NetApp Announces Results for Second Quarter Fiscal Year 2013

NetApp Announces Results for Second Quarter Fiscal Year 2013 
Reports Q2 FY'13 Revenues of $1.541 Billion; Non-GAAP Earnings per
Share of $0.51 -- Company Increases Stock Repurchase Authorization 
SUNNYVALE, CA -- (Marketwire) -- 11/14/12 --  NetApp (NASDAQ: NTAP)
today reported results for the second quarter of fiscal year 2013,
which ended October 26, 2012. Revenues for the second quarter of
fiscal year 2013 totaled $1.541 billion and were in line with prior
guidance. Revenues for the same period a year ago totaled $1.507
billion. 
For the second quarter of fiscal year 2013, GAAP net income was $110
million, or $0.30 per share,(1) compared to GAAP net income of $166
million, or $0.44 per share for the same period a year ago. Non-GAAP
net income for the second quarter of fiscal year 2013 was $189
million, or $0.51 per share,(2) compared to non-GAAP net income of
$236 million, or $0.63 per share for the same period a year ago. 
Revenues for the first six months of fiscal year 2013 totaled $2.986
billion compared to revenues of $2.965 billion for the first six
months of the prior fiscal year. GAAP net income for the first six
months of fiscal year 2013 totaled $173 million, or $0.47 per share,
compared to GAAP net income of $305 million, or $0.78 per share for
the first six months of the prior fiscal year. Non-GAAP net income
for the first six months of fiscal year 2013 totaled $345 million, or
$0.93 per share, compared to non-GAAP net income of $458 million, or
$1.17 per share for the first six months of the prior fiscal year. 
"NetApp produced healthy financial results in the second quarter with
revenue roughly at the midpoint of and EPS above our guidance range,
despite a difficult environment. We saw a strong uptake of NetApp(R)
Data ONTAP(R) 8 and clustered Data ONTAP, as customers are looking to
build agile data infrastructure environments with intelligent data
management, nearly unlimited scalability, and nondisruptive
operations," said Tom Georgens, president and CEO. "We also saw
momentum in our partnering strategy with continued FlexPod(R) growth
and a record high revenue contribution from Arrow and Avnet. Our
focus on delivering best-of-breed storage solutions and the leverage
we gain through go-to-market and channel partne
rs will enable NetApp
to grow our business and gain share." 
NetApp also announces it will continue its share repurchase program
with an additional $1.5 billion authorized. Under this program,
NetApp can purchase shares of its outstanding common stock through
open market and in privately negotiated transactions at prices deemed
appropriate by management. The timing and amount of repurchase
transactions under the program will depend on market conditions,
corporate considerations, and regulatory requirements. The purchases
will be funded from available working capital. 
Outlook 
NetApp's outlook for the third quarter of fiscal year 2013 is based
on current business expectations, market conditions, and continued
uncertainty in the macroeconomic environment. 


 
--  NetApp estimates revenue for the third quarter of fiscal year 2013 to
    be in the range of $1.575 billion to $1.675 billion.
--  NetApp estimates GAAP earnings per share for the third quarter of
    fiscal year 2013 to be approximately $0.29 to $0.34 per share. NetApp
    estimates non-GAAP earnings per share for the third quarter of fiscal
    year 2013 to be approximately $0.53 to $0.58 per share.
--  NetApp estimates that the share count for the third quarter of fiscal
    year 2013 will decrease to approximately 365 million shares.

  
Business Highlights
 NetApp is built on a culture of innovation that
aims to provide customers with the best experience possible. This
comes not only from NetApp's direct relationship with customers, but
also by delivering compelling technology solutions and forging
best-in-class partnerships.  
In its second quarter of fiscal year 2013, NetApp's culture of
innovation was on display across every aspect of its business. NetApp
continued to strengthen and extend its best-of-breed partner
ecosystem by announcing new joint solutions and key integrations with
industry leaders such as Cisco, Microsoft, VMware, Oracle, and Citrix
that will help customers of all sizes accelerate their businesses. A
foundational component to several of the new joint offerings is
NetApp's Data ONTAP, the world's #1 storage operating system.  
Highlights include: 
NetApp Announces Definitive Agreement to Acquire CacheIQ, Inc. 


 
--  NetApp has entered into a definitive agreement to acquire CacheIQ,
    Inc., a privately held storage solutions company based in Austin,
    Texas. The acquisition will provide NetApp with intellectual property
    that extends its capabilities to support nondisruptive operations for
    enterprise data center environments. NetApp will integrate this
    intellectual property into its product offerings over time. Financial
    terms of the acquisition are not being disclosed at this time.

  
Best-in-Class Partner Integration Fuels Innovation for Customers 


 
--  NetApp and Cisco expand data center infrastructure solutions for
    midsized businesses to large enterprises. The FlexPod data center
    platform now features support and validation for VMware vSphere on
    NetApp clustered Data ONTAP to help organizations drive growth by
    adding nodes to their storage cluster creating large storage pools
    that span storage devices and can scale almost infinitely. The two
    companies also introduced ExpressPod, a prepackaged and tested
    solution for growing small and medium-sized organizations that require
    increased IT efficiency and simplicity. Celebrating its two-year
    anniversary, more than 1,500 organizations in 35 countries are
    accelerating their transition to the cloud with FlexPod. Additionally,
    more than 660 certified FlexPod Partners around the world are helping
    these customers deploy their infrastructures more quickly and easily.
--  NetApp and Microsoft technology collaboration drives public, private,
    and hybrid cloud migration. NetApp announced support for Windows
    Server 2012 with storage solutions for server and desktop
    virtualization, storage and availability, Web and application platform
    development, and private cloud deployment. For organizations of any
    size and in any industry, this close collaboration simplifies and
    accelerates how storage is pooled, provisioned, accessed, and managed
    in Windows environments.
--  NetApp and VMware team up to accelerate customers' transition to an
    agile data infrastructure. NetApp and VMware continue to build on
    their nearly 10 year partnership by unveiling integration between
    VMware vSphere 5.1 and NetApp clustered Data ONTAP. The integration
    will also enable customers to securely manage and deploy infinite
    storage pools and to deliver nondisruptive migration of data among
    hundreds of virtual machines at a time. Customers will be able to
    achieve continuous data access and uninterrupted business operations
    as their infrastructures grow and scale in capacity and performance.
--  NetApp and Oracle integration helps customers reduce cost and
    complexity of managing business-critical applications. NetApp achieved
    Oracle Validated Integration of the NetApp Storage System Plug-In
    version 1.0 with Oracle Enterprise Manager 12c, extending the
    application-to-disk coverage of Oracle Enterprise Manager environments
    that i
nclude NetApp managed storage. As a result, customers will
    benefit from improved risk management and smoother upgrade
    capabilities, leading to lower total cost of ownership and greater
    overall satisfaction.
--  NetApp and Citrix collaborate to simplify cloud storage. NetApp and
    Citrix announced an extension of their current collaboration aimed at
    accelerating the adoption of enterprise cloud deployments. The two
    companies will provide a fully integrated cloud orchestration and
    storage solution that will address storage automation, resource
    allocation, and virtual machine backup and recovery. The move greatly
    simplifies cloud storage deployment for customers and will result in
    faster transitions to private and hybrid clouds.

  
NetApp Enhances Flash Portfolio and Ecosystem 


 
--  NetApp Flash Accel helps customers enhance application and server
    performance. NetApp introduced NetApp Flash Accel to speed customer
    application performance by turning server-side Flash into a cache for
    storing "hot," frequently accessed data. From servers to their
    back-end storage, cost- and performance-conscious system architects
    can now balance how Flash is used within their organizations to
    maximize application performance, minimize rising IT costs, preserve
    high availability, protect data, and simplify management. NetApp also
    expanded its Alliance Partner Program to embrace hardware and software
    server-caching partners looking to develop solutions with NetApp. This
    will provide the widest coverage for joint customers' infrastructures
    as they deploy server-side caching to deliver increased ROI.
--  NetApp signs technology reseller agreement with Fusion-io. As part of
    its commitment to providing customers with end-to-end Flash
    technologies, NetApp entered into a resale agreement with Fusion-io, a
    leader in Flash memory solutions. NetApp will continue to resell
    Fusion-io ioMemory platform products and two server caching software
    products: ioTurbine for virtualized environments and Direct Cache for
    nonvirtualized environments.

  
NetApp Recognized for Its Culture and Innovative Spirit 


 
--  NetApp repeats as one of the world's most innovative companies. For
    the second consecutive year, NetApp made Forbes magazine's "World's
    Most Innovative Companies" list for 2012. As the only storage vendor
    to make this year's list, the recognition is a testament to NetApp's
    20 years of innovation and true innovative spirit which continues to
    thrive today to help customers and partners achieve great business
    outcomes.
--  NetApp cements its standing as one of the world's best places to work.
    NetApp was named the #3 best workplace in the world by the Great Place
    to Work Institute on November 13, 2012. It marks the second
    consecutive year that NetApp finished in the top 5 of this exclusive
    list and is a testament to the company's unique workplace culture and
    commitment to employee excellence which help produce great results for
    NetApp customers and partners.

  
Webcast and Conference Call Information
 The NetApp second quarter
fiscal year 2013 conference call will be broadcast live on the
Internet at investors.netapp.com on Wednesday, November 14, 2012, at
2 p.m. Pacific Time. This press release and any other information
related to the call will also be posted on the Web site at that
location. An audio replay Webcast will be available after 4 p.m.
Pacific Time on the Web site. 
NetApp uses a hybrid format for disclosing key financial information
associated with our quarterly results. Concurrent with the press
release, NetApp posts a supplemental commentary with financial
information and statistics to our Web site at investors.netapp.com. 
About NetApp
 NetApp creates innovative storage and data management
solutions that deliver outstanding cost efficiency and accelerate
business breakthroughs. Our commitment to living our core values and
consistently being recognized as a great place to work around the
world are fundamental to our long-term growth and success, as well as
the success of our pathway partners and customers. Discover our
passion for helping companies around the world go further, faster 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 forecasts for the third
quarter of fiscal year 2013, the benefits to us and our customers of
our products and services, the expected benefits of partnerships and
alliances, and our statements regarding future repurchases of our
common stock, all of which involve risk and uncertainty. Actual
results may differ materially from our statements and projections for
a variety of reasons, including general economic and market
conditions, and the continuing deliberations regarding future tax and
fiscal policy in the U.S.; and matters specific to our business, such
as customer demand for and acceptance of our products and services.
These and other equally important factors are described in reports
and documents we file from time to time with the Securities and
Exchange Commission (SEC), including the factors described under the
sections titled "Risk Factors" in our most recently submitted Annual
and Quarterly Reports on Forms 10-K and 10-Q, respectively. We
disclaim any obligation to update information contained in these
forward-looking statements whether as a result of new information,
future events, or otherwise. 
NetApp, the NetApp logo, Go further, faster, Data ONTAP, Flash Accel
and FlexPod are trademarks of NetApp, Inc. All other marks are the
property of their respective owners. 
(1) GAAP earnings per share is calculated using the diluted number of
shares for all periods presented.
 (2) Non-GAAP net income excludes
the amortization of intangible assets, stock-based compensation,
acquisition-related income and expenses, restructuring and other
charges, asset impairments, non-cash interest expense associated with
our convertible debt, net losses or gains on investments, and our
GAAP tax provision, but includes a non-GAAP tax provision based upon
our projected annual non-GAAP effective tax rate for the first three
quarters of the fiscal year and an actual non-GAAP tax provision for
the fourth quarter of the fiscal year. Non-GAAP earnings per share is
calculated using the diluted number of shares for all periods
presented. 
NetApp 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 ongoing operational performance. Non-GAAP net income
excludes the amortization of intangible assets, stock-based
compensation, acquisition-related income and expenses, restructuring
and other charges, asset impairments, non-cash interest expense
associated with our convertible debt, net losses or gains on
investments, and our GAAP tax provision, but includes a non-GAAP tax
provision based upon our projected annual non-GAAP effective tax rate
for the first three quarters of the fisca
l year and an actual
non-GAAP tax provision for the fourth quarter of the fiscal year. 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 are used to: (1) measure Company
performance against historical results, (2) facilitate comparisons to
our competitors' operating results, and (3) allow greater
transparency with respect to information used by management in
financial and operational decision making. In addition, these
non-GAAP financial measures are used to measure Company performance
for the purposes of determining employee incentive plan compensation.
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. 


 
                                                                            
                                NETAPP, INC.                                
                    CONDENSED CONSOLIDATED BALANCE SHEETS                   
                                (In millions)                               
                                 (Unaudited)                                
                                                                            
                                          October 26, 2012   April 27, 2012 
                                         ----------------- -----------------
                                                                            
                  ASSETS                                                    
                                                                            
Current assets:                                                             
  Cash, cash equivalents and investments $         5,571.0 $         5,398.5
  Accounts receivable, net                           615.0             830.9
  Inventories                                        213.2             161.5
  Other current assets                               488.5             435.6
                                         ----------------- -----------------
    Total current assets                           6,887.7           6,826.5
                                                                            
Property and equipment, net                        1,132.4           1,137.2
Goodwill and other intangible assets, net          1,098.3           1,141.2
Other non-current assets                             435.5             427.4
                                         ----------------- -----------------
  Total assets                           $         9,553.9 $         9,532.3
                                         ================= =================
                                                                            
                                                                            
   LIABILITIES AND STOCKHOLDERS' EQUITY                                     
                                                                            
Current liabilities:                                                        
  Accounts payable                       $           246.6 $           233.1
  Accrued compensation and other current                                    
   liabilities                                       689.2             717.9
  1.75% Convertible Senior Notes due 2013          1,229.4           1,202.3
  Short-term deferred revenue                      1,408.5           1,366.5
                                         ----------------- -----------------
    Total current liabilities                      3,573.7           3,519.8
                                         ----------------- -----------------
                                                                            
Other long-term liabilities                          216.3             206.9
Long-term deferred revenue                         1,361.7           1,449.4
                                         ----------------- -----------------
    Total liabilities                              5,151.7           5,176.1
                                         ----------------- -----------------
                                                                            
1.75% Convertible Senior Notes due 2013                  -              62.6
                                                                            
Stockholders' equity                               4,402.2           4,293.6
                                         ----------------- -----------------
  Total liabilities and stockholders'                                       
   equity                                $         9,553.9 $         9,532.3
                                         ================= =================
                                                                            
                                                                            
                                                                            
                                NETAPP, INC.                                
              CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS               
             (In millions, except net income per share amounts)             
                                (Unaudited)                                 
                                                                            
                               Three Months Ended       Six Months Ended    
                             ----------------------  ---------------------- 
                               October     October     October     October  
                              26, 2012    28, 2011    26, 2012    28, 2011  
                             ----------  ----------  ----------  ---------- 
                                                                            
Revenues:                                                                   
  Product                    $    995.8  $  1,016.2  $  1,893.8  $  1,981.9 
  Software entitlements and                                                 
   maintenance                    219.4       198.0       437.9       396.2 
  Service                         326.0       292.8       654.1       587.1 
                             ----------  ----------  ----------  ---------- 
    Net revenues                1,541.2     1,507.0     2,985.8     2,965.2 
                             ----------  ----------  ----------  ---------- 
                                                                            
Cost of revenues:                                                           
  Cost of product                 477.3       460.7       929.5       898.1 
  Cost of software                                                          
   entitlements and                                                         
   maintenance                      7.0         5.6        13.6        10.9 
  Cost of service                 143.0       127.7       278.7       246.3 
                             ----------  ----------  ----------  ---------- 
    Total cost of revenues        627.3       594.0     1,221.8     1,155.3 
                             ----------  ----------  ----------  ---------- 
Gross profit                      913.9       913.0     1,764.0     1,809.9 
                             ----------  ----------  ----------  ---------- 
                                                                            
Operating expenses:                                                         
  Sales and marketing             488.2       454.1       971.1       908.9 
  Research and development        223.8   
    199.7       445.2       398.3 
  General and administrative       66.6        65.1       132.2       130.2 
  Acquisition-related expense         -         1.7           -         3.9 
                             ----------  ----------  ----------  ---------- 
    Total operating expenses      778.6       720.6     1,548.5     1,441.3 
                             ----------  ----------  ----------  ---------- 
                                                                            
Income from operations            135.3       192.4       215.5       368.6 
                                                                            
Other expense, net                                                          
  Interest income                  11.0         8.3        21.8        18.9 
  Interest expense                (19.8)      (16.4)      (39.7)      (35.8)
  Other income (expense), net       1.2        (0.4)        4.3        (0.7)
                             ----------  ----------  ----------  ---------- 
    Total other expense, net       (7.6)       (8.5)      (13.6)      (17.6)
                             ----------  ----------  ----------  ---------- 
                                                                            
Income before income taxes        127.7       183.9       201.9       351.0 
                                                                            
Provision for income taxes         18.1        18.3        28.5        45.9 
                             ----------  ----------  ----------  ---------- 
                                                                            
Net income                   $    109.6  $    165.6  $    173.4  $    305.1 
                             ==========  ==========  ==========  ========== 
                                                                            
Net income per share:                                                       
  Basic                      $     0.30  $     0.46  $     0.48  $     0.83 
                             ==========  ==========  ==========  ========== 
  Diluted                    $     0.30  $     0.44  $     0.47  $     0.78 
                             ==========  ==========  ==========  ========== 
                                                                            
Shares used in net income per                                               
 share calculations:                                                        
  Basic                           362.0       361.5       364.1       365.9 
                             ==========  ==========  ==========  ========== 
  Diluted                         368.2       376.0       369.7       390.8 
                             ==========  ==========  ==========  ========== 
                                                                            
                                                                            
                                                                            
                                NETAPP, INC.                                
               CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW               
                               (In millions)                                
                                (Unaudited)                                 
                                                                            
                               Three Months Ended       Six Months Ended    
                             ----------------------  ---------------------- 
                               October     October     October     October  
                              26, 2012    28, 2011    26, 2012    28, 2011  
                             ----------  ----------  ----------  ---------- 
                                                                            
Cash flows from operating                                                   
 activities:                                                                
  Net income                 $    109.6  $    165.6  $    173.4  $    305.1 
  Adjustments to reconcile                                                  
   net income to net cash                                                   
   provided by operating                                                    
   activities:                                                              
    Depreciation and                                                        
     amortization                  86.7        68.4       169.1       136.9 
    Stock-based compensation       65.0        63.0       144.2       121.1 
    Accretion of discount and                                               
     issuance costs on Notes       14.4        11.5        28.7        25.2 
    Tax benefit from stock-                                                 
     based compensation            37.0        50.4        28.2        79.1 
    Excess tax benefit from                                                 
     stock-based compensation     (38.7)      (52.6)      (43.6)      (84.7)
    Other, net                    (15.9)      (43.8)      (39.9)      (74.4)
  Changes in assets and                                                     
   liabilities, net of                                                      
   acquisition of business:                                                 
    Accounts receivable           (31.3)      (29.4)      212.9       115.6 
    Inventories                    (9.5)      (25.1)      (51.7)      (18.3)
    Accounts payable              (28.0)       22.8        13.9        45.6 
    Accrued compensation and                                                
     other current                                                          
     liabilities                  130.8        75.2       (15.9)     (173.1)
    Deferred revenue                4.4        60.2       (42.6)      126.9 
    Changes in other                                                        
     operating assets and                                                   
     liabilities, net              11.9         4.0       (11.1)        5.8 
                             ----------  ----------  ----------  ---------- 
      Net cash provided by                                                  
       operating activities       336.4       370.2       565.6       610.8 
                             ----------  ----------  ----------  ---------- 
Cash flows from investing                                                   
 activities:                                                                
  Redemptions (purchases) of                                                
   investments, net               159.5      (205.4)       93.4        40.4 
  Purchases of property and                                                 
   equipment                      (67.1)      (93.3)     (129.0)     (191.6)
  Acquisition of business             -           -           -      (480.0)
  Other investing activities,                                               
   net                              1.5         0.3         2.8         2.0 
                             ----------  ----------  ----------  ---------- 
      Net cash provided by                                                  
       (used in) investing                                                  
       activities                  93.9      (298.4)      (32.8)     (629.2)
                             ----------  ----------  ----------  ---------- 
Cash flows from financing                                                   
 activities:                                                                
  Issuance of common stock         10.1         5.3        45.1        51.9 
  Repurchase and retirement                                                 
   of common stock               (198.3)     (400.0)     (348.3)     (600.0)
  Excess tax benefit from                                                   
   stock-based compensation        38.7     
   52.6        43.6        84.7 
  Other financing activities,                                               
   net                              1.7         1.3        (0.3)        1.6 
                             ----------  ----------  ----------  ---------- 
      Net cash used in                                                      
       financing activities      (147.8)     (340.8)     (259.9)     (461.8)
                             ----------  ----------  ----------  ---------- 
                                                                            
Effect of exchange rate                                                     
 changes on cash and cash                                                   
 equivalents                        4.9        (5.2)       (5.9)       (8.1)
                                                                            
Net increase (decrease) in                                                  
 cash and cash equivalents        287.4      (274.2)      267.0      (488.3)
Cash and cash equivalents:                                                  
  Beginning of period           1,529.4     2,543.2     1,549.8     2,757.3 
                             ----------  ----------  ----------  ---------- 
  End of period              $  1,816.8  $  2,269.0  $  1,816.8  $  2,269.0 
                             ==========  ==========  ==========  ========== 
                                                                            
                                                                            
                                                                            
                                NETAPP, INC.                                
                    RECONCILIATION OF NON-GAAP AND GAAP                     
           IN THE CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS           
             (In millions, except net income per share amounts)             
                                (Unaudited)                                 
                                                                            
                               Three Months Ended       Six Months Ended    
                             ----------------------  ---------------------- 
                               October     October     October     October  
                              26, 2012    28, 2011    26, 2012    28, 2011  
                             ----------  ----------  ----------  ---------- 
                                                                            
SUMMARY RECONCILIATION OF                                                   
 NET INCOME                                                                 
NET INCOME                   $    109.6  $    165.6       173.4       305.1 
                                                                            
Adjustments:                                                                
  Amortization of intangible                                                
   assets                          21.5        21.7        42.9        46.0 
  Stock-based compensation         65.0        63.0       144.2       121.1 
  Acquisition-related                                                       
   expense                            -         1.7           -        11.9 
  Non-cash interest expense        14.4        11.5        28.7        25.2 
  Income tax effect of non-                                                 
   GAAP adjustments               (21.5)      (28.0)      (43.8)      (51.5)
                                                                            
                             ----------  ----------  ----------  ---------- 
NON-GAAP NET INCOME          $    189.0  $    235.5  $    345.4  $    457.8 
                             ==========  ==========  ==========  ========== 
                                                                            
                                                                            
NET INCOME PER SHARE         $    0.298  $    0.440       0.469       0.781 
                                                                            
Adjustments:                                                                
  Amortization of intangible                                                
   assets                         0.058       0.058       0.116       0.118 
  Stock-based compensation        0.176       0.168       0.390       0.310 
  Acquisition-related                                                       
   expense                            -       0.004           -       0.030 
  Non-cash interest expense       0.039       0.031       0.078       0.064 
  Income tax effect of non-                                                 
   GAAP adjustments              (0.058)     (0.075)     (0.119)     (0.132)
                                                                            
                             ----------  ----------  ----------  ---------- 
NON-GAAP NET INCOME PER                                                     
 SHARE                       $    0.513  $    0.626  $    0.934  $    1.171 
                             ==========  ==========  ==========  ========== 
                                                                            
                                                                            
                                                                            
                                NETAPP, INC.                                
                          SUPPLEMENTAL INFORMATION                          
                                (In millions)                               
                                 (Unaudited)                                
                                                                            
                              Three Months Ended October 26, 2012           
                   ---------------------------------------------------------
                                                                            
                   Amortization                                             
                        of                   Acquisition-  Non-cash         
                    Intangible   Stock-based    related    Interest         
                      Assets    Compensation    Expense    Expense    Total 
                   ------------ ------------ ------------ --------- --------
                                                                            
                                                                            
Cost of product                                                             
 revenues          $       13.9 $        1.5 $          - $       - $   15.4
Cost of service                                                             
 revenues                     -          4.6            -         -      4.6
Sales and marketing                                                         
 expenses                   7.6         30.9            -         -     38.5
Research and                                                                
 development                                                                
 expenses                     -         19.3            -         -     19.3
General and                                                                 
 administrative                                                             
 expenses                     -          8.7            -         -      8.7
Interest expense              -            -            -      14.4     14.4
                   ------------ ------------ ------------ --------- --------
Effect on income                                                            
 before income                                                              
 taxes             $       21.5 $       65.0 $          - $    14.4 $  100.9
                   ============ ============ ============ ========= ========
                                              
                              
                                                                            
                                                                            
                               Six Months Ended October 26, 2012            
                   ---------------------------------------------------------
                                                                            
                   Amortization                                             
                        of                   Acquisition-  Non-cash         
                    Intangible   Stock-based    related    Interest         
                      Assets    Compensation    Expense    Expense    Total 
                   ------------ ------------ ------------ --------- --------
                                                                            
                                                                            
Cost of product                                                             
 revenues          $       27.9 $        3.3 $          - $       - $   31.2
Cost of service                                                             
 revenues                     -         10.2            -         -     10.2
Sales and marketing                                                         
 expense                   15.0         69.9            -         -     84.9
Research and                                                                
 development                                                                
 expense                      -         43.0            -         -     43.0
General and                                                                 
 administrative                                                             
 expense                      -         17.8            -         -     17.8
Interest expense              -            -            -      28.7     28.7
                   ------------ ------------ ------------ --------- --------
Effect on income                                                            
 before income                                                              
 taxes             $       42.9 $      144.2 $          - $    28.7 $  215.8
                   ============ ============ ============ ========= ========
                                                                            
                                                                            
                                                                            
                              Three Months Ended October 28, 2011           
                   ---------------------------------------------------------
                                                                            
                   Amortization                                             
                        of                   Acquisition-  Non-cash         
                    Intangible   Stock-based    related    Interest         
                      Assets    Compensation    Expense    Expense    Total 
                   ------------ ------------ ------------ --------- --------
                                                                            
Cost of product                                                             
 revenues          $       14.0 $        1.4 $          - $       - $   15.4
Cost of service                                                             
 revenues                     -          4.2            -         -      4.2
Sales and marketing                                                         
 expenses                   7.7         30.4            -         -     38.1
Research and                                                                
 development                                                                
 expenses                     -         18.2            -         -     18.2
General and                                                                 
 administrative                                                             
 expenses                     -          8.8            -         -      8.8
Acquisition-related                                                         
 expense                      -            -          1.7         -      1.7
Interest expense              -            -            -      11.5     11.5
                   ------------ ------------ ------------ --------- --------
Effect on income                                                            
 before income                                                              
 taxes             $       21.7 $       63.0 $        1.7 $    11.5 $   97.9
                   ============ ============ ============ ========= ========
                                                                            
                                                                            
                               Six Months Ended October 28, 2011            
                   ---------------------------------------------------------
                                                                            
                   Amortization                                             
                        of                   Acquisition-  Non-cash         
                    Intangible   Stock-based    related    Interest         
                      Assets    Compensation    Expense    Expense    Total 
                   ------------ ------------ ------------ --------- --------
                                                                            
Cost of product                                                             
 revenues          $       27.9 $        2.5 $        5.4 $       - $   35.8
Cost of service                                                             
 revenues                     -          8.1            -         -      8.1
Sales and marketing                                                         
 expense                   18.0         59.0            -         -     77.0
Research and                                                                
 development                                                                
 expense                    0.1         34.2          2.6         -     36.9
General and                                                                 
 administrative                                                             
 expense                      -         17.3            -         -     17.3
Acquisition-related                                                         
 expense                      -            -          3.9         -      3.9
Interest expense              -            -            -      25.2     25.2
                   ------------ ------------ ------------ --------- --------
Effect on income                                                            
 before income                                                              
 taxes             $       46.0 $      121.1 $       11.9 $    25.2 $  204.2
                   ============ ============ ============ ========= ========
                                                                            
                                                                            
                                                                            
                          NETAPP, INC.                          
           RECONCILIATION OF NON GAAP GUIDANCE TO GAAP          
                 EXPRESSED AS EARNINGS PER SHARE                
                       THIRD QUARTER 2013                       
                           (Unaudited)                          
                                                                
                                                                
                                             Third Quarter      
                                                  2013          
                                       -------------------------
            
                                                    
Non-GAAP Guidance - Net Income Per                              
 Share                                       $0.53 - $0.58      
                                                                
Adjustments of Specific Items to                                
  Net Income Per Share for the Third                            
  Quarter 2013:                                                 
  Amortization of intangible assets              (0.06)         
  Stock-based compensation expense               (0.21)         
  Non-cash interest expense                      (0.04)         
  Income tax effect                               0.07          
                                       -------------------------
Total Adjustments                                (0.24)         
                                                                
GAAP Guidance - Net Income Per Share         $0.29 - $0.34      

  
Press Contact:
Ryan Lowry
NetApp
(408) 822-7544
ryanl@netapp.com 
Investor Contact:
Kris Newton
NetApp
(408) 822-3312
kris.newton@netapp.com 
 
 
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