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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 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): February 13, 2008
______________

Network Appliance, Inc.
(Exact name of Registrant as specified in its charter)

Delaware

0-27130

77-0307520

(State or other jurisdiction of

incorporation or organization)

(Commission

File Number)

(I.R.S. Employer

Identification Number)

495 East Java Drive
Sunnyvale, CA  94089

(Address of principal executive offices) (Zip Code)

(408) 822-6000
(Registrant’s telephone number, including area code)

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:

⃞ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

⃞ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

⃞ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

⃞ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02.     Results of Operations and Financial Condition

On February 13, 2008, Network Appliance, Inc. issued a press release announcing its earnings for the third quarter of fiscal year 2008. The press release is attached as an exhibit to this Form 8-K, and the information set forth therein is hereby incorporated by reference into this Item 2.02.

Item 9.01.     Financial Statements and Exhibits

(d) Exhibits.

Network Appliance, Inc.’s February 13, 2008 press release is hereby furnished as Exhibit 99.1 to this Form 8-K in connection with the disclosures under Item 2.02 of this Form 8-K.



SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

 

 

February 13, 2008

 

By:

/s/ Steven Gomo

 

Steven J. Gomo

Chief Financial Officer

Index to Exhibits

Exhibit

Description

99.1

Press release of Network Appliance, Inc. issued on February 13, 2008.

Exhibit 99.1

NetApp Announces Results for Third Quarter Fiscal Year 2008

Achieves Record Revenue, Income from Operations, and Cash Flow from Operating Activities

SUNNYVALE, Calif.--(BUSINESS WIRE)--NetApp (NASDAQ:NTAP), the leader in advanced networked storage solutions, today reported results for the third quarter of fiscal year 2008. Revenues for the third fiscal quarter were $884.0 million, an increase of 21% compared to revenues of $729.3 million for the same period a year ago and an increase of 12% compared to $792.2 million in the prior quarter.

For the third fiscal quarter, GAAP net income was $101.8 million, or $0.29 per share1 compared to GAAP net income of $66.5 million, or $0.17 per share for the same period in the prior year. Non-GAAP2 net income for the third fiscal quarter was $131.7 million, or $0.37 per share, compared to non-GAAP net income of $111.1 million, or $0.29 per share for the same period a year ago.

Revenues for the first nine months of the current fiscal year totaled $2.4 billion, compared to revenues of $2.0 billion for the first nine months of the prior fiscal year, an increase of 18% year over year.

GAAP net income for the first nine months of the current fiscal year totaled $219.9 million, or $0.60 per share, compared to GAAP net income of $208.1 million, or $0.53 per share for the first nine months of the prior fiscal year. Non-GAAP net income for the first nine months of the current fiscal year totaled $324.1 million, or $0.89 per share, compared to non-GAAP net income of $316.5 million, or $0.81 per share for the first nine months of the prior fiscal year.

“By providing customers with the best value in the industry, NetApp again achieved record financial results this quarter,” said Dan Warmenhoven, chief executive officer. “Through our efforts to increase our field coverage, expand our product portfolio and diversify our revenue streams, NetApp continues to grow significantly faster than the markets we serve.”

Outlook

Quarterly Highlights

During the third quarter of fiscal year 2008, NetApp broadened its footprint in the high-end data center market with the introduction of the new NetApp FAS6000 and V6000 series systems. The new solutions help maximize application-level availability and high storage utilization to reduce power, space, and cooling costs. These features, coupled with the NetApp® unified storage architecture, offer incredible business value for enterprise customers.

NetApp also set a new standard for performance this quarter, proving its systems provide greater value for customer’s data centers, by releasing the independently audited Storage Performance Benchmark-1st (SPC-1)™ performance results. SPC-1 is a widely recognized industry standard benchmark for storage system performance. The SPC-1 results provided a head-to-head comparison of the NetApp FAS3040 modular storage system and the EMC CLARiiON CX3 Model 40 storage systems and tested both products on their overall SAN performance with and without snapshots enabled. In both cases, the NetApp FAS3040 outshined the EMC CLARiiON CX3-40, and further validated NetApp as the high-performance leader for real-world data center deployments featuring value-added data management and data protection functionality.

During the quarter, NetApp won several awards for its product innovations. In the United States, the NetApp FAS2020 was named “Best Unified Storage Solution of the Year,” marking the third time in the last four years that NetApp has been honored by InfoWorld with a Technology of the Year award. NetApp also won seven recent awards in China for its FAS, NAS, and disaster recovery solutions. The NetApp FAS2000 was named Product of the Year by Dostor.com and Editor’s Choice for 2007 by both China Information World and China Partner World. The NetApp FAS6080 was named Product of the Year by China Computerworld and Editor’s Choice by Smart Partner. China Computerworld also awarded NetApp with Solution of the Year for its disaster recovery offerings.

From a market perspective, NetApp gained share in both the storage software and hardware markets, as reported in IDC’s Worldwide Quarterly Storage Software Tracker Q3 20073 and Worldwide Quarterly Disk Storage Systems Tracker Q3 2007.4 In the overall storage software market, NetApp grew the fastest among the top five leading storage software providers both sequentially (Q2’07 through Q3’07) and year over year (Q3’06 through Q3’07). This marks the ninth consecutive quarter that NetApp has outpaced the storage software market.

NetApp also grew faster than the networked storage market (which includes SAN, NAS, and iSCSI) both sequentially and year over year, in both capacity shipped and revenue. NetApp grew FC SAN revenue at more than four times the rate of the overall FC SAN market and grew FC SAN capacity at twice the rate of the overall market. This marks the 15th consecutive quarter that NetApp FC SAN revenue and capacity grew faster than the market. Demonstrating this market traction, NetApp in the third quarter reached a significant company milestone by achieving 15,000 production deployments of NetApp SAN solutions.

IDC also found that NetApp continued its leadership in the NAS and iSCSI storage markets in the third quarter. NetApp maintained the number-one market share positions in capacity shipped for NAS (38.7%) and in iSCSI for both capacity shipped (28.3%) and revenue (20.5%).

Also this quarter, NetApp continued its midrange leadership with the news that it has been positioned by Gartner, Inc., in the “Leaders” quadrant for midrange enterprise disk arrays in its research note, “Magic Quadrant for Midrange Enterprise Disk Array, 2H07.”5

NetApp also was named by FORTUNE magazine as one of the “100 Best Companies to Work For” for the sixth consecutive year. This year, NetApp ranked number 14 on the list as a result of its ability to deliver world-class solutions, while providing employees with a workplace environment that encourages creativity, innovation, team building, and leadership.

And finally, NetApp was honored this quarter by the California Integrated Waste Management Board’s Waste Reduction Awards Program (WRAP) for its outstanding actions to reduce waste locally and minimize its global impact on the environment.

Webcast and Conference Call Information

About NetApp

NetApp is a leading provider of innovative data management solutions that simplify the complexity of storing, managing, protecting, and retaining enterprise data. Market leaders around the world choose NetApp to help them reduce cost, minimize risk, and adapt to change. For solutions that deliver unmatched simplicity and value, visit us on the web at www.netapp.com.

“Safe Harbor” Statement Under U.S. Private Securities Litigation Reform Act of 1995

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements include all of the statements under the Outlook section relating to our forecasted operating results and metrics for the fourth quarter of fiscal year 2008; statements regarding our growth opportunities; and statements regarding the anticipated benefits of our products, technologies, and services relative to the offerings of our competitors. These forward-looking statements involve risks and uncertainties, and actual results could vary. Important factors that could cause actual results to differ materially from those in the forward-looking statements include our ability to build non-deferred backlog to levels consistent with our past results and to increase our revenue over the next several quarters; general economic and industry conditions, including expenditure trends for storage-related products; risks associated with the anticipated growth in network storage and content delivery markets; our ability to deliver new product architectures and enterprise service offerings; competition risks, including our ability to design products and services that compete effectively from a price and performance perspective; risks with new product introductions; our reliance on a limited number of suppliers; our ability to accurately forecast demand for our products and successfully manage our relationships with our contract manufacturers; our ability to expand our direct sales operations and reseller distribution channels; our ability to develop, maintain, and strengthen our relationships and product offerings with strategic partners; risks associated with international operations; our ability to successfully acquire and integrate complementary businesses and technologies; foreign currency exchange rate fluctuations; and other important factors as described in NetApp reports and documents filed from time to time with the Securities and Exchange Commission, including the factors described under the sections captioned “Risk Factors” in our most recently submitted 10-K and 10-Q. We disclaim any obligation to update information contained in these forward-looking statements whether as a result of new information, future events, or otherwise.

1 Earnings per share is calculated using the diluted number of shares for all periods presented.

2 Non-GAAP results of operations exclude amortization of intangible assets, stock-based compensation expenses, acquisition-related retention costs, gain on sale of investment, restructuring charges/recoveries, prior acquisition-related costs, and the related effects on income taxes as well as certain discrete GAAP provisions for income tax matters recognized ratably for non-GAAP purposes.

3 IDC Worldwide Quarterly Storage Software Tracker Q3 2007.

4 IDC Worldwide Quarterly Disk Storage Systems Tracker Q3 2007.

5 Magic Quadrant for Midrange Enterprise Disk Arrays, 2H07, by Stanley Zaffos, Roger W. Cox, and Pushan Rinnen, January 2008.

Network Appliance Usage of Non-GAAP Financials

The Company refers to the non-GAAP financial measures cited above in making operating decisions because they provide meaningful supplemental information regarding the Company's operational performance. These non-GAAP results of operations exclude amortization of intangible assets, stock-based compensation expenses, acquisition-related retention costs, gain on sale of investment, restructuring charges/recoveries, prior acquisition-related costs, and the related effects on income taxes as well as certain discrete GAAP provisions for income tax matters recognized ratably for non-GAAP purposes. We have excluded these items in order to enhance investors’ understanding of our ongoing operations. The use of these non-GAAP financial measures has material limitations because they should not be used to evaluate our company without reference to their corresponding GAAP financial measures. As such, we compensate for these material limitations by using these non-GAAP financial measures in conjunction with GAAP financial measures.

These non-GAAP financial measures facilitate management's internal comparisons to the Company's historical operating results and comparisons to competitors' operating results. We include these non-GAAP financial measures in our earnings announcement because we believe they are useful to investors in allowing for greater transparency with respect to supplemental information used by management in its financial and operational decision making, such as employee compensation planning. In addition, we have historically reported similar non-GAAP financial measures to our investors and believe that the inclusion of comparative numbers provides consistency in our financial reporting at this time.

NETWORK APPLIANCE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
   
January 25, 2008 April 27, 2007
 
ASSETS
 
CURRENT ASSETS:
Cash and cash equivalents $ 776,359 $ 489,079
Short-term investments 351,232 819,702
Accounts receivable, net 462,769 548,249
Inventories 60,102 54,880
Prepaid expenses and other assets 103,837 99,840
Short-term restricted cash and investments 65,756 118,312
Short-term deferred income taxes   96,629   110,741
Total current assets 1,916,684 2,240,803
 
PROPERTY AND EQUIPMENT, net 661,128 603,523
 
GOODWILL 600,845 601,056
INTANGIBLE ASSETS, net 62,577 83,009
LONG-TERM RESTRICTED CASH AND INVESTMENTS 312,617 3,639
LONG-TERM DEFERRED INCOME TAXES AND OTHER ASSETS   225,575   126,448
$ 3,779,426 $ 3,658,478
 
 
 
LIABILITIES AND STOCKHOLDERS' EQUITY
 
CURRENT LIABILITIES:
Current portion of long-term debt $ 28,790 $ 85,110
Accounts payable 119,867 144,112
Income taxes payable 12,839 53,371
Accrued compensation and related benefits 175,285 177,327
Other accrued liabilities 111,053 97,017
Deferred revenue   776,648   630,610
Total current liabilities   1,224,482   1,187,547
 
LONG-TERM DEBT 250,000 -
LONG-TERM DEFERRED REVENUE 564,812 472,423
OTHER LONG-TERM OBLIGATIONS   79,599   9,487
  2,118,893   1,669,457
 
STOCKHOLDERS' EQUITY   1,660,533   1,989,021
$ 3,779,426 $ 3,658,478
NETWORK APPLIANCE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except net income per share amounts)
(Unaudited)
       
 
Quarter Ended Nine Months Ended

January 25,
2008

January 26,
2007

January 25,
2008

January 26,
2007

 
REVENUES:
Product $ 608,138 $ 550,882 $ 1,612,864 $ 1,497,777
Software entitlements and maintenance 125,568 84,969 350,628 242,052
Service   150,297     93,427     401,944     263,260  
Total revenues   884,003     729,278     2,365,436     2,003,089  
 
COST OF REVENUES:
Cost of product 250,428 211,211 654,575 585,437
Cost of software entitlements and maintenance 2,560 2,710 6,558 7,458
Cost of service   91,713     71,248     263,799     191,708  
Total cost of revenues   344,701     285,169     924,932     784,603  
GROSS MARGIN   539,302     444,109     1,440,504     1,218,486  
 
OPERATING EXPENSES:
Sales and marketing 279,114 236,433 779,131 636,214
Research and development 111,717 97,516 327,237 276,555
General and administrative 42,787 37,724 123,743 105,337
Restructuring recoveries - - - (74 )
Gain on sale of assets   -     -     -     (25,339 )
Total operating expenses   433,618     371,673     1,230,111     992,693  
 
INCOME FROM OPERATIONS 105,684 72,436 210,393 225,793
 
OTHER INCOME (EXPENSES), net:
Interest income 16,964 17,086 50,295 51,220
Interest expense (3,639 ) (2,335 ) (6,130 ) (11,377 )
Net gain (loss) on investments (1,005 ) 884 12,614 (1,116 )
Other income (expense), net   (619 )   533     443     3,191  
Total other income, net   11,701     16,168     57,222     41,918  
 
INCOME BEFORE INCOME TAXES 117,385 88,604 267,615 267,711
 
PROVISION FOR INCOME TAXES   15,562     22,090     47,697     59,597  
 
NET INCOME $ 101,823   $ 66,514   $ 219,918   $ 208,114  
 
NET INCOME PER SHARE:
BASIC $ 0.30   $ 0.18   $ 0.62   $ 0.56  
 
DILUTED $ 0.29   $ 0.17   $ 0.60   $ 0.53  
 
SHARES USED IN PER SHARE CALCULATION:
BASIC   344,275     371,287     354,799     371,938  
 
DILUTED   352,780     389,120     365,290     389,555  
NETWORK APPLIANCE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
(In thousands)
(Unaudited)
                 
Quarter Ended Nine Months Ended

January 25,
2008

January 26,
2007

January 25,
2008

 

January 26,
2007

 

Cash Flows from Operating Activities:
Net income $ 101,823 $ 66,514 $ 219,918 $ 208,114
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 28,905 22,936 83,921 62,316
Amortization of intangible assets 6,248 5,597 18,945 14,970
Amortization of patents 495 495 1,486 1,486
Stock-based compensation 34,296 39,234 113,077 124,679
Net (gain) loss on investments 1,005 (884 ) (12,614 ) 1,116
Gain on sale of assets - - - (25,339 )
Net loss on disposal of equipment 583 384 828 686
Allowance for doubtful accounts 107 (8 ) 355 186
Deferred income taxes (39,306 ) (65,849 ) (74,815 ) (88,483 )
Deferred rent 120 239 632 979
Income tax benefit from stock-based compensation 48,571 53,439 96,990 132,459
Excess tax benefit from stock-based compensation (31,521 ) (19,618 ) (47,107 ) (43,463 )
Changes in assets and liabilities:
Accounts receivable (36,124 ) (29,950 ) 129,584 20,403
Inventories 2,519 (4,700 ) (5,184 ) 3,495
Prepaid expenses and other assets (2,380 ) (12,549 ) (23,599 ) (44,380 )
Accounts payable 6,312 (2,759 ) (33,865 ) 4,446
Income taxes payable 2,348 31,678 11,045 (12,407 )
Accrued compensation and related benefits 24,862 23,197 (5,022 ) 16,870
Other accrued liabilities 13,532 17,144 3,994 12,127
Deferred revenue   124,619     125,767     237,016     263,449  
Net cash provided by operating activities   287,014     250,307     715,585     653,709  
Cash Flows from Investing Activities:
Purchases of investments (489,993 ) (410,623 ) (929,983 ) (1,938,191 )
Redemptions of investments 492,816 463,169 1,084,954 2,007,726
Redemptions of restricted investments 18,321 10,598 53,747 63,236
Decrease (increase) in restricted cash 43 (72 ) (1,400 ) 333
Proceeds from sale of assets - - - 23,914
Proceeds from sales of nonmarketable securities 898 1,757 898 1,774
Proceeds from sales of marketable securities - - 18,256 -
Purchases of property and equipment (53,689 ) (36,398 ) (124,847 ) (112,411 )
Purchases of nonmarketable securities (200 ) - (4,235 ) (1,333 )
Purchase of business, net of cash acquired   211     (131,241 )   211     (131,241 )
Net cash provided by (used in) investing activities   (31,593 )   (102,810 )   97,601     (86,193 )
Cash Flows from Financing Activities:
Proceeds from sale of common stock related to
employee stock transactions 34,120 84,965 100,187 177,425
Tax withholding payments reimbursed by restricted stock (649 ) (369 ) (5,851 ) (4,692 )
Excess tax benefit from stock-based compensation 31,521 19,618 47,107 43,463
Proceeds from revolving credit facility 13,000 - 262,754 -
Repayment of debt (18,980 ) (42,297 ) (56,320 ) (148,869 )
Repayment of revolving credit facility (13,000 ) - (13,000 ) -
Repurchases of common stock   (144,278 )   (241,800 )   (844,251 )   (605,708 )
Net cash used in financing activities   (98,266 )   (179,883 )   (509,374 )   (538,381 )
 
Effect of Exchange Rate Changes on Cash (6,503 ) (736 ) (16,532 ) (175 )
 
Net Increase (decrease) in Cash and Cash Equivalents 150,652 (33,122 ) 287,280 28,960
Cash and Cash Equivalents:
Beginning of period   625,707     523,338     489,079     461,256  
End of period $ 776,359   $ 490,216   $ 776,359   $ 490,216  

NETWORK APPLIANCE, INC.

SUPPLEMENTAL INFORMATION
(In thousands)
(Unaudited)
             
QUARTER ENDED JANUARY 25, 2008        
 
Amortization of Intangible Assets Stock-based Compensation Expenses Acquisition-Related Retention Cost Restructuring Recoveries Prior Acquisition-related Costs Gain on Sale of Assets Net Gain on Investments Total
 
Cost of product revenues $ 5,278 $ 802 - - - - - $ 6,080
Cost of service revenues - 2,511 - - - - - 2,511
Sales and marketing expense 970 14,802 761 - - - - 16,534
Research and development expense - 10,815 - - - - - 10,815
General and administrative expense - 5,366 - - - - - 5,366
Net gain on investments - - - - - - 1,005 1,005
               
Effect on pre-tax income $ 6,248 $ 34,296 $ 761 - - - $ 1,005 $ 42,311
             
NINE MONTHS ENDED JANUARY 25, 2008        
 
Amortization of Intangible Assets Stock-based Compensation Expenses Acquisition-Related Retention Cost Restructuring Recoveries Prior Acquisition-related Costs Gain on Sale of Assets Net Gain on Investments Total
 
Cost of product revenues $ 15,834 $ 2,514 - - - - - $ 18,348
Cost of service revenues - 7,788 - - - - - 7,788
Sales and marketing expense 2,911 49,428 3,086 - - - - 55,425
Research and development expense - 36,323 - - - - - 36,323
General and administrative expense 200 17,024 - - 2,800 - - 20,024
Net gain on investments - - - - - - (12,614 ) (12,614 )
               
Effect on pre-tax income $ 18,945 $ 113,077 $ 3,086 - $ 2,800 - ($12,614 ) $ 125,294
NETWORK APPLIANCE, INC.
SUPPLEMENTAL INFORMATION
(In thousands)
(Unaudited)
 
QUARTER ENDED JANUARY 26, 2007        
 
Amortization of Intangible Assets Stock-based Compensation Expenses Acquisition-Related Retention Cost Restructuring Recoveries Prior Acquisition-related Costs Gain on Sale of Assets Net Loss on Investments Total
 
Cost of product revenues $ 4,572 $ 922 - - - - - $ 5,494
Cost of service revenues - 2,533 - - - - - 2,533
Sales and marketing expense 788 17,315 581 - - - - 18,684
Research and development expense - 12,276 - - - - - 12,276
General and administrative expense 237 6,188 - - - - - 6,425
Restructuring recoveries - - - - - - - -
Gain on sale of assets - - - - - - - -
Net loss on investments - - - - - - (884 ) (884 )
               
Effect on pre-tax income $ 5,597 $ 39,234 $ 581 - - - ($884 ) $ 44,528
             
NINE MONTHS ENDED JANUARY 26, 2007        
 
Amortization of Intangible Assets Stock-based Compensation Expenses Acquisition-Related Retention Cost Restructuring Recoveries Prior Acquisition-related Costs Gain on Sale of Assets Net Loss on Investments Total
 
Cost of product revenues $ 12,303 $ 2,660 - - - - - $ 14,963
Cost of service revenues - 7,657 - - - - - 7,657
Sales and marketing expense 1,955 54,747 581 - - - - 57,283
Research and development expense - 39,166 - - - - - 39,166
General and administrative expense 712 20,449 - - - - - 21,161
Restructuring recoveries - - - (74 ) - - - (74 )
Gain on sale of assets - - - - - (25,339 ) - (25,339 )
Net loss on investments - - - - - - 1,116 1,116
               
Effect on pre-tax income $ 14,970 $ 124,679 $ 581 ($74 ) - ($25,339 ) $ 1,116 $ 115,933
NETWORK APPLIANCE, INC.
RECONCILIATION OF NON-GAAP AND GAAP
IN THE CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except net income per share amounts)
(Unaudited)
       
Quarter Ended Nine Months Ended
January 25, 2008 January 26, 2007 January 25, 2008 January 26, 2007
 
SUMMARY RECONCILIATION OF NET INCOME
NET INCOME $ 101,823 $ 66,514 $ 219,918 $ 208,114
 
Adjustments:
Amortization of intangible assets 6,248 5,597 18,945 14,970
Stock-based compensation expenses 34,296 39,234 113,077 124,679
Acquisition-related retention cost 761 581 3,086 581
Prior acquisition-related costs - - 2,800 -
Restructuring recoveries - - - (74 )
Gain on sale of assets - - - (25,339 )
Net (gain) loss on investments 1,005 (884 ) (12,614 ) 1,116
Tax effect on sale of investments - - 5,477 -
Discrete GAAP tax provision items ratably for
non-GAAP purposes (1,542 ) 257 (1,542 ) 257
Tax effect on sale of assets - 399 - 5,005
Discrete GAAP tax provision items 1,601 (336 ) 917 (2,495 )
Income tax effect (12,443 ) (276 ) (25,914 ) (10,308 )
       
NON-GAAP NET INCOME $ 131,749   $ 111,086   $ 324,150   $ 316,506  
 
 
NET INCOME PER SHARE $ 0.289 $ 0.171 $ 0.602 $ 0.534
 
Adjustments:
Amortization of intangible assets 0.017 0.014 0.052 0.038
Stock-based compensation expenses 0.097 0.101 0.310 0.320
Acquisition-related retention cost 0.002 0.001 0.008 0.001
Prior acquisition-related costs - - 0.008 -
Restructuring recoveries - - - -
Gain on sale of assets - - - (0.065 )
Net (gain) loss on investments 0.003 (0.002 ) (0.035 ) 0.003
Tax effect on sale of investments - - 0.015 -
Discrete GAAP tax provision items ratably for
non-GAAP purposes (0.004 ) 0.001 (0.004 ) 0.001
Tax effect on sale of assets - 0.001 - 0.013
Discrete GAAP tax provision items 0.005 (0.001 ) 0.002 (0.006 )
Income tax effect (0.035 ) (0.001 ) (0.071 ) (0.027 )
       
NON-GAAP NET INCOME PER SHARE $ 0.374   $ 0.285   $ 0.887   $ 0.812  
NETWORK APPLIANCE, INC.
RECONCILIATION OF NON GAAP GUIDANCE TO GAAP
EXPRESSED AS EARNINGS PER SHARE
FOURTH QUARTER 2008
(Unaudited)
 
 
 
Fourth Quarter
  2008  
 
Non-GAAP Guidance $ 0.35 - $0.37
 
 
Adjustments of Specific Items to
Earnings Per Share for the Fourth
Quarter 2008:
 
Amortization of intangible assets (0.03 )
Stock based compensation expense (0.11 )
Income tax effect   0.02  
Total Adjustments (0.12 )
 
GAAP Guidance - Earnings Per Share $ 0.23 - $0.25

CONTACT:
NetApp
Jodi Baumann, 408-822-3974 (Press)
Jodi.Baumann@netapp.com
Tara Dhillon, 408-822-6909 (Investors)
tara@netapp.com
Billie Fagenstrom, 408-822-6428 (Investors)
billief@netapp.com