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) October 27, 2010

LSI CORPORATION

(Exact name of registrant as specified in its charter)

DELAWARE	1-10317	94-2712976
(State or other jurisdiction of	(Commission File Number)	(IRS Employer Identification
incorporation)		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 October 27, 2010, LSI Corporation issued a news release regarding its financial results for the quarter ended October 3, 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 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 October 27, 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: October 27, 2010

EXHIBIT INDEX

Exhibit No.	Description
99.1	News Release issued October 27, 2010.*

* Furnished, not filed.

EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE	OCTOBER 27, 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

cc10-70

LSI Reports Third Quarter 2010 Results

MILPITAS, Calif., October 27, 2010 — LSI Corporation (NYSE: LSI) today reported results for its third quarter ended October 3, 2010.

Third Quarter 2010 News Release Summary

n	Third quarter 2010 revenues of $629 million
n	Third quarter 2010 GAAP* net income of 4 cents per diluted share
n	Third quarter 2010 non-GAAP** net income of 13 cents per diluted share
n	Third quarter operating cash flows of $82 million

Fourth Quarter 2010 Business Outlook

n	Projected revenues of $635 million to $665 million
n	GAAP* net (loss)/income in the range of ($0.01) to $0.08 per share
n	Non-GAAP** net income in the range of $0.10 to $0.16 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, gain on sale/write-down of securities and gain on repurchase of convertible subordinated notes. It also excludes the income tax effect associated with the above mentioned items.

Third quarter 2010 revenues were $629 million, a 9% increase year-over-year compared to $578 million reported in the third quarter of 2009, and compares to $639 million reported in the second quarter of 2010.

Third quarter 2010 GAAP* net income was $23 million or 4 cents per diluted share, compared to third quarter 2009 GAAP net income of $52 million or 8 cents per diluted share. Third quarter 2009 GAAP results included a tax benefit of $65 million, or 10 cents per diluted share. Third quarter 2010 GAAP results compare to second quarter 2010 GAAP net income of $7 million or 1 cent per diluted share. Third quarter 2010 GAAP net income included a net charge of $56 million from special items, consisting primarily of $40 million of amortization of acquisition-related items, $17 million of stock-based compensation expense, $4 million of net restructuring and other items, and $5 million of gain on the sale of securities.

Third quarter 2010 non-GAAP** net income was $79 million or 13 cents per diluted share, compared to third quarter 2009 non-GAAP net income of $119 million or 18 cents per diluted share. Third quarter 2009 non-GAAP results included earnings of 10 cents per diluted share reflecting the above-mentioned tax benefit. Second quarter 2010 non-GAAP net income was $71 million or 11 cents per diluted share.

Cash and short-term investments totaled approximately $601 million at quarter end. The company completed third-quarter purchases of approximately 32 million shares of its common stock for approximately $137 million. On a year-to-date basis, the company has purchased approximately 46 million shares of its common stock for approximately $218 million under its $250 million share repurchase program.

“Healthy growth in our storage systems business coupled with strong execution contributed to solid operating performance, with net income near the high end of our guidance range, despite some end-market softness and related customer inventory adjustments that affected sequential revenues,” said Abhi Talwalkar, LSI president and chief executive officer. “While end-market demand challenges could continue, we expect to benefit from new product ramps in 2011 as several of our design wins with top-tier storage and networking customers transition to production.”

Bryon Look, LSI CFO and chief administrative officer, said, “Our third quarter results reflect a continuing, strong focus on achieving our business model targets. Gross margins were at the high end of our guidance range, showing solid quarterly expansion and much improvement versus year-ago levels, while operating margins continued to grow on a sequential basis and were sharply higher year over year. Operating cash flows grew 21% sequentially to $82 million and were $256 million on a year-to-date basis, approximately double the $128 million recorded in the same period last year.”

LSI Fourth Quarter 2010 Business Outlook

	GAAP*	Special Items	Non-GAAP**
Revenue	$635 million to $665 million		$635 million to $665 million
Gross Margin	41% — 45%	$30 million to $40 million	47% — 49%
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 $10 million		Approximately $10 million
Net (Loss)/Income Per Share	($0.01) to $0.08	($0.08) to ($0.11)	$0.10 to $0.16
Diluted Share Count	620 million		620 million

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

Depreciation and software amortization is projected to be around $27 million in the fourth quarter and approximately $107 million in total for 2010.

LSI Conference Call Information

LSI will hold a conference call today at 2 p.m. PDT to discuss third quarter financial results and the fourth 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)

	October 3,			July 4,			December 31,
	2010			2010			2009
Assets
Current assets:
Cash and short-term investments	$	600.8		$	669.8		$	962.1
Accounts receivable, net		313.9			307.1			339.0
Inventories		220.1			191.6			169.3
Prepaid expenses and other current assets		103.4			110.5			115.1
Total current assets		1,238.2			1,279.0			1,585.5
Property and equipment, net		208.8			212.8			219.0
Goodwill and identified intangible assets, net		807.2			847.5			927.9
Other assets		221.4			224.8			235.5
Total assets	$	2,475.6		$	2,564.1		$	2,967.9
Liabilities and Stockholders’ Equity
Current liabilities:
Current portion of long-term debt	$	—		$	—		$	350.0
Other current liabilities		499.3			489.6			504.4
Total current liabilities		499.3			489.6			854.4
Pension, tax and other liabilities		599.9			609.8			652.4
Total liabilities		1,099.2			1,099.4			1,506.8
Stockholders’ equity:
Common stock and additional paid-in capital		6,003.9			6,123.8			6,149.2
Accumulated deficit		(4,355.1	)		(4,378.5	)		(4,408.5	)
Accumulated other comprehensive loss		(272.4	)		(280.6	)		(279.6	)
Total stockholders’ equity		1,376.4			1,464.7			1,461.1
Total liabilities and stockholders’ equity	$	2,475.6		$	2,564.1		$	2,967.9

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

	Three Months Ended								Nine Months Ended
	October 3,		July 4,			October 4,			October 3,			October 4,
	2010		2010			2009			2010			2009
Revenues	$	628,984	$	639,405		$	578,419		$	1,905,571		$	1,581,363
Cost of revenues		319,061		330,194			315,067			982,192			892,984
Purchase accounting effect on inventory		—		—			1,892			—			4,442
Amortization of acquisition-related intangibles		31,288		31,288			34,177			93,864			101,654
Stock-based compensation expense		2,109		2,292			1,697			6,113			5,732
Total cost of revenues		352,458		363,774			352,833			1,082,169			1,004,812
Gross profit		276,526		275,631			225,586			823,402			576,551
Research and development		158,558		162,509			144,661			480,041			433,807
Stock-based compensation expense		7,714		8,644			6,386			24,256			21,443
Total research and development		166,272		171,153			151,047			504,297			455,250
Selling, general and administrative		69,272		69,304			66,323			209,139			197,661
Amortization of acquisition-related intangibles		8,948		8,948			9,123			26,844			27,369
Stock-based compensation expense		7,135		7,559			6,729			21,515			22,629
Total selling, general and administrative		85,355		85,811			82,175			257,498			247,659
Restructuring of operations and other items, net		3,693		5,067			4,745			10,380			35,960
Income/(loss) from operations		21,206		13,600			(12,381	)		51,227			(162,318	)
Interest expense		—		(1,707	)		(3,899	)		(5,601	)		(17,999	)
Interest income and other, net		10,315		4,639			3,535			6,147			15,742
Income/(loss) before income taxes		31,521		16,532			(12,745	)		51,773			(164,575	)
Provision/(benefit) for income taxes		8,100		9,100			(65,230	)		(1,600	)		(52,030	)
Net income/(loss)	$	23,421	$	7,432		$	52,485		$	53,373		$	(112,545	)
Net income/(loss) per share:
Basic	$	0.04	$	0.01		$	0.08		$	0.08		$	(0.17	)
Diluted	$	0.04	$	0.01		$	0.08		$	0.08		$	(0.17	)
Shares used in computing per share amounts:
Basic		629,852		651,778			651,865			646,167			650,183
Diluted		633,731		661,540			658,963			653,685			650,183

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

	Three Months Ended							Nine Months Ended
Reconciliation of GAAP net income/(loss) to	October 3,			July 4,		October 4,		October 3,		October 4,
non-GAAP net income:	2010			2010		2009		2010		2009
GAAP net income/(loss)	$	23,421		$	7,432	$	52,485	$	53,373	$	(112,545	)
Special items:
a) Stock-based compensation expense — cost of revenues		2,109			2,292		1,697		6,113		5,732
b) Stock-based compensation expense — R&D		7,714			8,644		6,386		24,256		21,443
c) Stock-based compensation expense — SG&A		7,135			7,559		6,729		21,515		22,629
d) Amortization of acquisition-related intangibles — cost of revenues		31,288			31,288		34,177		93,864		101,654
e) Amortization of acquisition-related intangibles — SG&A		8,948			8,948		9,123		26,844		27,369
f) Purchase accounting effect on inventory		—			—		1,892		—		4,442
g) Restructuring of operations and other items, net		3,693			5,067		4,745		10,380		35,960
h) (Gain) on sale/write-down of securities, net		(4,821	)		—		1,650		6,779		1,650
Total special items		56,066			63,798		66,399		189,751		220,879
Non-GAAP net income	$	79,487		$	71,230	$	118,884	$	243,124	$	108,334
Non-GAAP net income per share:
Basic	$	0.13		$	0.11	$	0.18	$	0.38	$	0.17
Diluted *	$	0.13		$	0.11	$	0.18	$	0.37	$	0.17
Shares used in computing non-GAAP per share amounts:
Basic		629,852			651,778		651,865		646,167		650,183
Diluted		633,731			661,540		685,043		653,685		655,460

* In computing non-GAAP diluted earnings per share for three months ended October 4, 2009, 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						Nine Months Ended
Reconciliation of GAAP to non-GAAP shares used in the calculation	October 3,		July 4,		October 4,		October 3,		October 4,
of diluted per share amounts:	2010		2010		2009		2010		2009
Diluted shares used in per share computation — GAAP		633,731		661,540		658,963		653,685		650,183
Dilutive stock awards		—		—		—		—		5,277
Effect of $350 million convertible notes considered dilutive		—		—		26,080		—		—
Diluted shares used in per share computation — non-GAAP		633,731		661,540		685,043		653,685		655,460

LSI CORPORATION
Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)

	Three Months Ended									Nine Months Ended
	October 3,			July 4,			October 4,			October 3,			October 4,
	2010			2010			2009			2010			2009
Operating activities:
Net income/(loss)	$	23,421		$	7,432		$	52,485		$	53,373		$	(112,545	)
Adjustments:
Depreciation and amortization *		67,450			66,251			67,600			200,718			198,918
Stock-based compensation expense		16,958			18,495			14,812			51,884			49,804
Gain on redemption of convertible subordinated notes		—			—			—			—			(149	)
(Gain) on sale/write-down of securities, net		(4,821	)		—			1,529			6,779			1,529
(Gain)/loss on sale of property and equipment		(115	)		265			(337	)		153			(220	)
Unrealized foreign exchange loss		5,384			3,205			8,431			6,374			315
Deferred taxes		(149	)		85			(242	)		34			(253	)
Changes in assets and liabilities, net of assets acquired and liabilities assumed in business combinations:
Accounts receivable, net		(6,793	)		(8,509	)		(39,271	)		25,094			(3,217	)
Inventories		(28,538	)		(5,806	)		4,824			(50,785	)		78,406
Prepaid expenses and other assets		7,555			14,438			4,814			13,898			48,272
Accounts payable		(9,131	)		(5,863	)		46,807			(23,541	)		(6,581	)
Accrued and other liabilities		10,919			(22,376	)		(92,794	)		(28,446	)		(126,556	)
Net cash provided by operating activities		82,140			67,617			68,658			255,535			127,723
Investing activities:
Purchases of debt securities available-for-sale		(23,029	)		(1,189	)		—			(24,218	)		(10	)
Proceeds from maturities and sales of debt securities available-for-sale		14,684			10,271			13,695			36,209			77,640
Purchases of equity securities		—			(316	)		(4,534	)		(316	)		(9,534	)
Proceeds from sales of securities		9,795			—			165			9,795			165
Purchases of property, equipment and software		(18,889	)		(21,097	)		(20,137	)		(67,262	)		(68,738	)
Proceeds from sale of property and equipment		360			177			2,637			559			2,749
Acquisition of business and companies, net of cash acquired		—			—			(26,141	)		—			(46,981	)
Decrease in non-current assets and deposits		—			—			—			—			13,501
Proceeds from maturity of notes receivable associated with sale of semiconductor operations in Thailand		—			—			10,000			—			10,000
Net cash used in investing activities		(17,079	)		(12,154	)		(24,315	)		(45,233	)		(21,208	)
Financing activities:
Redemption of convertible subordinated notes		—			—			—			—			(244,047	)
Repayment of debt obligations		—			(349,999	)		—			(349,999	)		—
Issuance of common stock		469			17,953			3,367			22,057			10,040
Purchase of common stock under repurchase programs		(137,011	)		(54,524	)		—			(217,743	)		—
Net cash (used in)/provided by financing activities		(136,542	)		(386,570	)		3,367			(545,685	)		(234,007	)
Effect of exchange rate changes on cash and cash equivalents		(915	)		(895	)		2,721			(3,927	)		3,576
Net change in cash and cash equivalents		(72,396	)		(332,002	)		50,431			(339,310	)		(123,916	)
Cash and cash equivalents at beginning of period		511,377			843,379			654,954			778,291			829,301
Cash and cash equivalents at end of period	$	438,981		$	511,377		$	705,385		$	438,981		$	705,385

* 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
	October 3,			July 4,			October 4,
	2010			2010			2009
Semiconductor revenues	$	390.1		$	416.7		$	371.8
Storage Systems revenues	$	238.9		$	222.7		$	206.6
Total revenues	$	629.0		$	639.4		$	578.4
Percentage change in revenues-qtr./qtr. ( a )		-1.6	%		0.3	%		11.1	%
Percentage change in revenues-yr./yr. ( b )		8.7	%		22.8	%		-19.0	%
Days sales outstanding		45			43			48
Days of inventory		56			47			40
Current ratio		2.5			2.6			1.8
Quick ratio		1.8			2.0			1.5
Gross margin as a percentage of revenues		44.0	%		43.1	%		39.0	%
R&D as a percentage of revenues		26.4	%		26.8	%		26.1	%
SG&A as a percentage of revenues		13.6	%		13.4	%		14.2	%
Employees ( c )		5,640			5,612			5,318
Revenues per employee (in thousands) ( d )	$	446.1		$	455.7		$	435.1
Selected Cash Flow Information:
Purchases of property and equipment ( e )	$	11.1		$	13.3		$	11.4
Depreciation and amortization ( f )	$	27.2		$	25.8		$	23.9

( 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.