Fromtime to time, subject to the review and approval of the audit committee of theBoard of Directors, we may make other adjustments for expenses and gains that wedo not consider reflective of core operating performance in a particular periodand may modify the Non-GAAP Measures by excluding these expenses and gains. We define our core operating performance to be the revenues recorded in aparticular period and the expenses incurred within that period which managementhas the capability of directly affecting in order to drive operating income.Non-cash stock-based compensation, amortization of acquisition-relatedintangible assets, restructuring charges, impairment charges to our ARS, theimputed interest expense on our convertible notes, and gains or losses on assetsheld for employees in a deferred compensation plan are excluded from our coreoperating performance because the decisions which gave rise to these expenseswere not made to drive revenue in a particular period, but rather were made forour long-term benefit over multiple periods. While strategic decisions, such asthe decisions to issue stock-based compensation, to acquire a company or torestructure the organization, are made to further our long-term strategicobjectives and do impact our income statement under GAAP, these items affectmultiple periods and management is not able to change or affect these itemswithin any particular period. As such, supplementing GAAP disclosure withnon-GAAP disclosure using the Non-GAAP Measures provides management with anadditional view of operational performance by excluding expenses that are notdirectly related to performance in any particular period. Therefore, we excludethese impacts in our planning, monitoring, evaluation and reporting of ourunderlying revenue-generating operations for a particular period. Prior to the adoption of Financial Accounting Standards Board Statement 123Revised “Share-based Payment” (“FAS 123R”) on January 1, 2006, our practice wasto exclude stock-based compensation internally to evaluate performance and wepresented investors with certain Non-GAAP Measures. With the adoption of FAS123R, we continue to believe that Non-GAAP Measures can provide relevantdisclosure to investors as contemplated by Staff Accounting Bulletin 107 (“SAB107″) and we have presented Non-GAAP Measures that exclude stock-basedcompensation, amortization of acquisition-related intangible assets, impairmentcharges to ARS, imputed interest expense, restructuring costs and the relatedtax effects.

While these items (other than restructuring) are recurring andaffect GAAP net income, we do not use them to assess our operational performancefor any particular period because (a) these items affect multiple periods andare unrelated to business performance in a particular period; (b) we are notable to change these items in any particular period; and (c) these items do notcontribute to the operational performance of our business for any particularperiod. We also use Non-GAAP Measures to operate the business because the excludedexpenses are not under the control of, and accordingly are not used inevaluating the performance of, operations personnel within their respectiveareas of responsibility. In the case of stock-based compensation expense, theaward of stock options is governed by the stock committee of the Board ofDirectors and, in the case of acquisition-related intangible assets;acquisitions arise from strategic decisions which are not the responsibility ofmost levels of operational management. The restructuring charges, like ourstock-based compensation charges, amortization of acquisition-related intangibleassets, and write-downs to ARS, the imputed interest expense on our convertiblenotes, and gains or losses on assets held for employees in a deferredcompensation plan, are excluded in management`s internal evaluations of ouroperating results and are not considered for management compensation purposes. In the case of stock-based compensation, our compensation strategy is to usestock-based compensation to attract and retain key employees and executives. Itis principally aimed at long term employee retention, rather than to motivate orreward operational performance for any particular period. Thus, stock-basedcompensation expense varies for reasons that are generally unrelated tooperational performance in any particular period.

We use annual cash incentivepayouts for executives and other employees to motivate and reward theachievement of short-term operational objectives. We view amortization of acquisition-related intangible assets, such as theamortization of an acquired company`s research and development efforts, customerlists and customer relationships, as items arising from pre-acquisitionactivities. These are costs that are determined at the time of an acquisition.While it is continually viewed for impairment, amortization of the cost is astatic expense, one that is typically not affected by operations during anyparticular period and does not contribute to operational performance for anyparticular period. The cost of restructure charges are excluded in our Non-GAAP Measures becausethey are significantly different in magnitude and character from routinepersonnel and facility adjustments that management makes when monitoring andconducting the Company`s core operations during any particular period.

We havenot undertaken restructuring since 2004 and amounts included in cost ofrestructure in 2006 and subsequently reflect lease termination costs frompreviously announced restructuring efforts. Our previous restructuringactivities and related expenses were not related to operating performance forany particular period, and were not subject to change by management in anyparticular period. Instead, the prior restructuring was intended to align ourbusiness model and expense structure to our position in the market. The liquidity and fair value of our investments in marketable securities,including auction rate securities, have been negatively impacted by theuncertainty in the credit markets and failed auctions due to a lack ofmarketability of these securities. As a result, we recorded impairment chargesto reduce the carrying value of our ARS investments. The impairment chargesrelated to our ARS investments have been excluded from our non-GAAP results ofoperations. These impairment charges are excluded from management`s assessmentof our operating performance because management believes that they are notindicative of our ongoing business operations.

We believe that the exclusion ofthese unique charges provide investors an enhanced view of our operations andfacilitates comparisons with the results of other periods. In 2009, GAAP changedto require that issuers of certain convertible debt instruments that may besettled in cash (or other assets) on conversion to separately account for theliability (debt) and equity (conversion option) components of the instrument ina manner that reflects the issuer`s non-convertible debt borrowing rate.Accordingly, for GAAP purposes we are required to recognize imputed interestexpense on our $460 million of 1.75% convertible subordinated notes that wereissued a private placement in February 2005, the “imputed interest expense.” Theimputed interest expense is excluded from management`s assessment of ouroperating performance because management believes that this is not indicative ofour ongoing business operations. We believe that the exclusion of the imputedinterest expense provides investors an enhanced view of our operationalperformance and will facilitate the comparisons of future reported results withresults from periods prior to the GAAP requirement to recognize imputed interestexpense. We maintain a rabbi trust for our deferred compensation plan that wasestablished to allow certain employees the opportunity to defer the receipt ofcompensation. Plan participants elect to defer a portion of their compensationand these amounts are deemed invested in investment options that mirror theparticipants` 401(k) plan investment elections.