation and software amortization is projected to be around $26 million in the third quarter and approximately $104 million in total for 2010.

LSI Conference Call Information

LSI will hold a conference call today at 2 p.m. PDT to discuss second quarter financial results and the third quarter 2010 business outlook. Internet users can access the conference call at http://www.lsi.com/webcast. Subsequent to the conference call, a replay will be available at the same web address.

Forward-Looking Statements: This news release contains forward-looking statements that are based on the current opinions and estimates of management. These statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those anticipated in the forward-looking statements. Factors that could cause LSI’s actual results to differ materially from those set forth in the forward-looking statements include, but are not limited to: our reliance on major customers and suppliers; our ability to keep up with rapid technological change; our ability to compete successfully in competitive markets; fluctuations in the timing and volumes of customer demand; the unavailability of appropriate levels of manufacturing capacity; and general industry and market conditions. For additional information, see the documents filed by LSI with the Securities and Exchange Commission, and specifically the risk factors set forth in the company’s most recent reports on Form 10-K and 10-Q. LSI disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

About LSI

LSI Corporation (NYSE: LSI) is a leading provider of innovative silicon, systems and software technologies that enable products which seamlessly bring people, information and digital content together. The company offers a broad portfolio of capabilities and services including custom and standard product ICs, adapters, systems and software that are trusted by the world’s best known brands to power leading solutions in the Storage and Networking markets. More information is available at www.lsi.com.

# # #

Editor’s Notes:

1. All LSI news releases (financial, acquisitions, manufacturing, products, technology, etc.) are issued exclusively by PR Newswire and are immediately thereafter posted on the company’s external website, http://www.lsi.com.

2. LSI and the LSI & Design logo are trademarks or registered trademarks of LSI Corporation.

3. All other brand or product names may be trademarks or registered trademarks of their respective companies.

LSI CORPORATION
Condensed Consolidated Balance Sheets
(In millions)
(Unaudited)

	July 4,			April 4,			December 31,
	2010			2010			2009
Assets
Current assets:
Cash and short-term investments	$	669.8		$	1,015.5		$	962.1
Accounts receivable, net		307.1			298.6			339.0
Inventories		191.6			185.8			169.3
Prepaid expenses and other current assets		110.5			124.4			115.1
Total current assets		1,279.0			1,624.3			1,585.5
Property and equipment, net		212.8			215.4			219.0
Goodwill and identified intangible assets, net		847.5			887.7			927.9
Other assets		224.8			223.1			235.5
Total assets	$	2,564.1		$	2,950.5		$	2,967.9
Liabilities and Stockholders’ Equity
Current liabilities:
Current portion of long-term debt	$	—		$	350.0		$	350.0
Other current liabilities		489.6			509.4			504.4
Total current liabilities		489.6			859.4			854.4
Pension, tax and other liabilities		609.8			618.9			652.4
Total liabilities		1,099.4			1,478.3			1,506.8
Stockholders’ equity:
Common stock and additional paid-in capital		6,123.8			6,141.6			6,149.2
Accumulated deficit		(4,378.5	)		(4,386.0	)		(4,408.5	)
Accumulated other comprehensive loss		(280.6	)		(283.4	)		(279.6	)
Total stockholders’ equity		1,464.7			1,472.2			1,461.1
Total liabilities and stockholders’ equity	$	2,564.1		$	2,950.5		$	2,967.9

LSI CORPORATION
Consolidated Statements of Operations (GAAP)
(In thousands, except per-share amounts)

(Unaudited)

	Three Months Ended									Six Months Ended
	July 4,			April 4,			July 5,			July 4,			July 5,
	2010			2010			2009			2010			2009
Revenues	$	639,405		$	637,182		$	520,665		$	1,276,587		$	1,002,944
Cost of revenues		330,194			332,937			301,333			663,131			577,917
Purchase accounting effect on inventory		—			—			2,550			—			2,550
Amortization of acquisition-related intangibles		31,288			31,288			33,867			62,576			67,477
Stock-based compensation expense		2,292			1,712			2,022			4,004			4,035
Total cost of revenues		363,774			365,937			339,772			729,711			651,979
Gross profit		275,631			271,245			180,893			546,876			350,965
Research and development		162,509			158,974			141,724			321,483			289,146
Stock-based compensation expense		8,644			7,898			7,195			16,542			15,057
Total research and development		171,153			166,872			148,919			338,025			304,203
Selling, general and administrative		69,304			70,563			64,819			139,867			131,338
Amortization of acquisition-related intangibles		8,948			8,948			9,123			17,896			18,246
Stock-based compensation expense		7,559			6,821			7,785			14,380			15,900
Total selling, general and administrative		85,811			86,332			81,727			172,143			165,484
Restructuring of operations and other items, net		5,067			1,620			6,010			6,687			31,215
Income/(loss) from operations		13,600			16,421			(55,763	)		30,021			(149,937	)
Interest expense		(1,707	)		(3,894	)		(6,864	)		(5,601	)		(14,100	)
Interest income and other, net		4,639			(8,807	)		6,344			(4,168	)		12,207
Income/(loss) before income taxes		16,532			3,720			(56,283	)		20,252			(151,830	)
Provision/(benefit) for income taxes		9,100			(18,800	)		5,200			(9,700	)		13,200
Net income/(loss)	$	7,432		$	22,520		$	(61,483	)	$	29,952		$	(165,030	)
Net income/(loss) per share:
Basic	$	0.01		$	0.03		$	(0.09	)	$	0.05		$	(0.25	)
Diluted	$	0.01		$	0.03		$	(0.09	)	$	0.05		$	(0.25	)
Shares used in computing per-share amounts:
Basic		651,778			656,528			650,300			654,192			649,360
Diluted		661,540			664,315			650,300			663,857			649,360

A reconciliation of net income/(loss) on the GAAP basis to non-GAAP net income/(loss) is included below.

	Three Months Ended							Six Months Ended
Reconciliation of GAAP net income/(loss) to	July 4,		April 4,		July 5,			July 4,		July 5,
non-GAAP net income/(loss):	2010		2010		2009			2010		2009
GAAP net income/(loss)	$	7,432	$	22,520	$	(61,483	)	$	29,952	$	(165,030	)
Special items:
a) Stock-based compensation expense — cost of revenues		2,292		1,712		2,022			4,004		4,035
b) Stock-based compensation expense — R&D		8,644		7,898		7,195			16,542		15,057
c) Stock-based compensation expense — SG&A		7,559		6,821		7,785			14,380		15,900
d) Amortization of acquisition-related intangibles — cost of revenues		31,288		31,288		33,867			62,576		67,477
e) Amortization of acquisition-related intangibles — SG&A		8,948		8,948		9,123			17,896		18,246
f) Purchase accounting effect on inventory		—		—		2,550			—		2,550
g) Restructuring of operations and other items, net		5,067		1,620		6,010			6,687		31,215
h) Write-down of equity securities		—		11,600		—			11,600		—
Total special items		63,798		69,887		68,552			133,685		154,480
Non-GAAP net income/(loss)	$	71,230	$	92,407	$	7,069		$	163,637	$	(10,550	)
Non-GAAP net income/(loss) per share:
Basic	$	0.11	$	0.14	$	0.01		$	0.25	$	(0.02	)
Diluted *	$	0.11	$	0.14	$	0.01		$	0.25	$	(0.02	)
Shares used in computing non-GAAP per-share amounts:
Basic		651,778		656,528		650,300			654,192		649,360
Diluted		661,540		690,395		652,389			663,857		649,360

* In computing non-GAAP diluted earnings per share for three months ended April 4, 2010, net income was increased by $3,500 for interest, net of taxes, on the $350 million convertible notes considered dilutive common stock.

	Three Months Ended						Six Months Ended
Reconciliation of GAAP to non-GAAP shares used in the	July 4,		April 4,		July 5,		July 4,		July 5,
calculation of diluted per-share amounts:	2010		2010		2009		2010		2009
Diluted shares used in per-share computation — GAAP		661,540		664,315		650,300		663,857		649,360
Dilutive stock awards		—		—		2,089		—		—
Effect of $350 million convertible notes considered dilutive		—		26,080		—		—		—
Diluted shares used in per-share computation — non-GAAP		661,540		690,395		652,389		663,857		649,360

LSI CORPORATION
Consolidated Statement of Cash Flows
(In thousands)

(Unaudited)

	Three Months Ended									Six Months Ended
	July 4,			April 4,			July 5,			July 4,			July 5,
	2010			2010			2009			2010			2009
Operating activities:
Net income/(loss)	$	7,432		$	22,520		$	(61,483	)	$	29,952		$	(165,030	)
Adjustments:
Depreciation and amortization *		66,251			67,017			66,239			133,268			131,318
Stock-based compensation expense		18,495			16,431			17,002			34,926			34,992
Gain on redemption of convertible subordinated notes		—			—			(149	)		—			(149	)
Write-down of equity securities		—			11,600			—			11,600			—
Loss on sale of property and equipment		265			3			17			268			117
Unrealized foreign exchange loss/(gain)		3,205			(2,215	)		4,268			990			(8,116	)
Deferred taxes		85			98			(84	)		183			(11	)
Changes in assets and liabilities, net of assets acquired and liabilities assumed in business combinations:
Accounts receivable, net		(8,509	)		40,396			5,364			31,887			36,054
Inventories		(5,806	)		(16,441	)		54,242			(22,247	)		73,582
Prepaid expenses and other assets		14,438			(8,095	)		11,015			6,343			43,458
Accounts payable		(5,863	)		(8,547	)		10,147			(14,410	)		(53,388	)
Accrued and other liabilities		(22,376	)		(16,989	)		(37,666	)		(39,365	)		(33,762	)
Net cash provided by operating activities		67,617			105,778			68,912			173,395			59,065
Investing activities:
Purchases of debt securities available-for-sale		(1,189	)		—			—			(1,189	)		(10	)
Proceeds from maturities and sales of debt securities available-for-sale		10,271			11,254			28,063			21,525			63,945
Purchases of equity securities		(316	)		—			—			(316	)		(5,000	)
Purchases of property, equipment and software		(21,097	)		(27,276	)		(23,138	)		(48,373	)		(48,601	)
Proceeds from sale of property and equipment		177			22			105			199			112
Acquisition of business and companies, net of cash acquired		—			—			(20,840	)		—			(20,840	)
Decrease in non-current assets and deposits		—			—			13,501			—			13,501
Net cash (used in)/provided by investing activities		(12,154	)		(16,000	)		(2,309	)		(28,154	)		3,107
Financing activities:
Redemption of convertible subordinated notes		—			—			(244,047	)		—			(244,047	)
Repayment of debt obligations		(349,999	)		—			—			(349,999	)		—
Issuance of common stock		17,953			3,635			6,672			21,588			6,673
Purchase of common stock under repurchase programs		(54,524	)		(26,208	)		—			(80,732	)		—
Net cash used in financing activities		(386,570	)		(22,573	)		(237,375	)		(409,143	)		(237,374	)
Effect of exchange rate changes on cash and cash equivalents		(895	)		(2,117	)		3,221			(3,012	)		855
Net change in cash and cash equivalents		(332,002	)		65,088			(167,551	)		(266,914	)		(174,347	)
Cash and cash equivalents at beginning of period		843,379			778,291			822,505			778,291			829,301
Cash and cash equivalents at end of period	$	511,377		$	843,379		$	654,954		$	511,377		$	654,954

* Depreciation of fixed assets and amortization of intangible assets, software, capitalized intellectual property, premiums on short-term investments, debt issuance costs, and accrued debt premium.

LSI CORPORATION
Selected Financial Information (GAAP)
(In millions)

(Unaudited)

	Three Months Ended
	July 4,			April 4,			July 5,
	2010			2010			2009
Semiconductor revenues	$	416.7		$	416.5		$	343.8
Storage Systems revenues	$	222.7		$	220.7		$	176.9
Total revenues	$	639.4		$	637.2		$	520.7
Percentage change in revenues-qtr./qtr. ( a )		0.3	%		-0.1	%		8.0	%
Percentage change in revenues-yr./yr. ( b )		22.8	%		32.1	%		-24.8	%
Days sales outstanding		43			42			46
Days of inventory		47			46			42
Current ratio		2.6			1.9			1.8
Quick ratio		2.0			1.5			1.4
Gross margin as a percentage of revenues		43.1	%		42.6	%		34.7	%
R&D as a percentage of revenues		26.8	%		26.2	%		28.6	%
SG&A as a percentage of revenues		13.4	%		13.5	%		15.7	%
Employees ( c )		5,612			5,451			5,357
Revenues per employee (in thousands) ( d )	$	455.7		$	467.6		$	388.8
Selected Cash Flow Information:
Purchases of property and equipment ( e )	$	13.3		$	15.2		$	7.7
Depreciation and amortization ( f )	$	25.8		$	26.3		$	23.2

(a)	Represents a sequential quarterly change in revenues.
(b)	Represents a change in revenues in the quarter presented as compared to the same quarter of the previous year.
(c)	Actual number of employees at the end of each period presented.
(d)	Revenues per employee is calculated by annualizing revenues for each quarter presented and dividing it by the number of employees.
(e)	Excludes purchases of software.
(f)	Represents depreciation of fixed assets and amortization of software.