| (1) | During fiscal 2004, the Company sold its consolidated subsidiaries, the Vésper Operating Companies and the Vésper Towers, and returned personal mobile service licenses to Anatel, the telecommunications regulatory agency in Brazil. The results of operations, including gains and losses realized on the sales transactions and the licenses, are presented as discontinued operations. As such, revenues and gross margin results presented do not include the results from these discontinued operations. |
| (2) | Prior to the fourth quarter of fiscal 2004, the Company recorded royalty revenues from certain licensees based on estimates of royalties during the period they were earned. Starting in the fourth quarter of fiscal 2004, the Company began recognizing royalty revenues solely based on royalties reported by licensees during the quarter. The change in the timing of recognizing royalty revenue was made prospectively, and consequently, GAAP results for fiscal 2004 reflect only partial economic performance of the Company’s licensing business as royalty revenue that would have been recognized in the fourth quarter of fiscal 2004 was recognized in the first quarter of fiscal 2005. |
| (3) | The Company effected a two-for-one stock split in August 2004. All references to per share amounts have been restated to reflect the stock split. |
| (4) | See “Note regarding use of non-GAAP financial measures” and “Reconciliation of non-GAAP financial measures.” |
| (5) | Free Cash Flow is calculated as net cash provided by operating activities less capital expenditures, both of which are presented in the GAAP statement of cash flows. |
| (6) | Free Cash Flow for fiscal 2004 has been revised to combine cash flows from continuing operations with cash flows from discontinued operations, which resulted from the sale of the Company’s former subsidiaries, the Vésper Operating Companies and the Vésper Towers, and the return of personal mobile service licenses to Anatel, the telecommunications regulatory agency in Brazil. |
