In October 2015, reflecting a realignment of resources toward higher growth opportunities and our commitment to operating margin improvement, we announced a plan to repurpose or eliminate approximately 8% of worldwide positions and to consolidate select facilities, which would incur a then expected restructuring charge of $40 million to $50 million. As announced in October 2016, we increased the scope of our realignment, which raised our estimate to approximately $75 million to $80 million (and to approximately 13% of our September 30, 2015 worldwide headcount). As of December 31, 2016, we were materially complete with those actions and had incurred total restructuring charges of approximately $83 million, above the high end of our estimate due to some incremental efficiencies which were identified during the quarter. Of that amount, $37 million was recorded in Q1’16, $5 million in Q2’16, $3 million in Q3’16, $32 million in Q4’16 and $6 million in Q1’17. Substantially all of the charges are attributable to termination benefits.
FY’17 Business Outlook
For the
second quarter ending April 1, 2017 and for fiscal year 2017, the
company expects:
| In millions except per share amounts | ||||||||||||||||
| Operating Measures(1) |
Q2’17
|
Q2’17
|
FY’17
|
FY’17
|
||||||||||||
| Subscription ACV | $ 24 | $ 27 | $ 130 | $ 136 | ||||||||||||
| License and Subscription Bookings | $ 80 | $ 90 | $ 400 | $ 420 | ||||||||||||
| Subscription % of Bookings | 60% | 60% | 65% | 65% | ||||||||||||
| (1) An explanation of the metrics included in this table is provided below. | ||||||||||||||||
| Financial Measures |
Q2’17
|
Q2’17
|
FY’17
|
FY’17
|
||||||||||||
| Subscription Revenue | $ 64 | $ 64 | $ 262 | $ 267 | ||||||||||||
| Support Revenue | 140 | 140 | 578 | 578 | ||||||||||||
| Perpetual License Revenue | 31 | 36 | 140 | 150 | ||||||||||||
| Total Software Revenue (2) | 235 | 240 | 980 | 995 | ||||||||||||
| Professional Services Revenue | 45 | 45 | 185 | 185 | ||||||||||||
| Total Revenue (2) | $ 280 | $ 285 | $ 1,165 | $ 1,180 | ||||||||||||
| Operating Expense (GAAP) | $ 184 | $ 188 | $ 768 | $ 778 | ||||||||||||
| Operating Expense (Non-GAAP) | 161 | 166 | 670 | 680 | ||||||||||||
| Operating Margin (GAAP) | 4% | 5% | 5% | 6% | ||||||||||||
| Operating Margin (Non-GAAP) | 16% | 17% | 17% | 18% | ||||||||||||
| Tax Rate (GAAP) | 35% | 35% | 60% | 60% | ||||||||||||
| Tax Rate (Non-GAAP) | 10% | 8% | 10% | 8% | ||||||||||||
| Shares Outstanding | 117 | 117 | 117 | 117 | ||||||||||||
| EPS (GAAP) | $ 0.01 | $ 0.04 | $ 0.06 | $ 0.09 | ||||||||||||
| EPS (Non-GAAP) (2) | $ 0.26 | $ 0.31 | $ 1.20 | $ 1.30 | ||||||||||||
| Free Cash Flow | $ 127 | $ 137 | ||||||||||||||
| Adjusted Free Cash Flow (3) | $ 170 | $ 180 | ||||||||||||||
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