|
|
x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
¨
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
|
Delaware
|
06-1364380
|
(State or other jurisdiction of
incorporation or organization)
|
(I.R.S. Employer
Identification No.)
|
|
|
Large accelerated filer
|
x
|
|
Accelerated filer
|
¨
|
|
|
Non-accelerated filer
|
¨
|
|
Smaller reporting company
|
¨
|
|
|
|
|
|
Emerging growth company
|
¨
|
|
|
|
Page
|
|
|
|
|
PART I
FINANCIAL INFORMATION
|
|
ITEM 1:
|
|
|
|
Consolidated Balance Sheets at May 31, 2018 (unaudited) and February 28, 2018 (derived from audited financial statements)
|
|
|
Consolidated Statements of Operations for the three months ended May 31, 2018 (unaudited) and 2017 (unaudited)
|
|
|
Consolidated Statements of Comprehensive Income for the three months ended May 31, 2018 (unaudited) and 2017 (unaudited)
|
|
|
Consolidated Statements of Cash Flows for the three months ended May 31, 2018 (unaudited) and 2017 (unaudited)
|
|
|
||
|
NOTE 1—Company
|
|
|
NOTE 2—Summary of Significant Accounting Policies
|
|
|
NOTE 3—Accounts Receivable
|
|
|
NOTE 4—Identifiable Intangible Assets
|
|
|
NOTE 5—Deferred Selling Costs
|
|
|
NOTE 6—Derivative Instruments
|
|
|
NOTE 7—Income Taxes
|
|
|
NOTE 8—Convertible Notes
|
|
|
NOTE 9—Commitments and Contingencies
|
|
|
NOTE 10—Legal Proceedings
|
|
|
NOTE 11—Stockholders’ Equity
|
|
|
NOTE 12—Deferred Revenue and Performance Obligations
|
|
|
NOTE 13—Earnings Per Share
|
|
|
NOTE 14—Share-based Awards
|
|
|
NOTE 15—Assets and Liabilities Measured at Fair Value on a Recurring Basis
|
|
|
NOTE 16—Segment Reporting
|
|
|
NOTE 17—Business Combinations
|
|
|
NOTE 18—Subsequent Events
|
|
|
|
|
ITEM 2:
|
||
ITEM 3:
|
||
ITEM 4:
|
||
|
|
|
|
PART II
OTHER INFORMATION
|
|
ITEM 1:
|
||
ITEM 1A:
|
||
ITEM 2:
|
||
ITEM 6:
|
||
|
|
|
ITEM 1.
|
FINANCIAL STATEMENTS
|
|
May 31, 2018 (Unaudited)
|
|
February 28, 2018 (1)
|
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash, cash equivalents and restricted cash
|
$
|
1,768,480
|
|
|
$
|
1,724,132
|
|
Investments in debt and equity securities, short-term
|
329,872
|
|
|
318,358
|
|
||
Accounts receivable, net of allowances for doubtful accounts of $2,566 and $2,167, respectively
|
498,964
|
|
|
806,744
|
|
||
Prepaid expenses
|
247,175
|
|
|
267,197
|
|
||
Other current assets
|
61,123
|
|
|
25,666
|
|
||
Total current assets
|
2,905,614
|
|
|
3,142,097
|
|
||
Property and equipment, net of accumulated depreciation and amortization of $281,523 and $269,429, respectively
|
196,653
|
|
|
206,105
|
|
||
Goodwill
|
1,278,708
|
|
|
1,288,830
|
|
||
Identifiable intangibles, net
|
220,176
|
|
|
224,953
|
|
||
Investments in debt securities, long-term
|
428,777
|
|
|
430,442
|
|
||
Deferred tax assets, net
|
82,826
|
|
|
92,606
|
|
||
Other assets, net
|
78,807
|
|
|
89,460
|
|
||
Total assets
|
$
|
5,191,561
|
|
|
$
|
5,474,493
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable and accrued expenses
|
$
|
359,706
|
|
|
$
|
427,139
|
|
Deferred revenue, short-term
|
1,721,300
|
|
|
1,853,719
|
|
||
Other current obligations
|
685
|
|
|
843
|
|
||
Convertible notes
|
194,544
|
|
|
23,806
|
|
||
Total current liabilities
|
2,276,235
|
|
|
2,305,507
|
|
||
Deferred revenue, long-term
|
723,207
|
|
|
741,453
|
|
||
Convertible notes
|
554,503
|
|
|
744,194
|
|
||
Other long-term obligations
|
205,672
|
|
|
205,215
|
|
||
Commitments and contingencies (NOTES 9 and 10)
|
|
|
|
||||
Stockholders’ equity:
|
|
|
|
||||
Preferred stock, $0.0001 per share par value, 5,000,000 shares authorized, none outstanding
|
—
|
|
|
—
|
|
||
Common stock, $0.0001 per share par value, 300,000,000 shares authorized, 239,779,276 and 238,688,708 shares issued, and 177,472,140 and 177,073,904 shares outstanding, respectively
|
24
|
|
|
24
|
|
||
Additional paid-in capital
|
2,399,925
|
|
|
2,416,080
|
|
||
Retained earnings
|
1,733,270
|
|
|
1,619,688
|
|
||
Treasury stock, at cost, 62,307,136 and 61,614,804 shares, respectively
|
(2,657,774
|
)
|
|
(2,525,072
|
)
|
||
Accumulated other comprehensive loss
|
(43,501
|
)
|
|
(32,596
|
)
|
||
Total stockholders’ equity
|
1,431,944
|
|
|
1,478,124
|
|
||
Total liabilities and stockholders’ equity
|
$
|
5,191,561
|
|
|
$
|
5,474,493
|
|
(1)
|
Derived from audited financial statements except for line items adjusted by the retrospective application of ASC 606. See NOTE 2—Summary of Significant Accounting Policies for detailed information on adoption of ASC 606
.
|
|
|
Three Months Ended
|
||||||
|
|
May 31,
2018 |
|
May 31,
2017 (1) |
||||
Revenue:
|
|
|
|
|
||||
Subscriptions
|
|
$
|
711,521
|
|
|
$
|
596,508
|
|
Training and services
|
|
102,009
|
|
|
80,288
|
|
||
Total revenue
|
|
813,530
|
|
|
676,796
|
|
||
Cost of revenue:
|
|
|
|
|
||||
Subscriptions
|
|
52,173
|
|
|
43,633
|
|
||
Training and services
|
|
70,526
|
|
|
57,063
|
|
||
Total cost of revenue
|
|
122,699
|
|
|
100,696
|
|
||
Gross profit
|
|
690,831
|
|
|
576,100
|
|
||
Operating expense:
|
|
|
|
|
||||
Sales and marketing
|
|
348,815
|
|
|
294,323
|
|
||
Research and development
|
|
166,506
|
|
|
137,163
|
|
||
General and administrative
|
|
63,354
|
|
|
54,870
|
|
||
Total operating expense
|
|
578,675
|
|
|
486,356
|
|
||
Income from operations
|
|
112,156
|
|
|
89,744
|
|
||
Interest income
|
|
7,834
|
|
|
3,993
|
|
||
Interest expense
|
|
6,319
|
|
|
6,085
|
|
||
Other expense, net
|
|
(2,194
|
)
|
|
(586
|
)
|
||
Income before provision for income taxes
|
|
111,477
|
|
|
87,066
|
|
||
(Benefit) provision for income taxes
|
|
(1,713
|
)
|
|
11,752
|
|
||
Net income
|
|
$
|
113,190
|
|
|
$
|
75,314
|
|
Net income per share:
|
|
|
|
|
||||
Basic
|
|
$
|
0.64
|
|
|
$
|
0.42
|
|
Diluted
|
|
$
|
0.59
|
|
|
$
|
0.41
|
|
Weighted average shares outstanding:
|
|
|
|
|
||||
Basic
|
|
177,302
|
|
|
177,243
|
|
||
Diluted
|
|
190,739
|
|
|
181,810
|
|
(1)
|
As adjusted to reflect the impact of the retrospective application of ASC 606. See NOTE 2—Summary of Significant Accounting Policies for detailed information on adoption of ASC 606.
|
|
|
Three Months Ended
|
||||||
|
|
May 31,
2018 |
|
May 31,
2017 (1) |
||||
Net income
|
|
$
|
113,190
|
|
|
$
|
75,314
|
|
Other comprehensive income (loss):
|
|
|
|
|
||||
Change in foreign currency translation adjustment
|
|
(10,831
|
)
|
|
22,670
|
|
||
Available-for-sale securities:
|
|
|
|
|
||||
Unrealized gain on available-for-sale securities during the period
|
|
38
|
|
|
164
|
|
||
Reclassification for gain realized on available-for-sale securities, reported in Other expense, net
|
|
(128
|
)
|
|
—
|
|
||
Tax benefit (expense)
|
|
16
|
|
|
(222
|
)
|
||
Net change in available-for-sale securities (net of tax)
|
|
(74
|
)
|
|
(58
|
)
|
||
Total other comprehensive (loss) income
|
|
(10,905
|
)
|
|
22,612
|
|
||
Comprehensive income
|
|
$
|
102,285
|
|
|
$
|
97,926
|
|
(1)
|
As adjusted to reflect the impact of the retrospective application of ASC 606. See NOTE 2—Summary of Significant Accounting Policies for detailed information on adoption of ASC 606.
|
|
Three Months Ended
|
||||||
|
May 31, 2018
|
|
May 31, 2017 (1)
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net income
|
$
|
113,190
|
|
|
$
|
75,314
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization
|
27,054
|
|
|
21,817
|
|
||
Amortization of debt discount and transaction costs
|
5,838
|
|
|
5,540
|
|
||
Deferred income taxes
|
(3,395
|
)
|
|
7,917
|
|
||
Share-based compensation expense
|
46,005
|
|
|
43,718
|
|
||
Net amortization of bond premium on debt securities available for sale
|
743
|
|
|
2,436
|
|
||
Other
|
1,097
|
|
|
961
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Accounts receivable
|
299,439
|
|
|
208,761
|
|
||
Other receivables
|
(35,160
|
)
|
|
(19,397
|
)
|
||
Prepaid expenses
|
25,382
|
|
|
12,024
|
|
||
Accounts payable and accrued expenses
|
(28,642
|
)
|
|
(55,326
|
)
|
||
Deferred revenue
|
(104,592
|
)
|
|
(45,717
|
)
|
||
Other
|
(800
|
)
|
|
(176
|
)
|
||
Net cash provided by operating activities
|
346,159
|
|
|
257,872
|
|
||
Cash flows from investing activities:
|
|
|
|
||||
Purchase of investment in debt securities available for sale
|
(108,336
|
)
|
|
(149,524
|
)
|
||
Proceeds from maturities of investment in debt securities available for sale
|
87,004
|
|
|
112,041
|
|
||
Proceeds from sales of investment in debt securities available for sale
|
525
|
|
|
14,324
|
|
||
Proceeds from sales of strategic equity investments
|
1,300
|
|
|
—
|
|
||
Purchase of developed software and other intangible assets
|
(2,866
|
)
|
|
(1,774
|
)
|
||
Purchase of property and equipment
|
(12,963
|
)
|
|
(25,900
|
)
|
||
Other
|
(986
|
)
|
|
—
|
|
||
Net cash used in investing activities
|
(36,322
|
)
|
|
(50,833
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Proceeds from exercise of common stock options
|
875
|
|
|
2,968
|
|
||
Proceeds from employee stock purchase program
|
15,262
|
|
|
11,761
|
|
||
Payments related to net settlement of share-based compensation awards
|
(77,094
|
)
|
|
(41,010
|
)
|
||
Purchase of treasury stock
|
(150,019
|
)
|
|
(61,987
|
)
|
||
Payments on other borrowings
|
(299
|
)
|
|
(443
|
)
|
||
Repayments of convertible notes
|
(25,953
|
)
|
|
—
|
|
||
Net cash used in financing activities
|
(237,228
|
)
|
|
(88,711
|
)
|
||
Effect of foreign currency exchange rates on cash, cash equivalents and restricted cash
|
(28,261
|
)
|
|
21,321
|
|
||
Net increase in cash, cash equivalents and restricted cash
|
44,348
|
|
|
139,649
|
|
||
Cash, cash equivalents and restricted cash at beginning of the period
|
1,724,132
|
|
|
1,090,808
|
|
||
Cash, cash equivalents and restricted cash at end of the period
|
$
|
1,768,480
|
|
|
$
|
1,230,457
|
|
Restricted cash included in cash, cash equivalents and restricted cash
|
$
|
1,137
|
|
|
$
|
3,112
|
|
(1)
|
As adjusted to reflect the impact of the retrospective application of ASC 606. See NOTE 2—Summary of Significant Accounting Policies for detailed information on adoption of ASC 606.
|
|
February 28, 2018
|
||||||||||
|
As Reported
|
|
Adjustments
|
|
As Adjusted
|
||||||
Prepaid expenses
|
$
|
260,092
|
|
|
$
|
7,105
|
|
|
$
|
267,197
|
|
Deferred tax assets, net
|
$
|
93,300
|
|
|
$
|
(694
|
)
|
|
$
|
92,606
|
|
Other assets, net
|
$
|
87,924
|
|
|
$
|
1,536
|
|
|
$
|
89,460
|
|
Accounts payable and accrued expenses
|
$
|
427,086
|
|
|
$
|
53
|
|
|
$
|
427,139
|
|
Retained earnings
|
$
|
1,611,794
|
|
|
$
|
7,894
|
|
|
$
|
1,619,688
|
|
|
Three Months Ended May 31, 2017
|
||||||||||
|
As Reported
|
|
Adjustments
|
|
As Adjusted
|
||||||
Operating expense:
|
|
|
|
|
|
|
|
|
|||
Sales and marketing
|
$
|
296,459
|
|
|
$
|
(2,136
|
)
|
|
$
|
294,323
|
|
Net income
|
$
|
73,190
|
|
|
$
|
2,124
|
|
|
$
|
75,314
|
|
Net income per share:
|
|
|
|
|
|
|
|
|
|||
Basic
|
$
|
0.41
|
|
|
$
|
0.01
|
|
|
$
|
0.42
|
|
Diluted
|
$
|
0.40
|
|
|
$
|
0.01
|
|
|
$
|
0.41
|
|
As of
|
|
Balance at
beginning
of period
|
|
Charged to (recovery of)
expense
|
|
Adjustments
(1)
|
|
Balance at
end of
period
|
||||||
February 28, 2018
|
|
$
|
2,791
|
|
|
172
|
|
|
(796
|
)
|
|
$
|
2,167
|
|
May 31, 2018
|
|
$
|
2,167
|
|
|
562
|
|
|
(163
|
)
|
|
$
|
2,566
|
|
(1)
|
Represents foreign currency translation adjustments and amounts written-off as uncollectible accounts receivable.
|
|
May 31, 2018
|
|
February 28, 2018
|
||||||||||||||||||||
|
Gross
Amount |
|
Accumulated
Amortization |
|
Net
Amount |
|
Gross
Amount |
|
Accumulated
Amortization |
|
Net
Amount |
||||||||||||
Trademarks, copyrights and patents
|
$
|
169,385
|
|
|
$
|
(73,732
|
)
|
|
$
|
95,653
|
|
|
$
|
167,005
|
|
|
$
|
(70,749
|
)
|
|
$
|
96,256
|
|
Purchased technologies
|
210,714
|
|
|
(98,336
|
)
|
|
112,378
|
|
|
208,096
|
|
|
(93,748
|
)
|
|
114,348
|
|
||||||
Customer and reseller relationships
|
105,665
|
|
|
(96,735
|
)
|
|
8,930
|
|
|
106,076
|
|
|
(95,558
|
)
|
|
10,518
|
|
||||||
Covenants not to compete
|
15,565
|
|
|
(14,300
|
)
|
|
1,265
|
|
|
15,861
|
|
|
(14,324
|
)
|
|
1,537
|
|
||||||
Other intangible assets
|
8,833
|
|
|
(6,883
|
)
|
|
1,950
|
|
|
8,833
|
|
|
(6,539
|
)
|
|
2,294
|
|
||||||
Total identifiable intangible assets
|
$
|
510,162
|
|
|
$
|
(289,986
|
)
|
|
$
|
220,176
|
|
|
$
|
505,871
|
|
|
$
|
(280,918
|
)
|
|
$
|
224,953
|
|
|
|
Three Months Ended
|
||||||
|
|
May 31, 2018
|
|
May 31, 2017
|
||||
Cost of revenue
|
|
$
|
6,485
|
|
|
$
|
4,180
|
|
Sales and marketing
|
|
1,362
|
|
|
1,459
|
|
||
Research and development
|
|
34
|
|
|
34
|
|
||
General and administrative
|
|
2,373
|
|
|
1,826
|
|
||
Total amortization expense
|
|
$
|
10,254
|
|
|
$
|
7,499
|
|
|
May 31, 2018
|
|
February 28, 2018 (1)
|
||||
Deferred commissions, current
|
$
|
181,901
|
|
|
$
|
188,944
|
|
Deferred commissions, non-current
|
39,295
|
|
|
48,653
|
|
||
Total deferred commissions
|
$
|
221,196
|
|
|
$
|
237,597
|
|
(1)
|
As adjusted to reflect the impact of the retrospective application of ASC 606. See NOTE 2—Summary of Significant Accounting Policies for detailed information on adoption of ASC 606.
|
|
May 31, 2018
|
|
Classification of
Gain (Loss) Recognized in Income on Derivatives |
|
Three Months Ended May 31, 2018
|
||||||||||
|
Balance Sheet
Classification |
|
Fair
Value |
|
Notional
Value |
|
|
||||||||
Assets—foreign currency forward contracts not designated as hedges
|
Other current assets
|
|
$
|
111
|
|
|
$
|
21,554
|
|
|
Other expense, net
|
|
$
|
289
|
|
Liabilities—foreign currency forward contracts not designated as hedges
|
Accounts payable and accrued expenses
|
|
(790
|
)
|
|
28,112
|
|
|
Other expense, net
|
|
(1,136
|
)
|
|||
Total
|
|
|
$
|
(679
|
)
|
|
$
|
49,666
|
|
|
|
|
$
|
(847
|
)
|
|
May 31, 2017
|
|
Classification of
Gain (Loss) Recognized in Income on Derivatives |
|
Three Months Ended May 31, 2017
|
||||||||||
|
Balance Sheet
Classification |
|
Fair
Value |
|
Notional
Value |
|
|
||||||||
Assets—foreign currency forward contracts not designated as hedges
|
Other current assets
|
|
$
|
278
|
|
|
$
|
18,901
|
|
|
Other expense, net
|
|
$
|
605
|
|
Liabilities—foreign currency forward contracts not designated as hedges
|
Accounts payable and accrued expenses
|
|
(137
|
)
|
|
27,053
|
|
|
Other expense, net
|
|
(320
|
)
|
|||
Total
|
|
|
$
|
141
|
|
|
$
|
45,954
|
|
|
|
|
$
|
285
|
|
(1)
|
As adjusted to reflect the impact of the retrospective application of ASC 606. See NOTE 2—Summary of Significant Accounting Policies for detailed information on adoption of ASC 606.
|
|
Three Months Ended
|
||||||
|
May 31, 2018
|
|
May 31, 2017
|
||||
Coupon rate 0.25% per year, payable semiannually
|
$
|
471
|
|
|
$
|
503
|
|
Amortization of convertible note issuance costs — liability component
|
831
|
|
|
673
|
|
||
Accretion of debt discount
|
5,007
|
|
|
4,867
|
|
||
Total interest expense related to convertible notes
|
$
|
6,309
|
|
|
$
|
6,043
|
|
|
May 31, 2018
|
||||||
|
Fair Value
|
|
Carrying Value
|
||||
Convertible notes
|
$
|
753,518
|
|
|
$
|
749,047
|
|
|
Common
Stock |
|
Additional
Paid-In Capital |
|
Retained
Earnings (1) |
|
Treasury
Stock |
|
Accumulated
Other Comprehensive Loss |
|
Total
Stockholders’ Equity |
||||||||||||
Balance at February 28, 2018
|
$
|
24
|
|
|
$
|
2,416,080
|
|
|
$
|
1,619,688
|
|
|
$
|
(2,525,072
|
)
|
|
$
|
(32,596
|
)
|
|
$
|
1,478,124
|
|
Net income
|
—
|
|
|
—
|
|
|
113,190
|
|
|
—
|
|
|
—
|
|
|
113,190
|
|
||||||
Other comprehensive loss, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(10,905
|
)
|
|
(10,905
|
)
|
||||||
Vest and exercise of share-based awards
|
—
|
|
|
875
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
875
|
|
||||||
Common stock repurchase
|
—
|
|
|
(17,175
|
)
|
|
—
|
|
|
(132,844
|
)
|
|
—
|
|
|
(150,019
|
)
|
||||||
Share-based compensation expense
|
—
|
|
|
46,005
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
46,005
|
|
||||||
Minimum tax withholdings paid by the Company on behalf of employees related to net settlement of employee share-based awards
|
—
|
|
|
(77,094
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(77,094
|
)
|
||||||
Re-issuance of treasury stock under employee stock purchase plan
|
—
|
|
|
18,471
|
|
|
—
|
|
|
13,740
|
|
|
—
|
|
|
32,211
|
|
||||||
Convertible note conversions
|
—
|
|
|
(835
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(835
|
)
|
||||||
Exercises of convertible note hedges
|
—
|
|
|
13,598
|
|
|
—
|
|
|
(13,598
|
)
|
|
—
|
|
|
—
|
|
||||||
Cumulative-effect adjustment from adoption of ASU 2016-01
|
|
|
|
—
|
|
|
392
|
|
|
—
|
|
|
—
|
|
|
392
|
|
||||||
Balance at May 31, 2018
|
$
|
24
|
|
|
$
|
2,399,925
|
|
|
$
|
1,733,270
|
|
|
$
|
(2,657,774
|
)
|
|
$
|
(43,501
|
)
|
|
$
|
1,431,944
|
|
(1)
|
As adjusted to reflect the impact of the retrospective application of ASC 606. See NOTE 2—Summary of Significant Accounting Policies for detailed information on adoption of ASC 606.
|
|
Common
Stock |
|
Additional
Paid-In Capital |
|
Retained
Earnings (1) |
|
Treasury
Stock |
|
Accumulated
Other Comprehensive Loss |
|
Total
Stockholders’ Equity |
||||||||||||
Balance at February 28, 2017
|
$
|
24
|
|
|
$
|
2,294,462
|
|
|
$
|
1,357,837
|
|
|
$
|
(2,311,805
|
)
|
|
$
|
(88,352
|
)
|
|
$
|
1,252,166
|
|
Net income
|
—
|
|
|
—
|
|
|
75,314
|
|
|
—
|
|
|
—
|
|
|
75,314
|
|
||||||
Other comprehensive income, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
22,612
|
|
|
22,612
|
|
||||||
Vest and exercise of share-based awards
|
—
|
|
|
2,968
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,968
|
|
||||||
Common stock repurchase
|
—
|
|
|
—
|
|
|
—
|
|
|
(61,987
|
)
|
|
—
|
|
|
(61,987
|
)
|
||||||
Share-based compensation expense
|
—
|
|
|
43,718
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
43,718
|
|
||||||
Minimum tax withholdings paid by the Company on behalf of employees related to net settlement of employee share-based awards
|
—
|
|
|
(41,010
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(41,010
|
)
|
||||||
Re-issuance of treasury stock under employee stock purchase plan
|
—
|
|
|
—
|
|
|
—
|
|
|
23,748
|
|
|
—
|
|
|
23,748
|
|
||||||
Other adjustments
|
—
|
|
|
(5,015
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,015
|
)
|
||||||
Balance at May 31, 2017
|
$
|
24
|
|
|
$
|
2,295,123
|
|
|
$
|
1,433,151
|
|
|
$
|
(2,350,044
|
)
|
|
$
|
(65,740
|
)
|
|
$
|
1,312,514
|
|
(1)
|
As adjusted to reflect the impact of the retrospective application of ASC 606. See NOTE 2—Summary of Significant Accounting Policies for detailed information on adoption of ASC 606.
|
|
|
May 31, 2018
|
|
February 28, 2018
|
||||
Accumulated loss from foreign currency translation adjustment
|
|
$
|
(40,510
|
)
|
|
$
|
(29,679
|
)
|
Accumulated unrealized loss, net of tax, on available-for-sale securities
|
|
(2,991
|
)
|
|
(2,917
|
)
|
||
Accumulated other comprehensive loss
|
|
$
|
(43,501
|
)
|
|
$
|
(32,596
|
)
|
|
|
February 28, 2018
|
|
Revenue recognized from opening balance
|
|
Deferred revenue, net
(1)
|
|
May 31, 2018
|
||||||||
Deferred revenue, short-term
|
|
$
|
1,853,719
|
|
|
$
|
(611,353
|
)
|
|
$
|
478,934
|
|
|
$
|
1,721,300
|
|
Deferred revenue, long-term
|
|
741,453
|
|
|
—
|
|
|
(18,246
|
)
|
|
723,207
|
|
||||
Total deferred revenue
|
|
$
|
2,595,172
|
|
|
$
|
(611,353
|
)
|
|
$
|
460,688
|
|
|
$
|
2,444,507
|
|
(1)
|
Includes revenue recognized from current period customer contracts and the impact from foreign currency exchange rate fluctuations.
|
|
Three Months Ended
|
||||||
|
May 31, 2018
|
|
May 31, 2017 (1)
|
||||
Net income, basic and diluted
|
$
|
113,190
|
|
|
$
|
75,314
|
|
Weighted average common shares outstanding
|
177,302
|
|
|
177,243
|
|
||
Incremental shares attributable to assumed vesting or exercise of outstanding equity award shares
|
3,833
|
|
|
2,974
|
|
||
Dilutive effect of convertible notes
|
5,686
|
|
|
1,593
|
|
||
Dilutive effect of warrants
|
3,918
|
|
|
—
|
|
||
Diluted shares
|
190,739
|
|
|
181,810
|
|
||
Diluted net income per share
|
$
|
0.59
|
|
|
$
|
0.41
|
|
(1)
|
As adjusted to reflect the impact of the retrospective application of ASC 606. See NOTE 2—Summary of Significant Accounting Policies for detailed information on adoption of ASC 606
.
|
|
Three Months Ended
|
||||
|
May 31, 2018
|
|
May 31, 2017
|
||
Number of shares considered anti-dilutive for calculating diluted EPS
|
—
|
|
|
14
|
|
|
|
Three Months Ended
|
||||||
|
|
May 31, 2018
|
|
May 31, 2017
|
||||
Cost of revenue
|
|
$
|
5,128
|
|
|
$
|
3,948
|
|
Sales and marketing
|
|
19,520
|
|
|
20,612
|
|
||
Research and development
|
|
14,782
|
|
|
13,447
|
|
||
General and administrative
|
|
6,575
|
|
|
5,711
|
|
||
Total share-based compensation expense
(1)
|
|
$
|
46,005
|
|
|
$
|
43,718
|
|
(1)
|
Total share-based compensation expense included
$4.0 million
and
$2.9 million
, respectively, of expense related to the Company’s employee stock purchase plan (“ESPP”) for the three months ended
May 31, 2018
and
May 31, 2017
.
|
|
Three Months Ended
|
||||||||||||
|
May 31, 2018
|
|
May 31, 2017
|
||||||||||
|
Shares and
Shares
Underlying Awards
|
|
Weighted
Average Per Share Award Fair Value |
|
Shares and
Shares Underlying Awards |
|
Weighted
Average Per Share Award Fair Value |
||||||
Service-based shares and share units
|
669,450
|
|
|
$
|
160.53
|
|
|
838,395
|
|
|
$
|
86.17
|
|
Performance share units—target
|
173,014
|
|
(1)
|
$
|
163.56
|
|
|
261,760
|
|
|
$
|
87.99
|
|
Performance share awards
|
64,219
|
|
(2)
|
$
|
163.56
|
|
|
104,362
|
|
|
$
|
87.99
|
|
Total share-based awards
|
906,683
|
|
|
$
|
161.32
|
|
|
1,204,517
|
|
|
$
|
86.72
|
|
(1)
|
Certain executives and senior management were awarded a target number of performance share units (“PSUs”). PSU grantees may earn up to
200%
of the target number of PSUs.
Half of the target number of PSUs can be earned by the grantees depending upon the Company’s financial performance measured against the financial performance of specified peer companies during a three-year performance period beginning on March 1, 2018.
The remaining target number of PSUs can be earned by the grantees depending upon the Company’s total shareholder return performance measured against the total shareholder return performance of specified peer companies during a three-year period beginning on March 1, 2018.
|
(2)
|
Certain executives were granted restricted stock awards. These shares were awarded subject to the achievement of a specified dollar amount of revenue for the fiscal year ending
February 28, 2019
(the “RSA Performance Goal”). If the Company fails to achieve the RSA Performance Goal then all such shares are forfeited. If the Company achieves the RSA Performance Goal then
25%
of the restricted stock vests on or about July 16, 2019, and the remainder vests ratably on a quarterly basis over the course of the subsequent
three
-year period, provided that the grantee’s business relationship with the Company has not ceased.
|
|
May 31, 2018
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Money markets
(1)
|
$
|
349,062
|
|
|
$
|
349,062
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest-bearing deposits
(1)
|
87,494
|
|
|
—
|
|
|
87,494
|
|
|
—
|
|
||||
Available-for-sale securities
(1)
:
|
|
|
|
|
|
|
|
||||||||
Commercial paper
|
609,776
|
|
|
—
|
|
|
609,776
|
|
|
—
|
|
||||
U.S. agency securities
|
303,837
|
|
|
—
|
|
|
303,837
|
|
|
—
|
|
||||
Corporate securities
|
357,380
|
|
|
—
|
|
|
357,380
|
|
|
—
|
|
||||
Foreign currency derivatives
(2)
|
111
|
|
|
—
|
|
|
111
|
|
|
—
|
|
||||
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Foreign currency derivatives
(3)
|
(790
|
)
|
|
—
|
|
|
(790
|
)
|
|
—
|
|
||||
Total
|
$
|
1,706,870
|
|
|
$
|
349,062
|
|
|
$
|
1,357,808
|
|
|
$
|
—
|
|
(1)
|
Included in Cash, cash equivalents and restricted cash,
Investments in debt and equity securities, short-term
or Investments in debt securities, long-term in the Company’s Consolidated Balance Sheet at
May 31, 2018
, in addition to
$819.6 million
of cash.
|
(2)
|
Included in Other current assets in the Company’s Consolidated Balance Sheet at
May 31, 2018
.
|
(3)
|
Included in Accounts payable and accrued expenses in the Company’s Consolidated Balance Sheet at
May 31, 2018
.
|
|
February 28, 2018
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Money markets
(1)
|
$
|
334,665
|
|
|
$
|
334,665
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest-bearing deposits
(1)
|
61,125
|
|
|
—
|
|
|
61,125
|
|
|
—
|
|
||||
Available-for-sale securities
(1)
:
|
|
|
|
|
|
|
|
||||||||
Commercial paper
|
615,043
|
|
|
—
|
|
|
615,043
|
|
|
—
|
|
||||
U.S. agency securities
|
308,267
|
|
|
—
|
|
|
308,267
|
|
|
—
|
|
||||
Corporate securities
|
381,514
|
|
|
—
|
|
|
381,514
|
|
|
—
|
|
||||
Equity securities
|
1,166
|
|
|
1,166
|
|
|
—
|
|
|
—
|
|
||||
Foreign currency derivatives
(2)
|
298
|
|
|
—
|
|
|
298
|
|
|
—
|
|
||||
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Foreign currency derivatives
(3)
|
(312
|
)
|
|
—
|
|
|
(312
|
)
|
|
—
|
|
||||
Total
|
$
|
1,701,766
|
|
|
$
|
335,831
|
|
|
$
|
1,365,935
|
|
|
$
|
—
|
|
(1)
|
Included in Cash, cash equivalents and restricted cash,
Investments in debt and equity securities, short-term
or Investments in debt securities, long-term in the Company’s Consolidated Balance Sheet at
February 28, 2018
, in addition to
$771.2 million
of cash.
|
(2)
|
Included in Other current assets in the Company’s Consolidated Balance Sheet at
February 28, 2018
.
|
(3)
|
Included in Accounts payable and accrued expenses in the Company’s Consolidated Balance Sheet at
February 28, 2018
.
|
|
|
|
|
|
|
|
|
|
Balance Sheet Classification
|
||||||||||||||||||
|
Amortized
Cost |
|
Gross Unrealized
|
|
Aggregate
Fair Value |
|
Cash Equivalent Marketable Securities
|
|
Investments in debt and equity securities, short-term
|
|
Investments in debt securities, long-term
|
||||||||||||||||
|
|
Gains
|
|
Losses
(1)
|
|
|
|
|
|||||||||||||||||||
Money markets
|
$
|
349,062
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
349,062
|
|
|
$
|
349,062
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest-bearing deposits
|
87,494
|
|
|
—
|
|
|
—
|
|
|
87,494
|
|
|
—
|
|
|
87,494
|
|
|
—
|
|
|||||||
Commercial paper
|
609,776
|
|
|
—
|
|
|
—
|
|
|
609,776
|
|
|
599,838
|
|
|
9,938
|
|
|
—
|
|
|||||||
U.S. agency securities
|
307,704
|
|
|
6
|
|
|
(3,873
|
)
|
|
303,837
|
|
|
—
|
|
|
99,685
|
|
|
204,152
|
|
|||||||
Corporate securities
|
358,340
|
|
|
540
|
|
|
(1,500
|
)
|
|
357,380
|
|
|
—
|
|
|
132,755
|
|
|
224,625
|
|
|||||||
Total
|
$
|
1,712,376
|
|
|
$
|
546
|
|
|
$
|
(5,373
|
)
|
|
$
|
1,707,549
|
|
|
$
|
948,900
|
|
|
$
|
329,872
|
|
|
$
|
428,777
|
|
(1)
|
As of
May 31, 2018
, there were
$4.1 million
of accumulated unrealized losses related to investments that have been in a continuous unrealized loss position for 12 months or longer. The aggregate related fair value of investments with unrealized losses was
$528.4 million
.
|
|
As of May 31, 2018
|
|
Less than 1 Year
|
|
1-5 Years
|
|
More than 5 Years
|
||||||||
Maturity of available-for-sale debt securities
|
$
|
671,155
|
|
|
$
|
242,378
|
|
|
$
|
428,777
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
Balance Sheet Classification
|
||||||||||||||||||
|
Amortized
Cost |
|
Gross Unrealized
|
|
Aggregate
Fair Value |
|
Cash Equivalent Marketable Securities
|
|
Investments in debt and equity securities, short-term
|
|
Investments in debt securities, long-term
|
||||||||||||||||
|
|
Gains
|
|
Losses
(1)
|
|
|
|
|
|||||||||||||||||||
Money markets
|
$
|
334,665
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
334,665
|
|
|
$
|
334,665
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest-bearing deposits
|
61,125
|
|
|
—
|
|
|
—
|
|
|
61,125
|
|
|
—
|
|
|
61,125
|
|
|
—
|
|
|||||||
Commercial paper
|
615,043
|
|
|
—
|
|
|
—
|
|
|
615,043
|
|
|
615,043
|
|
|
—
|
|
|
—
|
|
|||||||
U.S. agency securities
|
312,537
|
|
|
—
|
|
|
(4,270
|
)
|
|
308,267
|
|
|
—
|
|
|
93,175
|
|
|
215,092
|
|
|||||||
Corporate securities
|
382,497
|
|
|
696
|
|
|
(1,679
|
)
|
|
381,514
|
|
|
3,272
|
|
|
162,892
|
|
|
215,350
|
|
|||||||
Equity securities
|
650
|
|
|
516
|
|
|
—
|
|
|
1,166
|
|
|
—
|
|
|
1,166
|
|
|
—
|
|
|||||||
Total
|
$
|
1,706,517
|
|
|
$
|
1,212
|
|
|
$
|
(5,949
|
)
|
|
$
|
1,701,780
|
|
|
$
|
952,980
|
|
|
$
|
318,358
|
|
|
$
|
430,442
|
|
(1)
|
As of
February 28, 2018
, there were
$4.4 million
of accumulated unrealized losses related to investments that have been in a continuous unrealized loss position for 12 months or longer. The aggregate related fair value of investments with unrealized losses was
$515.4 million
.
|
|
Americas
|
|
EMEA
|
|
Asia Pacific
|
|
Corporate
(1)
|
|
Consolidated
|
||||||||||
|
Three Months Ended May 31, 2018
|
||||||||||||||||||
Revenue from unaffiliated customers
|
$
|
500,306
|
|
|
$
|
195,148
|
|
|
$
|
118,076
|
|
|
$
|
—
|
|
|
$
|
813,530
|
|
Income (loss) from operations
|
$
|
71,864
|
|
|
$
|
48,860
|
|
|
$
|
37,437
|
|
|
$
|
(46,005
|
)
|
|
$
|
112,156
|
|
Total cash, cash equivalents, restricted cash and available-for-sale investment securities
|
$
|
1,524,311
|
|
|
$
|
576,171
|
|
|
$
|
426,647
|
|
|
$
|
—
|
|
|
$
|
2,527,129
|
|
Total assets
|
$
|
3,559,900
|
|
|
$
|
1,015,187
|
|
|
$
|
616,474
|
|
|
$
|
—
|
|
|
$
|
5,191,561
|
|
|
Three Months Ended May 31, 2017
|
||||||||||||||||||
Revenue from unaffiliated customers
|
$
|
438,380
|
|
|
$
|
143,671
|
|
|
$
|
94,745
|
|
|
$
|
—
|
|
|
$
|
676,796
|
|
Income (loss) from operations
(2)
|
$
|
74,591
|
|
|
$
|
30,923
|
|
|
$
|
27,948
|
|
|
$
|
(43,718
|
)
|
|
$
|
89,744
|
|
Total cash, cash equivalents, restricted cash and available-for-sale investment securities
|
$
|
1,186,481
|
|
|
$
|
779,346
|
|
|
$
|
343,754
|
|
|
$
|
—
|
|
|
$
|
2,309,581
|
|
Total assets
(2)
|
$
|
2,864,857
|
|
|
$
|
1,135,329
|
|
|
$
|
519,263
|
|
|
$
|
—
|
|
|
$
|
4,519,449
|
|
(1)
|
Amounts represent share-based compensation expense that was not allocated to geographic segments.
|
(2)
|
As adjusted from retrospective adoption of ASC 606. See NOTE 2—Summary of Significant Accounting Policies for detailed information on adoption of ASC 606.
|
|
Three Months Ended
|
||||||
|
May 31, 2018
|
|
May 31, 2017
|
||||
U.S., the Company’s country of domicile
|
$
|
442,421
|
|
|
$
|
394,542
|
|
Foreign
|
371,109
|
|
|
282,254
|
|
||
Total revenue from unaffiliated customers
|
$
|
813,530
|
|
|
$
|
676,796
|
|
|
May 31, 2018
|
|
February 28, 2018
|
||||
U.S., the Company’s country of domicile
|
$
|
132,328
|
|
|
$
|
137,112
|
|
Foreign
|
64,325
|
|
|
68,993
|
|
||
Total tangible long-lived assets
|
$
|
196,653
|
|
|
$
|
206,105
|
|
|
Three Months Ended
|
||||||
|
May 31, 2018
|
|
May 31, 2017
|
||||
Subscription revenue:
|
|
|
|
||||
Infrastructure-related offerings
|
$
|
522,402
|
|
|
$
|
457,961
|
|
Application Development-related and other emerging technology offerings
|
189,119
|
|
|
138,547
|
|
||
Total subscription revenue
|
711,521
|
|
|
596,508
|
|
||
Training and services revenue:
|
|
|
|
||||
Consulting services
|
79,147
|
|
|
61,488
|
|
||
Training
|
22,862
|
|
|
18,800
|
|
||
Total training and services revenue
|
102,009
|
|
|
80,288
|
|
||
Total revenue
|
$
|
813,530
|
|
|
$
|
676,796
|
|
|
Three Months Ended May 31, 2017
|
||
Revenue
|
$
|
679,373
|
|
Net income
|
$
|
66,852
|
|
Basic net income per common share
|
$
|
0.38
|
|
Diluted net income per common share
|
$
|
0.37
|
|
Balance at February 28, 2018
|
$
|
1,288,830
|
|
Impact of foreign currency fluctuations
|
(7,589
|
)
|
|
Other adjustments
|
(2,533
|
)
|
|
Balance at May 31, 2018
|
$
|
1,278,708
|
|
ITEM 2.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
|
Three Months Ended
|
||||||||
|
May 31, 2018
|
|
May 31, 2017
|
|
Year-Over-Year Growth Rate
|
||||
Infrastructure-related subscription revenue, as reported
|
$
|
522,402
|
|
|
$
|
457,961
|
|
|
14.1%
|
Adjustment for foreign currency exchange rates
|
(13,938
|
)
|
|
—
|
|
|
|
||
Infrastructure-related subscription revenue, excluding foreign currency impact
|
508,464
|
|
|
457,961
|
|
|
11.0%
|
||
|
|
|
|
|
|
||||
Application Development-related and other emerging technology subscription revenue, as reported
|
189,119
|
|
|
138,547
|
|
|
36.5%
|
||
Adjustment for foreign currency exchange rates
|
(6,130
|
)
|
|
—
|
|
|
|
||
Application Development-related and other emerging technology subscription revenue, excluding foreign currency impact
|
182,989
|
|
|
138,547
|
|
|
32.1%
|
||
|
|
|
|
|
|
||||
Total subscription revenue, as reported
|
711,521
|
|
|
596,508
|
|
|
19.3%
|
||
Adjustment for foreign currency exchange rates
|
(20,068
|
)
|
|
—
|
|
|
|
||
Total subscription revenue, excluding foreign currency impact
|
691,453
|
|
|
596,508
|
|
|
15.9%
|
||
|
|
|
|
|
|
||||
Total training and services revenue, as reported
|
102,009
|
|
|
80,288
|
|
|
27.1%
|
||
Adjustment for foreign currency exchange rates
|
(2,450
|
)
|
|
—
|
|
|
|
||
Total training and services revenue, excluding foreign currency impact
|
99,559
|
|
|
80,288
|
|
|
24.0%
|
||
|
|
|
|
|
|
||||
Total revenue, as reported
|
813,530
|
|
|
676,796
|
|
|
20.2%
|
||
Adjustment for foreign currency exchange rates
|
(22,518
|
)
|
|
—
|
|
|
|
||
Total revenue, excluding foreign currency impact
|
$
|
791,012
|
|
|
$
|
676,796
|
|
|
16.9%
|
|
May 31, 2018
|
|
February 28, 2018
|
|
Year-to-Date Growth Rate
|
||||
Current deferred revenue, as reported
|
$
|
1,721,300
|
|
|
$
|
1,853,719
|
|
|
(7.1)%
|
Adjustment for foreign currency exchange rates
|
28,639
|
|
|
—
|
|
|
|
||
Current deferred revenue, excluding foreign currency impact
|
$
|
1,749,939
|
|
|
$
|
1,853,719
|
|
|
(5.6)%
|
|
|
|
|
|
|
||||
Long-term deferred revenue, as reported
|
$
|
723,207
|
|
|
$
|
741,453
|
|
|
(2.5)%
|
Adjustment for foreign currency exchange rates
|
17,434
|
|
|
—
|
|
|
|
||
Long-term deferred revenue, excluding foreign currency impact
|
$
|
740,641
|
|
|
$
|
741,453
|
|
|
(0.1)%
|
|
|
|
|
|
|
||||
Total deferred revenue, as reported
|
$
|
2,444,507
|
|
|
$
|
2,595,172
|
|
|
(5.8)%
|
Adjustment for foreign currency exchange rates
|
46,073
|
|
|
—
|
|
|
|
||
Total deferred revenue, excluding foreign currency impact
|
$
|
2,490,580
|
|
|
$
|
2,595,172
|
|
|
(4.0)%
|
|
May 31, 2018
|
|
May 31, 2017
|
|
Year-Over-Year Growth Rate
|
||||
Current deferred revenue, as reported
|
$
|
1,721,300
|
|
|
$
|
1,486,409
|
|
|
15.8%
|
Adjustment for foreign currency exchange rates
|
(13,619
|
)
|
|
—
|
|
|
|
||
Current deferred revenue, excluding foreign currency impact
|
$
|
1,707,681
|
|
|
$
|
1,486,409
|
|
|
14.9%
|
|
|
|
|
|
|
||||
Long-term deferred revenue, as reported
|
$
|
723,207
|
|
|
$
|
567,755
|
|
|
27.4%
|
Adjustment for foreign currency exchange rates
|
(2,559
|
)
|
|
—
|
|
|
|
||
Long-term deferred revenue, excluding foreign currency impact
|
$
|
720,648
|
|
|
$
|
567,755
|
|
|
26.9%
|
|
|
|
|
|
|
||||
Total deferred revenue, as reported
|
$
|
2,444,507
|
|
|
$
|
2,054,164
|
|
|
19.0%
|
Adjustment for foreign currency exchange rates
|
(16,178
|
)
|
|
—
|
|
|
|
||
Total deferred revenue, excluding foreign currency impact
|
$
|
2,428,329
|
|
|
$
|
2,054,164
|
|
|
18.2%
|
|
Three Months Ended
|
||||||||
|
May 31, 2018
|
|
May 31, 2017
|
|
Year-Over-Year Growth Rate
|
||||
Revenue, as reported
|
$
|
813,530
|
|
|
$
|
676,796
|
|
|
20.2%
|
Change in deferred revenue, as reported on Statements of Cash Flows
|
(104,592
|
)
|
|
(45,717
|
)
|
|
|
||
Billings proxy
|
708,938
|
|
|
631,079
|
|
|
12.3%
|
||
Adjustment to revenue for foreign currency exchange rates
|
(22,518
|
)
|
|
|
|
|
|||
Billings proxy, excluding foreign currency impact
|
$
|
686,420
|
|
|
$
|
631,079
|
|
|
8.8%
|
|
Four-Fiscal-Quarter Period Ended
|
||||||||
|
May 31, 2018
|
|
May 31, 2017
|
|
Year-Over-Year Growth Rate
|
||||
Four-fiscal-quarter period rolling average billings proxy
|
$
|
857,626
|
|
|
$
|
717,403
|
|
|
19.5%
|
Adjustment to revenue for foreign currency exchange rates
|
(15,524
|
)
|
|
—
|
|
|
|
||
Four-fiscal-quarter period rolling average billings proxy, excluding foreign currency impact
|
$
|
842,102
|
|
|
$
|
717,403
|
|
|
17.4%
|
|
Americas
|
|
EMEA
|
|
Asia Pacific
|
|
Consolidated
|
||||||||||||||||
Three Months Ended
|
Revenue
|
|
YoY Growth %
|
|
Revenue
|
|
YoY Growth %
|
|
Revenue
|
|
YoY Growth %
|
|
Revenue
|
|
YoY Growth %
|
||||||||
May 31, 2018, as reported
|
$
|
500,306
|
|
|
14.1%
|
|
$
|
195,148
|
|
|
35.8%
|
|
$
|
118,076
|
|
|
24.6%
|
|
$
|
813,530
|
|
|
20.2%
|
Adjustment for foreign currency exchange rates
|
1,970
|
|
|
|
|
(21,041
|
)
|
|
|
|
(3,447
|
)
|
|
|
|
(22,518
|
)
|
|
|
||||
May 31, 2018, excluding foreign currency impact
|
$
|
502,276
|
|
|
14.6%
|
|
$
|
174,107
|
|
|
21.2%
|
|
$
|
114,629
|
|
|
21.0%
|
|
$
|
791,012
|
|
|
16.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
May 31, 2017, as reported
|
$
|
438,380
|
|
|
19.9%
|
|
$
|
143,671
|
|
|
15.6%
|
|
$
|
94,745
|
|
|
21.7%
|
|
$
|
676,796
|
|
|
19.2%
|
|
Americas
|
|
EMEA
|
|
Asia Pacific
|
|
Consolidated
(1)
|
Three Months Ended May 31, 2018
|
85.3%
|
|
87.9%
|
|
83.0%
|
|
84.9%
|
Three Months Ended May 31, 2017
|
85.6%
|
|
87.1%
|
|
83.9%
|
|
85.1%
|
(1)
|
Consolidated gross profit includes corporate (non-allocated) share-based compensation expense for the three months ended
May 31, 2018
and
May 31, 2017
of
$5.1 million
and
$3.9 million
, respectively. Share-based compensation expense was not allocated to geographic segments. For additional information, see
NOTE 14
—Share-based Awards to our Consolidated Financial Statements.
|
|
Americas
|
|
EMEA
|
|
Asia Pacific
|
|
Consolidated
(1)
|
Three Months Ended May 31, 2018
|
14.4%
|
|
25.0%
|
|
31.7%
|
|
13.8%
|
Three Months Ended May 31, 2017
(2)
|
17.0%
|
|
21.5%
|
|
29.5%
|
|
13.3%
|
(1)
|
Consolidated operating income includes corporate (non-allocated) share-based compensation expense for the three months ended
May 31, 2018
and
May 31, 2017
of
$46.0 million
and
$43.7 million
, respectively. Share-based compensation expense was not allocated to geographic segments. For additional information, see
NOTE 14
—Share-based Awards to our Consolidated Financial Statements.
|
(2)
|
As adjusted to reflect the impact of the retrospective application of ASC 606. See Note 2—Summary of Significant Accounting Policies to our Consolidated Financial Statements for detailed information on adoption of ASC606.
|
•
|
Revenue recognition;
|
•
|
Goodwill and other long-lived assets;
|
•
|
Share-based compensation;
|
•
|
Income taxes; and
|
•
|
Loss contingencies.
|
|
Three Months Ended
(Unaudited)
|
|
|
|
|
|||||||||
|
May 31,
2018 |
|
May 31,
2017 (1) |
|
$
Change
|
|
%
Change
|
|||||||
Revenue:
|
|
|
|
|
|
|
|
|||||||
Subscriptions
|
$
|
711,521
|
|
|
$
|
596,508
|
|
|
$
|
115,013
|
|
|
19.3
|
%
|
Training and services
|
102,009
|
|
|
80,288
|
|
|
21,721
|
|
|
27.1
|
|
|||
Total revenue
|
813,530
|
|
|
676,796
|
|
|
136,734
|
|
|
20.2
|
|
|||
Cost of revenue:
|
|
|
|
|
|
|
|
|||||||
Subscriptions
|
52,173
|
|
|
43,633
|
|
|
8,540
|
|
|
19.6
|
|
|||
As a % of subscription revenue
|
7.3
|
%
|
|
7.3
|
%
|
|
|
|
|
|||||
Training and services
|
70,526
|
|
|
57,063
|
|
|
13,463
|
|
|
23.6
|
|
|||
As a % of training and services revenue
|
69.1
|
%
|
|
71.1
|
%
|
|
|
|
|
|||||
Total cost of revenue
|
122,699
|
|
|
100,696
|
|
|
22,003
|
|
|
21.9
|
|
|||
As a % of total revenue
|
15.1
|
%
|
|
14.9
|
%
|
|
|
|
|
|||||
Gross profit
|
690,831
|
|
|
576,100
|
|
|
114,731
|
|
|
19.9
|
|
|||
Operating expense:
|
|
|
|
|
|
|
|
|||||||
Sales and marketing
|
348,815
|
|
|
294,323
|
|
|
54,492
|
|
|
18.5
|
|
|||
Research and development
|
166,506
|
|
|
137,163
|
|
|
29,343
|
|
|
21.4
|
|
|||
General and administrative
|
63,354
|
|
|
54,870
|
|
|
8,484
|
|
|
15.5
|
|
|||
Total operating expense
|
578,675
|
|
|
486,356
|
|
|
92,319
|
|
|
19.0
|
|
|||
Income from operations
|
112,156
|
|
|
89,744
|
|
|
22,412
|
|
|
25.0
|
|
|||
Interest income
|
7,834
|
|
|
3,993
|
|
|
3,841
|
|
|
96.2
|
|
|||
Interest expense
|
6,319
|
|
|
6,085
|
|
|
234
|
|
|
3.8
|
|
|||
Other expense, net
|
(2,194
|
)
|
|
(586
|
)
|
|
(1,608
|
)
|
|
N/A
|
|
|||
Income before provision for income taxes
|
111,477
|
|
|
87,066
|
|
|
24,411
|
|
|
28.0
|
|
|||
(Benefit) provision for income taxes
|
(1,713
|
)
|
|
11,752
|
|
|
(13,465
|
)
|
|
(114.6
|
)
|
|||
Net income
|
$
|
113,190
|
|
|
$
|
75,314
|
|
|
$
|
37,876
|
|
|
50.3
|
%
|
Gross profit margin—subscriptions
|
92.7
|
%
|
|
92.7
|
%
|
|
|
|
|
|||||
Gross profit margin—training and services
|
30.9
|
%
|
|
28.9
|
%
|
|
|
|
|
|||||
Gross profit margin
|
84.9
|
%
|
|
85.1
|
%
|
|
|
|
|
|||||
As a % of total revenue:
|
|
|
|
|
|
|
|
|||||||
Subscription revenue
|
87.5
|
%
|
|
88.1
|
%
|
|
|
|
|
|||||
Training and services revenue
|
12.5
|
%
|
|
11.9
|
%
|
|
|
|
|
|||||
Sales and marketing expense
|
42.9
|
%
|
|
43.5
|
%
|
|
|
|
|
|||||
Research and development expense
|
20.5
|
%
|
|
20.3
|
%
|
|
|
|
|
|||||
General and administrative expense
|
7.8
|
%
|
|
8.1
|
%
|
|
|
|
|
|||||
Total operating expenses
|
71.1
|
%
|
|
71.9
|
%
|
|
|
|
|
|||||
Income from operations
|
13.8
|
%
|
|
13.3
|
%
|
|
|
|
|
|||||
Income before provision for income taxes
|
13.7
|
%
|
|
12.9
|
%
|
|
|
|
|
|||||
Net income
|
13.9
|
%
|
|
11.1
|
%
|
|
|
|
|
|||||
Effective income tax rate
(2)
|
(1.5
|
)%
|
|
13.5
|
%
|
|
|
|
|
(1)
|
As adjusted to reflect the impact of the retrospective application of ASC 606. See Note 2—Summary of Significant Accounting Policies to our Consolidated Financial Statements for detailed information on adoption of ASC 606.
|
(2)
|
See
NOTE 7
—Income Taxes to our Consolidated Financial Statements for further discussion.
|
•
|
funding the continued development of our technology offerings;
|
•
|
improving and extending our services and the technologies used to market and deliver these services to our customers and support our business;
|
•
|
pursuing strategic acquisitions and alliances;
|
•
|
investing in or acquiring businesses, products and technologies; and
|
•
|
investing in enhancements to the systems we use to run our business and the expansion of our office facilities.
|
ITEM 3.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
ITEM 4.
|
CONTROLS AND PROCEDURES
|
ITEM 1.
|
LEGAL PROCEEDINGS
|
ITEM 1A.
|
RISK FACTORS
|
•
|
integrating the acquired business’ accounting, financial reporting, management, information and information security, human resource and other administrative systems to permit effective management and reporting, and the lack of control if such integration is delayed or not implemented;
|
•
|
incorporating and further developing acquired products or technology into our offerings and maintaining quality standards consistent with our brands;
|
•
|
effectively evaluating talent at an acquired business or identifying cultural challenges associated with integrating employees from the acquired business into our organization;
|
•
|
losing key employees of the acquired business;
|
•
|
achieving the expected benefits of the transaction, which may include generating greater market acceptance of our offerings and technologies, increasing our revenue or integrating the assets acquired into one or more of our current offerings;
|
•
|
increasing or adding operating expenses related to the acquired business or technology;
|
•
|
identifying acquisition targets that complement our strategic direction and technology road map;
|
•
|
gathering full information regarding a business or technology prior to a transaction, including the identification and assessment of liabilities, claims or other circumstances that could result in litigation or regulatory exposure, unfavorable accounting treatment, unexpected tax implications and other adverse effects on our business;
|
•
|
maintaining or establishing acceptable standards, controls, procedures and policies;
|
•
|
disrupting our ongoing business and distracting management;
|
•
|
impairing relationships with our employees, partners or customers as a result of any integration of new management and other personnel, products or technology or as a result of the changes in the competitive landscape affected by the transaction;
|
•
|
maintaining good relationships with customers or business partners of the acquired business;
|
•
|
incurring expenses related to the transaction;
|
•
|
assuming claims and liabilities from the acquired business or technology, or that are otherwise related to the transaction;
|
•
|
entering into new markets in which we have little or no experience or in which competitors may have stronger market positions;
|
•
|
impairing of intangible assets and goodwill acquired in transactions; and
|
•
|
for foreign transactions, managing additional risks related to the integration of operations across different cultures and languages, and the economic, political, compliance and regulatory risks associated with specific countries.
|
•
|
fluctuations in exchange rates;
|
•
|
pricing environments;
|
•
|
longer payment cycles and less financial stability of customers;
|
•
|
economic, political, compliance and regulatory risks associated with specific countries;
|
•
|
laws and policies of the U.S. and other jurisdictions affecting trade, foreign investment, loans, immigration and taxes, including any adverse effects that may result from the United Kingdom’s vote to exit the European Union;
|
•
|
difficulty selecting and monitoring channel partners;
|
•
|
differing technology standards and customer requirements;
|
•
|
lower levels of availability or use of the Internet, through which our software is often delivered;
|
•
|
difficulty protecting our intellectual property rights globally due to, among other reasons, the uncertainty of laws and enforcement in certain countries relating to the protection of intellectual property rights;
|
•
|
difficulty in staffing, developing and managing foreign operations as a result of distance and language, legal, cultural and other differences;
|
•
|
different employee/employer relationships and the existence of works councils and labor unions;
|
•
|
difficulty maintaining quality standards consistent with our brands;
|
•
|
export and import laws and regulations that could prevent us from delivering our offerings into and from certain countries;
|
•
|
public health risks and natural disasters, particularly in areas in which we have significant operations;
|
•
|
limitations on the repatriation and investment of funds and foreign currency exchange restrictions;
|
•
|
changes in import/export duties, quotas or other trade barriers that could affect the competitive pricing of our offerings and reduce our market share in some countries; and
|
•
|
economic or political instability or terrorist acts in some international markets that could adversely affect our business in those markets or result in the loss or forfeiture of some foreign assets and the loss of sums spent developing and marketing those assets and the revenue associated with them.
|
•
|
competitive products and pricing;
|
•
|
failure to release new or enhanced versions of Red Hat Enterprise Linux on a timely basis, or at all;
|
•
|
maturity of the market for Red Hat Enterprise Linux;
|
•
|
technological change that we are unable to address with Red Hat Enterprise Linux; or
|
•
|
future economic conditions.
|
•
|
our Board of Directors has the right to elect directors to fill a vacancy created by the expansion of the Board of Directors or the resignation, death or removal of a director, which prevents stockholders from being able to fill vacancies on our Board of Directors;
|
•
|
stockholders must provide advance notice to nominate individuals for election to the Board of Directors or to propose matters that can be acted upon at a stockholders’ meeting; such provisions may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of our company; and
|
•
|
our Board of Directors may issue, without stockholder approval, shares of undesignated preferred stock; the ability to issue undesignated preferred stock makes it possible for our Board of Directors to issue preferred stock with voting or other rights or preferences that could impede the success of any attempt to acquire us.
|
ITEM 2.
|
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
|
Period
|
Total Number
of Shares
Purchased
(1)(2)
|
|
Weighted
Average
Price Paid
per Share
|
|
Total Number of
Shares Purchased
as Part of Publicly
Announced Plans
or Programs
(3)
|
|
Approximate Dollar
Value of Shares that
May Yet Be Purchased Under the Plans or
Programs
(3)
|
||||||
March 1, 2018—March 31, 2018
|
8,816
|
|
|
$
|
148.58
|
|
|
8,806
|
|
|
$
|
397.4
|
million
|
April 1, 2018—April 30, 2018
|
1,240,348
|
|
|
$
|
158.72
|
|
|
763,792
|
|
|
$
|
277.7
|
million
|
May 1, 2018—May 31, 2018
|
361,220
|
|
|
$
|
117.74
|
|
|
176,040
|
|
|
$
|
248.7
|
million
|
Total
|
1,610,384
|
|
|
|
|
948,638
|
|
|
|
(1)
|
During the three months ended
May 31, 2018
, the Company withheld an aggregate of
476,507
shares of its common stock (with a weighted average share price of
$161.78
) from employees to satisfy minimum tax withholding obligations relating to the vesting of restricted share awards. These shares were not withheld pursuant to the programs described in Note (3) below.
|
(2)
|
In connection with the convertible note conversions settled during the three months ended
May 31, 2018
, the Company exercised a portion of the options that are part of the convertible note hedge transactions and acquired
185,239
shares of its common stock. The counterparties to the convertible note hedge transactions may be deemed to be an “affiliate purchaser” and may have purchased the shares of the Company’s common stock deliverable to the Company upon the exercise of the options.
|
(3)
|
On June 21, 2018, the Company announced that its Board authorized a new $1.0 billion repurchase program effective July 1, 2018 and the prior $1.0 billion repurchase program in effect since July 1, 2016 expired on June 30, 2018. See
NOTE 18
—Subsequent Events for additional information regarding the Company’s new share repurchase program.
|
ITEM 6.
|
EXHIBITS
|
|
|
|
|
Incorporated by Reference
|
|||
Exhibit No.
|
|
Exhibit Description
|
Provided Herewith
|
Form
|
File No.
|
Exhibit
|
Filing Date
|
|
|
|
|
|
|
|
|
10.1*
|
|
|
8-K
|
001-33162
|
99.1
|
May 10, 2018
|
|
|
|
|
|
|
|
|
|
10.2*
|
|
|
8-K
|
001-33162
|
99.2
|
May 10, 2018
|
|
|
|
|
|
|
|
|
|
10.3*
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.4*
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.5*
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31.1
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31.2
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
32.1
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101.INS
|
|
XBRL Instance Document
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase
|
X
|
|
|
|
|
*
|
Indicates a management contract or compensatory plan, contract or arrangement.
|
|
|
|
|
|
|
|
|
|
|
R
ED
H
AT
, I
NC
.
|
|
|
|
|
|
|
Date:
|
July 9, 2018
|
|
By:
|
/S/ JAMES M. WHITEHURST
|
|
|
|
|
James M. Whitehurst
President, Chief Executive Officer
(Duly Authorized Officer on Behalf of the Registrant)
|
|
|
|
|
|
|
|
|
R
ED
H
AT
, I
NC
.
|
|
|
|
|
|
|
Date:
|
July 9, 2018
|
|
By:
|
/S/ ERIC R. SHANDER
|
|
|
|
|
Eric R. Shander
Executive Vice President and
Chief Financial Officer
(Principal Financial Officer and Principal Accounting Officer)
|
|
|
RED HAT, INC.
|
|
|
100 East Davie Street
|
|
|
Raleigh, North Carolina 27601
|
|
|
|
|
|
By:
|
(
electronically accepted
)
|
|
Name:
|
<PARTICIPANT NAME>
|
|
Title:
|
1.
|
Grant of Performance Share Units
.
|
2.
|
Range of Earned Performance Share Units
.
|
3.
|
Determination of Earned Performance Share Units
.
|
65%
|
50%
|
70%
|
25%
|
More than 70%
|
0%
|
4.
|
Cessation of Business Relationship
.
|
5.
|
Payment
.
|
7.
|
Restrictions on Transfer
.
|
End of Year
|
|
Vested Percentage
|
|
|
|
1
|
|
25%
|
2
|
|
50%
|
3
|
|
100%
|
A.
|
the Performance Share Units, Shares deliverable pursuant to the Performance Share Units and Restricted Stock, as provided in this
Appendix A
, are adjusted (x) if the shares of Common Stock of the Company are exchanged solely for the common stock of the Parent Corporation or, if there is no Parent Corporation, the Surviving Corporation (as such terms are defined in the definition of “Change in Control” found in the Plan) in a manner which is not materially less favorable than the adjustments made in such transaction to the other outstanding shares of Common Stock of the Company, or (y) otherwise, based on the ratio on the day immediately prior to the date of the Change in Control of the Fair Market Value of one share of common stock of the Parent Corporation or, if there is no Parent Corporation, the Surviving Corporation, to the Fair Market Value of one share of Common Stock of the Company;
|
B.
|
if applicable, the Performance Share Units are converted into an award pursuant to which the common stock of the Parent Corporation or, if there is no Parent Corporation, the Surviving Corporation (as such terms are defined in the definition of “Change in Control” found in the Plan) are deliverable; and
|
C.
|
there are no other changes to the terms and conditions of this grant that materially and adversely affect this grant.
|
A.
|
the conviction of Participant of, or plea of guilty or nolo contendere by the Participant to, a felony;
|
B.
|
the willful misconduct by Participant resulting in material harm to the Company;
|
C.
|
fraud, embezzlement, theft or dishonesty by Participant against the Company or any Affiliate or repeated and continued failure to perform Participant’s duties with the Company after written notice
|
D.
|
the Participant’s material breach of any term of confidentiality and/or non-competition agreements.
|
A.
|
a reduction by the Company or its successor of more than 10% in the Participant’s rate of annual base salary as in effect immediately prior to such Change in Control;
|
B.
|
a reduction by the Company or its successor of more than 10% of the Participant’s individual annual target bonus opportunity;
|
C.
|
a significant and substantial reduction of the Participant’s responsibilities and authority, as compared with the Participant’s responsibilities and authority in effect immediately preceding the Change in Control; or a material adverse change in the Participant’s reporting relationship as compared with the Participant’s reporting relationship in effect immediately in effect prior to the Change in Control; or
|
D.
|
any requirement of the Company that the Participant be based anywhere more than fifty (50) miles from the Participant’s primary office location at the time of the Change in Control and in a new office location that is a greater distance from the Participant’s principal residence at the time of the Change in Control than the distance from the Participant’s principal residence to the Participant’s primary office location at the time of the Change in Control.
|
|
|
RED HAT, INC.
|
|
|
100 East Davie Street
|
|
|
Raleigh, North Carolina 27601
|
|
|
|
|
|
By:
|
(
electronically accepted
)
|
|
Name:
|
<PARTICIPANT NAME>
|
|
Title:
|
1.
|
Grant of Performance Share Units
.
|
2.
|
Range of Earned Performance Share Units
.
|
3.
|
Determination of Earned Performance Share Units
.
|
Percentile Rank
|
Payout Percentage
|
25% or less
|
200%
|
30%
|
175%
|
35%
|
150%
|
40%
|
125%
|
45%
|
110%
|
50%
|
100%
|
55%
|
90%
|
60%
|
75%
|
65%
|
50%
|
70%
|
25%
|
More than 70%
|
0%
|
4.
|
Cessation of Business Relationship
.
|
5.
|
Payment
.
|
7.
|
Restrictions on Transfer
.
|
15.
|
Miscellaneous
.
|
End of Year
|
|
Vested Percentage
|
|
|
|
1
|
|
25%
|
2
|
|
50%
|
3
|
|
100%
|
A.
|
the Performance Share Units, Shares deliverable pursuant to the Performance Share Units and Restricted Stock, as provided in this
Appendix A
, are adjusted (x) if the shares of Common Stock of the Company are exchanged solely for the common stock of the Parent Corporation or, if there is no Parent Corporation, the Surviving Corporation (as such terms are defined in the definition of “Change in Control” found in the Plan) in a manner which is not materially less favorable than the adjustments made in such transaction to the other outstanding shares of Common Stock of the Company, or (y) otherwise, based on the ratio on the day immediately prior to the date of the Change in Control of the Fair Market Value of one share of common stock of the Parent Corporation or, if there is no Parent Corporation, the Surviving Corporation, to the Fair Market Value of one share of Common Stock of the Company;
|
B.
|
if applicable, the Performance Share Units are converted into an award pursuant to which the common stock of the Parent Corporation or, if there is no Parent Corporation, the Surviving Corporation (as such terms are defined in the definition of “Change in Control” found in the Plan) are deliverable; and
|
C.
|
there are no other changes to the terms and conditions of this grant that materially and adversely affect this grant.
|
A.
|
the conviction of Participant of, or plea of guilty or nolo contendere by the Participant to, a felony;
|
B.
|
the willful misconduct by Participant resulting in material harm to the Company;
|
C.
|
fraud, embezzlement, theft or dishonesty by Participant against the Company or any Affiliate or repeated and continued failure to perform Participant’s duties with the Company after written notice of such failure to perform resulting in any case in material harm to the Company; or
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D.
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the Participant’s material breach of any term of confidentiality and/or non-competition agreements.
|
A.
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a reduction by the Company or its successor of more than 10% in the Participant’s rate of annual base salary as in effect immediately prior to such Change in Control;
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B.
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a reduction by the Company or its successor of more than 10% of the Participant’s individual annual target bonus opportunity;
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C.
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a significant and substantial reduction of the Participant’s responsibilities and authority, as compared with the Participant’s responsibilities and authority in effect immediately preceding the Change in Control; or a material adverse change in the Participant’s reporting relationship as compared with the Participant’s reporting relationship in effect immediately in effect prior to the Change in Control; or
|
D.
|
any requirement of the Company that the Participant be based anywhere more than fifty (50) miles from the Participant’s primary office location at the time of the Change in Control and in a new office location that is a greater distance from the Participant’s principal residence at the time of the Change in Control than the distance from the Participant’s principal residence to the Participant’s primary office location at the time of the Change in Control.
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Participant Name:
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<PARTICIPANT NAME>
|
|
|
Grant Date:
|
<Grant Date>
|
|
|
Vesting Start Date:
|
<Vesting Start Date >
|
|
|
Number of Shares of Restricted Stock:
|
<Number of shares>
|
|
|
|
Vesting Date
|
|
Number of Vested Shares
|
On the first anniversary of the Vesting Start Date (the “Anniversary Date”)
|
|
25% of the Restricted Stock
|
On the last day of each subsequent three-month period following the Anniversary Date
|
|
6.25% of the Restricted Stock
|
|
|
|
|
|
|
|
|
|
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By:
|
|
/S/ JAMES M. WHITEHURST
|
|
|
|
|
|
|
James M. Whitehurst
President and Chief Executive Officer
(Principal Executive Officer)
|
|
|
|
|
By:
|
|
/
S
/ ERIC R. SHANDER
|
|
|
|
|
|
|
Eric R. Shander
Executive Vice President and Chief Financial Officer
(Principal Financial Officer)
|
|
|
|
|
By:
|
|
/S/ JAMES M. WHITEHURST
|
|
|
|
|
|
|
James M. Whitehurst
President and Chief Executive Officer
(Principal Executive Officer)
|
|
|
|
|
By:
|
|
/
S
/ ERIC R. SHANDER
|
|
|
|
|
|
|
Eric R. Shander
Executive Vice President and Chief Financial Officer
(Principal Financial Officer)
|