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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Akamai Technologies Inc | NASDAQ:AKAM | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
-2.88 | -2.85% | 98.0144 | 98.30 | 100.00 | 101.01 | 97.71 | 101.01 | 1,941,317 | 23:22:29 |
þ
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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04-3432319
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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Title of each class
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Name of each exchange on which registered
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Common Stock, $.01 par value
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NASDAQ Global Select Market
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Large accelerated filer
þ
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Accelerated filer
o
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Non-accelerated filer
o
(Do not check if smaller reporting company)
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Smaller reporting company
o
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PART I
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Item 1.
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Item 1A.
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Item 1B.
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Item 2.
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Item 3.
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Item 4.
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PART II
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Item 5.
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Item 6.
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Item 7.
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Item 7A.
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Item 8.
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Item 9.
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Item 9A.
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Item 9B.
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PART III
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Item 10.
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Item 11.
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Item 12.
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Item 13.
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Item 14.
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PART IV
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Item 15.
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Item 16.
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•
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provide consumers with superior online experiences when they access websites and applications from all types of devices from anywhere in the world;
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•
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handle transactions securely and protect sensitive information;
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•
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affordably present vibrant and engaging streaming content, including high definition, or HD, video, music and games;
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•
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leverage the growth in the use of mobile devices to reach more consumers and provide dynamic experiences;
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•
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scale and secure the enterprise network; and
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•
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receive data about usage of their websites and applications.
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doing it yourself – building out data centers, coping with the technology changes, and dealing with sudden traffic spikes – is difficult and expensive;
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•
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lack of a coordinated security system to protect against hackers, bots and other malefactors that want to steal assets and disrupt the functioning of the web;
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•
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mobile networks tend to be slower and less reliable than the fixed line Internet and present other challenges;
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traffic congestion at data centers and between networks;
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it can be difficult to understand actual user experiences given myriad devices and locations; and
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coping with “last mile” issues – such as bandwidth constraints between consumers and their Internet access provider.
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identify, absorb and block security threats;
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efficiently route traffic away from Internet trouble spots;
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detect what devices individuals are using and optimize delivery to them;
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provide our customers with business and technical insights into their online operations; and
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•
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understand different types of traffic visiting websites so that customers can deal with them as desired.
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•
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Ion
–
Ion is a situational performance solution that consists of an integrated suite of web delivery, acceleration and optimization technologies that make real-time optimization decisions based on the requirements of the device, network location and browser. Ion is designed to simplify increasingly complex web delivery and enable a faster website experience that is highly available, secure and scalable to meet peak capacity demands.
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•
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Dynamic Site Accelerator
– Dynamic Site Accelerator is designed to help customers experience globally consistent and faster website performance, handling the specific requirements of dynamically-generated content. Our platform continuously pulls and caches fresh site content onto Akamai servers, automatically directs content requests to an optimal server, routes the request via the most reliable path to data centers to retrieve and deliver dynamic interactive content.
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•
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IP Application Accelerator
– IP Application Accelerator is designed to enable enterprises to deliver Internet Protocol-based applications to globally-distributed users quickly, securely and reliably without the expense of building out and supporting dedicated IT infrastructure. These applications include real-time interactive web conferencing and virtualized applications and desktops, in addition to supporting hosting and software as a service, or SaaS, providers in the delivery of remote desktop management, hosted email, archiving and other applications.
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•
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Global Traffic Management – Global Traffic Management is designed to ensure responsiveness to end user requests by leveraging our global load balancing technology. Unlike traditional hardware-based solutions that reside within the data center, our Global Traffic Management service is a fault-tolerant solution that makes intelligent routing decisions
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•
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Image Manager – To help our customers cope with the multitude of devices used by their consumers and varying connection quality, Image Manager automatically optimizes online images for the best combination of size, quality, and file format suited for each image and device and offloads the artistic transformation of derivative assets to the cloud.
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•
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Cloudlets – Cloudlets are applications that provide our customers with self-serviceable controls and capabilities designed to help simplify web operations and improve user experiences. Examples include Visitor Prioritization for managing potentially overloaded applications, Image Converter to improve delivery of images particularly to mobile devices and IP/Geo Access to handle access restrictions.
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•
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Kona Site Defender – Kona Site Defender is a cloud computing security solution that defends against network and application layer distributed denial of service, or DDoS, attacks, web application attacks and direct-to-origin attacks. By leveraging our distributed network and proprietary technology, Akamai can absorb traffic targeted at the application layer, deflect DDoS traffic targeted at the network layer, such as SYN Floods or UDP Floods, and authenticate valid traffic at the network edge.
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•
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Bot Manager – As websites attract users, they also place business information where it can be easily accessed by other entities – often using automated tools known as “bots.” Our Bot Manager offering provides organizations with a flexible framework to better manage the wide array of bots accessing their website every day. It offers the ability to identify bots as they first arrive, categorize different types of bots, and apply the most appropriate management policy for each category.
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•
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Fast DNS – The Domain Name System, or DNS, translates human-readable domain names into numerical IP addresses to enable individuals who type in a website name to reach the desired location on the Internet. Our Fast DNS offering is a DNS resolution solution that is designed to quickly and dependably direct individuals to our customers' websites. Importantly, we have architected this service to protect against DNS-based DDoS attacks.
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•
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Prolexic Routed
– Prolexic Routed is designed to protect web- and IP-based applications in data centers from the threat of DDoS attacks by preventing attacks before they reach the data center. It provides protection against high-bandwidth, sustained web attacks as well as potentially crippling DDoS attacks that target specific applications and services.
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•
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Client Reputation
– Client Reputation provides an additional layer of protection against DDoS and web application attacks by allowing customers to automatically block requests from IP addresses. Client Reputation leverages advanced algorithms to compute a risk score based on prior behavior as observed over the Akamai network. The algorithms use both legitimate and attack traffic to profile the behavior of attacks, clients and applications. Based on this information, Akamai assigns risk scores to each IP address and allows customers to choose which actions they wish to have Kona Site Defender perform on an IP address with specific risk scores.
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•
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Enterprise Application Access
– Using technology gained through our acquisition of Soha Systems, Inc., this offering enables remote access to applications behind the firewall without providing users access to the entire network without external hardware or software.
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•
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Akamai Cloud Connect – By combining WAN optimization and intelligent caching directly into a Cisco router in enterprise branch locations, Akamai Connect extends the Akamai Intelligent Platform directly into the branch. The
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•
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Aura Licensed CDN – Aura Licensed CDN is a suite of solutions designed to empower network operators to build and run a highly-scalable media content delivery network that efficiently delivers its own content as well as content from Akamai customers and other targeted services, all utilizing a common HTTP caching infrastructure. The Aura Licensed CDN federates with the Akamai Intelligent Platform, providing global delivery of operator content with a single business agreement. The solution also includes HyperCache, a common HTTP caching layer in the network that supports traffic offload and delivery of content, and Request Router, a DNS-based content request router that directs user requests to an optimal available CDN node.
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Aura Managed CDN – Aura Managed CDN is a scalable, turnkey CDN solution designed to provide network operators with CDN capabilities through an infrastructure that is maintained by Akamai. With it, an operator can leverage the same CDN techniques used by Akamai, but on servers that are dedicated to the network operator's services. Operators can deliver multi-screen video services and large objects, plus offer commercial CDN services, relying on Akamai CDN experts and proven technology for content provisioning, delivery and reporting.
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•
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Intelligent DNS Solutions – Our AnswerX offering is an intelligent recursive DNS platform built for effective management of DNS traffic. To help make web services fast, safe and uniquely personal for subscribers, AnswerX manages subscriber preferences (e.g., opt-in or opt-out), tracks popular destinations and maintains lists of typo squatters (website addresses that are similar to popular ones but with misspelled names) and phishing domains.
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•
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Adaptive Delivery – We provide adaptive delivery solutions for streaming video content that are designed to cope with variable connection speeds, different devices and disparate locations around the world.
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Download Delivery – Our download delivery offerings provide accelerated distribution for large file downloads, including games, progressive media (video and audio) files, documents and other file-based content.
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Infinite Media Acceleration – These media delivery acceleration solutions are designed with the goal to bring broadcast quality TV experiences to broadband.
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Media Services – These services help simplify the preparation of online media with integrated transcoding, digital rights management and content packaging designed to enable our customers to quickly and easily deliver live and on-demand content to multiple types of devices and platforms.
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Media Analytics – We offer a comprehensive suite of analytics tools to monitor online video viewer experiences and the effectiveness of web software downloads, while measuring audience engagement, and quality of service performance. These solutions are designed to provide actionable and relevant metrics to help businesses understand their entire media workflow from ingest to device through four complementary modules: Quality of Service Monitor, Viewer Diagnostics, Audience Analytics and Download Analytics.
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•
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NetStorage – NetStorage is a globally-distributed cloud storage solution for our customers' content that offers automatic geographically-dispersed replication that is designed for resiliency, high availability and real time performance optimization.
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•
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the performance and reliability of our services;
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return on investment in terms of cost savings and new revenue opportunities for our customers;
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reduced infrastructure complexity;
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sophistication and functionality of our offerings;
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scalability;
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security;
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ease of implementation and use of service;
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customer support; and
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price.
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the pace of introduction of over-the-top (often referred to as OTT) video delivery initiatives by our customers;
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the popularity of our customers' streaming offerings as compared to those offered by companies that do not use our services;
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customers, particularly large Internet platform companies, utilizing their own data centers and implementing delivery approaches that limit or eliminate reliance on third party providers like us; and
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macro-economic market and industry pressures.
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inability to increase sales of our core services and advanced features;
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increased headcount expenses;
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changes in our customers' business models that we do not fully anticipate or that we fail to address adequately; and
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increased reliance by customers on our secure socket layer, or SSL, network which is more expensive to maintain and operate.
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our customers or partners becoming our competitors;
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our network suppliers becoming partners with us or, conversely, no longer seeking to work with us;
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our working more closely with hardware providers;
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large technology companies that previously did not appear to show interest in the markets we seek to address entering into those markets as competitors; and
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needing to expand into new lines of business or to change or abandon existing strategies.
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develop superior products or services, gain greater market acceptance, and expand their service offerings more efficiently or more rapidly;
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adopt more aggressive pricing policies and allocate greater resources to the promotion, marketing, and sales of their services; and
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attract customers by offering less sophisticated versions of services than we provide at lower prices than those we charge;
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respond more quickly than we can to new or emerging technologies, changes in customer requirements and market and industry developments, resulting in superior offerings.
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pursue a "do-it-yourself" approach by putting in place equipment, software and other technology solutions for content and application delivery within their internal systems;
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lead to the dissemination of proprietary information or sensitive, personal or confidential data about us, our employees or our customers;
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threaten our ability to provide our customers with our services;
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generate negative publicity about us;
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result in litigation and increased legal liability or fines; or
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lead to governmental inquiry or oversight.
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•
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difficulty integrating the operations and personnel of acquired companies;
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potential disruption of our ongoing business;
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potential distraction of management;
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diversion of business resources from core operations;
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expenses related to the transactions;
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failure to realize synergies or other expected benefits;
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•
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increased accounting charges such as impairment of goodwill or intangible assets, amortization of intangible assets acquired and a reduction in the useful lives of intangible assets acquired; and
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potential unknown liabilities associated with acquired businesses.
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•
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quarterly variations in operating results;
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announcements by our customers related to their businesses that could be viewed as impacting their usage of our solutions;
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•
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market speculation about whether we are a takeover target;
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activism by any single large stockholder or combination of stockholders;
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changes in financial estimates and recommendations by securities analysts;
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failure to meet the expectations of securities analysts;
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purchases or sales of our stock by our officers and directors;
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macro-economic factors;
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repurchases of shares of our common stock;
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successful cyber-attacks against our network or systems;
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performance by other companies in our industry; and
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geopolitical conditions such as acts of terrorism or military conflicts.
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currency exchange rate fluctuations and limitations on the repatriation and investment of funds;
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difficulties in transferring funds from, or converting currencies in, certain countries;
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regulations related to security requirements, data localization or restricting content that could pose risks to our intellectual property, increase the cost of doing business in a country or create other disadvantages to our business;
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interpretations of laws or regulations that would subject us to regulatory supervision or, in the alternative, require us to exit a country, which could have a negative impact on the quality of our services or our results of operations;
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uncertainty regarding liability for content or services;
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adjusting to different employee/employer relationships and different regulations governing such relationships;
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corporate and personal liability for alleged or actual violations of laws and regulations;
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difficulty in staffing, developing and managing foreign operations as a result of distance, language and cultural differences;
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reliance on channel partners over which we have limited control or influence on a day-to-day basis; and
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potentially adverse tax consequences.
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cease selling, incorporating or using features, functionalities, products or services that incorporate the challenged intellectual property;
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pay substantial damages and incur significant litigation expenses;
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obtain a license from the holder of the infringed intellectual property right, which license may not be available on reasonable terms or at all; or
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redesign products or services.
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a classified board structure so that only approximately one-third of our Board of Directors is up for re-election in any one year;
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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;
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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; and
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2016
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2015
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||||||||||||
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High
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Low
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High
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Low
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||||||||
First quarter
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$
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57.05
|
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$
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39.43
|
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$
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73.53
|
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$
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56.85
|
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Second quarter
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$
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57.50
|
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$
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48.88
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$
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78.44
|
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$
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69.13
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Third quarter
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$
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58.47
|
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$
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47.80
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$
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76.98
|
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$
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63.14
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Fourth quarter
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$
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71.04
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$
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52.63
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$
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76.39
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$
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50.56
|
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Period
(1)
|
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Total Number of Shares Purchased
(2)
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Average Price Paid per Share
(3)
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Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
(4)
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Approximate Dollar Value of Shares that May Yet be Purchased Under Plans or Programs
(4)
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||||||
October 1, 2016 – October 31, 2016
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558,379
|
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$
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55.38
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558,379
|
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$
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742,507
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November 1, 2016 – November 30, 2016
|
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352,708
|
|
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66.84
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352,708
|
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718,932
|
|
||
December 1, 2016 – December 31, 2016
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368,440
|
|
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66.31
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368,440
|
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694,501
|
|
||
Total
|
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1,279,527
|
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$
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61.68
|
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1,279,527
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$
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694,501
|
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(1)
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Information is based on settlement dates of repurchase transactions.
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(2)
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Consists of shares of our common stock, par value $0.01 per share. All repurchases were made pursuant to a previously-announced program.
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(3)
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Includes commissions paid.
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(4)
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In October 2013, the Board of Directors authorized a $750.0 million share repurchase program, effective from October 2013 through December 2016. In February 2016, the Board of Directors authorized a $1.0 billion share repurchase program that superseded the October 2013 repurchase program and is effective from February 2016 through December 2018.
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Year ended December 31,
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2016
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2015
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2014
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2013
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2012
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||||||||||
Revenue
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$
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2,340,049
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|
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$
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2,197,448
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$
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1,963,874
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$
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1,577,922
|
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$
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1,373,947
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Total costs and operating expenses
|
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1,880,455
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1,731,298
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1,474,355
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1,163,954
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1,059,460
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|||||
Income from operations
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459,594
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466,150
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489,519
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413,968
|
|
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314,487
|
|
|||||
Net income
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316,132
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321,406
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333,948
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|
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293,487
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|
203,989
|
|
|||||
Basic net income per share
|
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1.81
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|
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1.80
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|
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1.87
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|
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1.65
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1.15
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|||||
Diluted net income per share
|
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1.79
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|
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1.78
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|
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1.84
|
|
|
1.61
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|
|
1.12
|
|
|||||
Cash, cash equivalents and marketable securities
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1,616,329
|
|
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1,524,235
|
|
|
1,628,284
|
|
|
1,246,922
|
|
|
1,095,240
|
|
|||||
Total assets
|
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4,373,146
|
|
|
4,181,684
|
|
|
4,001,546
|
|
|
2,957,685
|
|
|
2,600,627
|
|
|||||
Convertible senior notes
|
|
640,087
|
|
|
624,288
|
|
|
604,851
|
|
|
—
|
|
|
—
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|
|||||
Other long-term liabilities
|
|
134,101
|
|
|
110,319
|
|
|
117,349
|
|
|
65,088
|
|
|
51,929
|
|
|||||
Total stockholders’ equity
|
|
3,224,370
|
|
|
3,120,878
|
|
|
2,945,335
|
|
|
2,629,431
|
|
|
2,345,754
|
|
•
|
During the years presented in the table above, various acquisitions occurred, the results of which are presented prospectively from the date of acquisition. See Note 8 to our consolidated financial statements included elsewhere in this annual report on Form 10-K for more details regarding these acquisitions.
|
•
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Effective January 1, 2013, we increased the expected average useful lives of our network assets, primarily servers, from three to four years to reflect software and hardware related initiatives to manage our global network more efficiently. For the years ended December 31, 2016, 2015, 2014 and 2013, this change decreased depreciation expense on network assets as compared to the year ended December 31, 2012. The change increased net income and both basic and diluted net income per share for the years ended December 31, 2016, 2015, 2014 and 2013 as compared to the year ended December 31, 2012.
|
•
|
Increased sales of our security solutions have made a significant contribution to revenue growth, and we expect to continue our focus on security solutions in the future.
|
•
|
We have experienced increases in the amount of traffic delivered for customers that use our solutions for video, gaming, social media and software downloads, contributing to an increase in our revenue. However, from the second half of 2015 onward, our traffic growth rates have moderated, primarily due to the “do-it-yourself” efforts by some of our customers that are among the large Internet platform companies: Amazon, Apple, Facebook, Google, Microsoft and Netflix. We refer to these companies as our Internet Platform Customers. Some of these customers have elected to develop and rely on their internal infrastructure to deliver more of their media content themselves rather than use our services. As a result, we are likely to continue experiencing lower revenue from these customers. We have not, however, been experiencing a significant shift to internal infrastructure usage across the remainder of our media services customer base.
|
•
|
We have increased committed recurring revenue from our solutions by increasing sales of incremental services to our existing customers and adding new customers. These increases helped to limit the impact of reductions in usage of our services and contract terminations by certain customers, as well as the effect of price decreases negotiated as part of contract renewals.
|
•
|
The unit prices paid by some of our customers have declined, reflecting the impact of competition. Our revenue would have been higher absent these price declines.
|
•
|
We have experienced variations in certain types of revenue from quarter to quarter. In particular, we experience higher revenue in the fourth quarter of the year for some of our solutions as a result of holiday season activity. We also experience lower revenue in the summer months, particularly in Europe, from both e-commerce and media customers because overall Internet use declines during that time. In addition, we experience quarterly variations in revenue attributable to, among other things, the nature and timing of software and gaming releases by our customers using our software download solutions; whether there are large live sporting or other events that increase the amount of media traffic on our network; and the frequency and timing of purchases of custom services.
|
•
|
Network bandwidth costs represent a significant portion of our cost of revenue. Historically, we have been able to mitigate increases in these costs by reducing our network bandwidth costs per unit and investing in internal-use software development to improve the performance and efficiency of our network. Our total bandwidth costs may increase in the future as a result of expected higher traffic levels and serving more traffic from higher cost regions. We will need to continue to effectively manage our bandwidth costs to maintain current levels of profitability.
|
•
|
Co-location costs are also a significant portion of our cost of revenue. By improving our internal-use software and managing our hardware deployments to enable us to use servers more efficiently, we have been able to manage the growth of co-location costs. We expect to continue to scale our network in the future and will need to continue to effectively manage our co-location costs to maintain current levels of profitability.
|
•
|
Due to the fixed nature of some of our co-location and bandwidth costs over a minimum time period, it may not be possible to quickly reduce those costs. If our revenue growth rate declines, our profitability could decrease.
|
•
|
Payroll and related compensation costs have grown as we have increased headcount to support our revenue growth and strategic initiatives. We increased our headcount by 406 employees during the year ended
December 31, 2016
. During the year ended
December 31, 2015
, we increased our headcount by 979 employees. We expect to continue to hire additional employees, both domestically and internationally, in support of our strategic initiatives.
|
|
2016
|
|
2015
|
|
2014
|
|||
Revenue
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
Costs and operating expenses:
|
|
|
|
|
|
|||
Cost of revenue (exclusive of amortization of acquired intangible assets shown below)
|
34.6
|
|
|
33.0
|
|
|
31.1
|
|
Research and development
|
7.2
|
|
|
6.8
|
|
|
6.4
|
|
Sales and marketing
|
18.2
|
|
|
20.1
|
|
|
19.3
|
|
General and administrative
|
18.8
|
|
|
17.7
|
|
|
16.6
|
|
Amortization of acquired intangible assets
|
1.1
|
|
|
1.2
|
|
|
1.6
|
|
Restructuring charges
|
0.4
|
|
|
—
|
|
|
0.1
|
|
Total costs and operating expenses
|
80.3
|
|
|
78.8
|
|
|
75.1
|
|
Income from operations
|
19.7
|
|
|
21.2
|
|
|
24.9
|
|
Interest income
|
0.6
|
|
|
0.5
|
|
|
0.4
|
|
Interest expense
|
(0.8
|
)
|
|
(0.8
|
)
|
|
(0.8
|
)
|
Other income (expense), net
|
0.2
|
|
|
(0.1
|
)
|
|
(0.1
|
)
|
Income before provision for income taxes
|
19.7
|
|
|
20.8
|
|
|
24.4
|
|
Provision for income taxes
|
6.1
|
|
|
6.2
|
|
|
7.4
|
|
Net income
|
13.6
|
%
|
|
14.6
|
%
|
|
17.0
|
%
|
|
For the Years Ended December 31,
|
|
For the Years Ended December 31,
|
||||||||||||||||||||||||
|
2016
|
|
2015
|
|
% Change
|
|
% Change at Constant Currency
|
|
2015
|
|
2014
|
|
% Change
|
|
% Change at Constant Currency
|
||||||||||||
Revenue
|
$
|
2,340,049
|
|
|
$
|
2,197,448
|
|
|
6.5
|
%
|
|
6.6
|
%
|
|
$
|
2,197,448
|
|
|
$
|
1,963,874
|
|
|
11.9
|
%
|
|
15.5
|
%
|
|
For the Years Ended December 31,
|
|
For the Years Ended December 31,
|
||||||||||||||||||||||||
|
2016
|
|
2015
|
|
% Change
|
|
% Change at Constant Currency
|
|
2015
|
|
2014
|
|
% Change
|
|
% Change at Constant Currency
|
||||||||||||
Performance and Security Solutions
|
$
|
1,355,030
|
|
|
$
|
1,158,281
|
|
|
17.0
|
%
|
|
17.3
|
%
|
|
$
|
1,158,281
|
|
|
$
|
1,003,573
|
|
|
15.4
|
%
|
|
19.0
|
%
|
Media Delivery Solutions
|
787,179
|
|
|
868,820
|
|
|
(9.4
|
)
|
|
(9.6
|
)
|
|
868,820
|
|
|
813,066
|
|
|
6.9
|
|
|
10.5
|
|
||||
Services and Support Solutions
|
197,840
|
|
|
170,347
|
|
|
16.1
|
|
|
16.0
|
|
|
170,347
|
|
|
147,235
|
|
|
15.7
|
|
|
19.8
|
|
||||
Total revenue
|
$
|
2,340,049
|
|
|
$
|
2,197,448
|
|
|
6.5
|
%
|
|
6.6
|
%
|
|
$
|
2,197,448
|
|
|
$
|
1,963,874
|
|
|
11.9
|
%
|
|
15.5
|
%
|
|
For the Years Ended December 31,
|
|
For the Years Ended December 31,
|
||||||||||||||||||||||||
|
2016
|
|
2015
|
|
% Change
|
|
% Change at Constant Currency
|
|
2015
|
|
2014
|
|
% Change
|
|
% Change at Constant Currency
|
||||||||||||
Media Division
|
$
|
1,165,281
|
|
|
$
|
1,187,732
|
|
|
(1.9
|
)%
|
|
(1.8
|
)%
|
|
$
|
1,187,732
|
|
|
$
|
1,109,781
|
|
|
7.0
|
%
|
|
10.3
|
%
|
Web Division
|
1,120,001
|
|
|
968,584
|
|
|
15.6
|
|
|
15.7
|
|
|
968,584
|
|
|
824,302
|
|
|
17.5
|
|
|
21.7
|
|
||||
Enterprise and Carrier Division
|
54,767
|
|
|
41,132
|
|
|
33.1
|
|
|
33.1
|
|
|
41,132
|
|
|
29,791
|
|
|
38.1
|
|
|
39.4
|
|
||||
Total revenue
|
$
|
2,340,049
|
|
|
$
|
2,197,448
|
|
|
6.5
|
%
|
|
6.6
|
%
|
|
$
|
2,197,448
|
|
|
$
|
1,963,874
|
|
|
11.9
|
%
|
|
15.5
|
%
|
|
For the Years Ended December 31,
|
|
For the Years Ended December 31,
|
||||||||||||||||||||||||
|
2016
|
|
2015
|
|
% Change
|
|
% Change at Constant Currency
|
|
2015
|
|
2014
|
|
% Change
|
|
% Change at Constant Currency
|
||||||||||||
U.S.
|
$
|
1,620,021
|
|
|
$
|
1,604,492
|
|
|
1.0
|
%
|
|
1.0
|
%
|
|
$
|
1,604,492
|
|
|
$
|
1,429,063
|
|
|
12.3
|
%
|
|
12.3
|
%
|
International
|
720,028
|
|
|
592,956
|
|
|
21.4
|
|
|
21.6
|
|
|
592,956
|
|
|
534,811
|
|
|
10.9
|
|
|
24.3
|
|
||||
Total revenue
|
$
|
2,340,049
|
|
|
$
|
2,197,448
|
|
|
6.5
|
%
|
|
6.6
|
%
|
|
$
|
2,197,448
|
|
|
$
|
1,963,874
|
|
|
11.9
|
%
|
|
15.5
|
%
|
|
For the Years Ended December 31,
|
|
For the Years Ended December 31,
|
||||||||||||||||||
|
2016
|
|
2015
|
|
% Change
|
|
2015
|
|
2014
|
|
% Change
|
||||||||||
Bandwidth fees
|
$
|
168,202
|
|
|
$
|
150,607
|
|
|
11.7
|
%
|
|
$
|
150,607
|
|
|
$
|
124,470
|
|
|
21.0
|
%
|
Co-location fees
|
129,904
|
|
|
125,983
|
|
|
3.1
|
|
|
125,983
|
|
|
113,661
|
|
|
10.8
|
|
||||
Network build-out and supporting services
|
61,320
|
|
|
58,207
|
|
|
5.3
|
|
|
58,207
|
|
|
42,114
|
|
|
38.2
|
|
||||
Payroll and related costs
|
189,409
|
|
|
158,742
|
|
|
19.3
|
|
|
158,742
|
|
|
143,468
|
|
|
10.6
|
|
||||
Stock-based compensation, including amortization of prior capitalized amounts
|
31,145
|
|
|
26,222
|
|
|
18.8
|
|
|
26,222
|
|
|
21,866
|
|
|
19.9
|
|
||||
Depreciation of network equipment
|
140,777
|
|
|
130,098
|
|
|
8.2
|
|
|
130,098
|
|
|
107,250
|
|
|
21.3
|
|
||||
Amortization of internal-use software
|
88,244
|
|
|
75,761
|
|
|
16.5
|
|
|
75,761
|
|
|
58,114
|
|
|
30.4
|
|
||||
Total cost of revenue
|
$
|
809,001
|
|
|
$
|
725,620
|
|
|
11.5
|
%
|
|
$
|
725,620
|
|
|
$
|
610,943
|
|
|
18.8
|
%
|
As a percentage of revenue
|
34.6
|
%
|
|
33.0
|
%
|
|
|
|
33.0
|
%
|
|
31.1
|
%
|
|
|
•
|
amounts paid to network providers for bandwidth fees to support the increase in traffic served on our network and for traffic served from higher cost regions;
|
•
|
payroll and related costs, as well as stock-based compensation, due to more hiring in our services to support revenue growth; and
|
•
|
depreciation of network equipment and amortization of internal-use software as we continued to invest in our infrastructure and release internally-developed software onto our network.
|
•
|
amounts paid to network providers for bandwidth fees to support the increase in traffic served on our network;
|
•
|
amounts paid for network build-out and supporting services related to the increase in server deployments and investments in network expansion;
|
•
|
payroll and related costs of service personnel due to more hiring in our services and network operations organizations to support revenue growth; and
|
•
|
depreciation of network equipment and amortization of internal-use software as we continued to invest in our infrastructure and release internally developed software onto our network.
|
|
For the Years Ended December 31,
|
|
For the Years Ended December 31,
|
||||||||||||||||||
|
2016
|
|
2015
|
|
% Change
|
|
2015
|
|
2014
|
|
% Change
|
||||||||||
Payroll and related costs
|
$
|
253,351
|
|
|
$
|
220,198
|
|
|
15.1
|
%
|
|
$
|
220,198
|
|
|
$
|
188,509
|
|
|
16.8
|
%
|
Stock-based compensation
|
29,739
|
|
|
23,926
|
|
|
24.3
|
|
|
23,926
|
|
|
19,351
|
|
|
23.6
|
|
||||
Capitalized salaries and related costs
|
(122,084
|
)
|
|
(103,352
|
)
|
|
18.1
|
|
|
(103,352
|
)
|
|
(91,106
|
)
|
|
13.4
|
|
||||
Other expenses
|
6,622
|
|
|
7,819
|
|
|
(15.3
|
)
|
|
7,819
|
|
|
8,532
|
|
|
(8.4
|
)
|
||||
Total research and development
|
$
|
167,628
|
|
|
$
|
148,591
|
|
|
12.8
|
%
|
|
$
|
148,591
|
|
|
$
|
125,286
|
|
|
18.6
|
%
|
As a percentage of revenue
|
7.2
|
%
|
|
6.8
|
%
|
|
|
|
6.8
|
%
|
|
6.4
|
%
|
|
|
|
For the Years Ended December 31,
|
|
For the Years Ended December 31,
|
||||||||||||||||||
|
2016
|
|
2015
|
|
% Change
|
|
2015
|
|
2014
|
|
% Change
|
||||||||||
Payroll and related costs
|
$
|
309,181
|
|
|
$
|
316,845
|
|
|
(2.4
|
)%
|
|
$
|
316,845
|
|
|
$
|
264,788
|
|
|
19.7
|
%
|
Stock-based compensation
|
55,407
|
|
|
53,542
|
|
|
3.5
|
|
|
53,542
|
|
|
47,571
|
|
|
12.6
|
|
||||
Marketing programs and related costs
|
36,904
|
|
|
43,990
|
|
|
(16.1
|
)
|
|
43,990
|
|
|
35,833
|
|
|
22.8
|
|
||||
Other expenses
|
25,475
|
|
|
26,611
|
|
|
(4.3
|
)
|
|
26,611
|
|
|
30,843
|
|
|
(13.7
|
)
|
||||
Total sales and marketing
|
$
|
426,967
|
|
|
$
|
440,988
|
|
|
(3.2
|
)%
|
|
$
|
440,988
|
|
|
$
|
379,035
|
|
|
16.3
|
%
|
As a percentage of revenue
|
18.2
|
%
|
|
20.1
|
%
|
|
|
|
20.1
|
%
|
|
19.3
|
%
|
|
|
|
For the Years Ended December 31,
|
|
For the Years Ended December 31,
|
||||||||||||||||||
|
2016
|
|
2015
|
|
% Change
|
|
2015
|
|
2014
|
|
% Change
|
||||||||||
Payroll and related costs
|
$
|
163,348
|
|
|
$
|
161,660
|
|
|
1.0
|
%
|
|
$
|
161,660
|
|
|
$
|
146,373
|
|
|
10.4
|
%
|
Stock-based compensation
|
41,073
|
|
|
35,062
|
|
|
17.1
|
|
|
35,062
|
|
|
33,151
|
|
|
5.8
|
|
||||
Depreciation and amortization
|
65,780
|
|
|
54,562
|
|
|
20.6
|
|
|
54,562
|
|
|
40,053
|
|
|
36.2
|
|
||||
Facilities-related costs
|
72,549
|
|
|
64,302
|
|
|
12.8
|
|
|
64,302
|
|
|
52,684
|
|
|
22.1
|
|
||||
Provision for doubtful accounts
|
1,235
|
|
|
1,717
|
|
|
(28.1
|
)
|
|
1,717
|
|
|
1,229
|
|
|
39.7
|
|
||||
Acquisition-related costs
|
1,028
|
|
|
1,756
|
|
|
(41.5
|
)
|
|
1,756
|
|
|
3,911
|
|
|
(55.1
|
)
|
||||
License of patent
|
(8,577
|
)
|
|
—
|
|
|
(100.0
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Professional fees and other expenses
|
103,480
|
|
|
69,206
|
|
|
49.5
|
|
|
69,206
|
|
|
48,444
|
|
|
42.9
|
|
||||
Total general and administrative
|
$
|
439,916
|
|
|
$
|
388,265
|
|
|
13.3
|
%
|
|
$
|
388,265
|
|
|
$
|
325,845
|
|
|
19.2
|
%
|
As a percentage of revenue
|
18.8
|
%
|
|
17.7
|
%
|
|
|
|
17.7
|
%
|
|
16.6
|
%
|
|
|
•
|
legal and other professional fees due to ongoing litigation;
|
•
|
expansion of company infrastructure throughout 2015 and 2016 to support investments in engineering, go-to market
|
•
|
stock-based compensation as a result of increased headcount and the impact that changing estimates have on our
|
•
|
expansion of company infrastructure throughout 2015 to support investments in engineering, go-to market
|
•
|
increases in the number of software-as-a-service, or SaaS, solutions that we use, as compared to 2014, which contributed to the increase in professional fees and other expenses, along with increases in legal and other professional consulting fees.
|
|
For the Years Ended December 31,
|
|
For the Years Ended December 31,
|
||||||||||||||||||
(in thousands)
|
2016
|
|
2015
|
|
% Change
|
|
2015
|
|
2014
|
|
% Change
|
||||||||||
Amortization of acquired intangible assets
|
$
|
26,642
|
|
|
$
|
27,067
|
|
|
(1.6
|
)%
|
|
$
|
27,067
|
|
|
$
|
32,057
|
|
|
(15.6
|
)%
|
As a percentage of revenue
|
1.1
|
%
|
|
1.2
|
%
|
|
|
|
1.2
|
%
|
|
1.6
|
%
|
|
|
|
For the Years Ended December 31,
|
|
For the Years Ended December 31,
|
||||||||||||||||||
(in thousands)
|
2016
|
|
2015
|
|
% Change
|
|
2015
|
|
2014
|
|
% Change
|
||||||||||
Restructuring charges
|
$
|
10,301
|
|
|
$
|
767
|
|
|
1,243.0
|
%
|
|
$
|
767
|
|
|
$
|
1,189
|
|
|
(35.5
|
)%
|
As a percentage of revenue
|
0.4
|
%
|
|
—
|
%
|
|
|
|
—
|
%
|
|
0.1
|
%
|
|
|
|
For the Years Ended December 31,
|
|
For the Years Ended December 31,
|
||||||||||||||||||
(in thousands)
|
2016
|
|
2015
|
|
% Change
|
|
2015
|
|
2014
|
|
% Change
|
||||||||||
Interest income
|
$
|
14,702
|
|
|
$
|
11,200
|
|
|
31.3
|
%
|
|
$
|
11,200
|
|
|
$
|
7,680
|
|
|
45.8
|
%
|
As a percentage of revenue
|
0.6
|
%
|
|
0.5
|
%
|
|
|
|
0.5
|
%
|
|
0.4
|
%
|
|
|
||||||
Interest expense
|
$
|
(18,638
|
)
|
|
$
|
(18,525
|
)
|
|
0.6
|
%
|
|
$
|
(18,525
|
)
|
|
$
|
(15,463
|
)
|
|
19.8
|
%
|
As a percentage of revenue
|
(0.8
|
)%
|
|
(0.8
|
)%
|
|
|
|
(0.8
|
)%
|
|
(0.8
|
)%
|
|
|
||||||
Other income (expense), net
|
$
|
3,788
|
|
|
$
|
(2,201
|
)
|
|
100.0
|
%
|
|
$
|
(2,201
|
)
|
|
$
|
(1,960
|
)
|
|
12.3
|
%
|
As a percentage of revenue
|
0.2
|
%
|
|
(0.1
|
)%
|
|
|
|
(0.1
|
)%
|
|
(0.1
|
)%
|
|
|
|
For the Years Ended December 31,
|
|
For the Years Ended December 31,
|
||||||||||||||||||
(in thousands)
|
2016
|
|
2015
|
|
% Change
|
|
2015
|
|
2014
|
|
% Change
|
||||||||||
Provision for income taxes
|
$
|
143,314
|
|
|
$
|
135,218
|
|
|
6.0
|
%
|
|
$
|
135,218
|
|
|
$
|
145,828
|
|
|
(7.3
|
)%
|
As a percentage of revenue
|
6.1
|
%
|
|
6.2
|
%
|
|
|
|
6.2
|
%
|
|
7.4
|
%
|
|
|
||||||
Effective income tax rate
|
31.2
|
%
|
|
29.6
|
%
|
|
|
|
29.6
|
%
|
|
30.4
|
%
|
|
|
•
|
Amortization of acquired intangible assets
– We have incurred amortization of intangible assets, included in our GAAP financial statements, related to various acquisitions we have made. The amount of an acquisition's purchase price allocated to intangible assets and term of its related amortization can vary significantly and are unique to each acquisition; therefore, we exclude amortization of acquired intangible assets from our non-GAAP financial measures to provide investors with a consistent basis for comparing pre- and post-acquisition operating results.
|
•
|
Stock-based compensation and amortization of capitalized stock-based compensation
– Although stock-based compensation is an important aspect of the compensation paid to our employees, the grant date fair value varies based on the stock price at the time of grant, varying valuation methodologies, subjective assumptions and the variety of award types. This makes the comparison of our current financial results to previous and future periods difficult to evaluate; therefore, we believe it is useful to exclude stock-based compensation and amortization of capitalized stock-based compensation from our non-GAAP financial measures in order to highlight the performance of our core business and to be consistent with the way many investors evaluate our performance and compare our operating results to peer companies.
|
•
|
Acquisition-related costs
– Acquisition-related costs include transaction fees, advisory fees, due diligence costs and other direct costs associated with strategic activities. In addition, subsequent adjustments to our initial estimated amounts of contingent consideration and indemnification associated with specific acquisitions are included within acquisition-related costs. These amounts are impacted by the timing and size of the acquisitions. We exclude acquisition-related costs from our non-GAAP financial measures to provide a useful comparison of our operating results to prior periods and to our peer companies because such amounts vary significantly based on the magnitude of our acquisition transactions.
|
•
|
Restructuring charges
– We have incurred restructuring charges that are included in our GAAP financial statements, primarily related to workforce reductions and estimated costs of exiting facility lease commitments. We exclude these items from our non-GAAP financial measures when evaluating our continuing business performance as such items vary significantly based on the magnitude of the restructuring action and do not reflect expected future operating expenses. In addition, these charges do not necessarily provide meaningful insight into the fundamentals of current or historical operations of our business.
|
•
|
Benefit from adoption of software development activities
– In 2014, we recognized a benefit to non-income related tax expense associated with the adoption of software development activities. We exclude this item from our non-GAAP financial measures because transactions of this nature occur infrequently and are not considered part of our core business operations.
|
•
|
Amortization of debt discount and issuance costs and amortization of capitalized interest expense
– In February 2014, we issued $690 million of convertible senior notes due 2019 with a coupon interest rate of 0%. The imputed interest rate of the convertible senior notes was approximately 3.2%. This is a result of the debt discount recorded for the conversion feature that is required to be separately accounted for as equity under GAAP, thereby reducing the carrying value of the convertible debt instrument. The debt discount is amortized as interest expense together with the issuance costs of the debt. All of our interest expense is comprised of these non-cash components and is excluded from management's assessment of our operating performance because management believes the non-cash expense is not representative of ongoing operating performance.
|
•
|
Gains and losses on investments
– We have recorded gains and losses from the disposition and impairment of certain investments. We believe excluding these amounts from our non-GAAP financial measures is useful to investors as the types of events giving rise to them occur infrequently and are not representative of our core business operations and ongoing operating performance.
|
•
|
Legal matter costs
– We have incurred losses from the settlement of legal matters and costs with respect to our internal U.S. Foreign Corrupt Practices Act investigation in addition to the disgorgement we were required to pay to resolve it. We believe excluding these amounts from our non-GAAP financial measures is useful to investors as the types of events giving rise to them are not representative of our core business operations.
|
•
|
Income tax effect of non-GAAP adjustments and certain discrete tax items
– The non-GAAP adjustments described above are reported on a pre-tax basis. The income tax effect of non-GAAP adjustments is the difference between GAAP and non-GAAP income tax expense. Non-GAAP income tax expense is computed on non-GAAP pre-tax income (GAAP pre-tax income adjusted for non-GAAP adjustments) and excludes certain discrete tax items (such as recording or releasing of valuation allowances), if any. We believe that applying the non-GAAP adjustments and their related income tax effect allows us to highlight income attributable to our core operations.
|
|
2016
|
|
2015
|
|
2014
|
||||||
Income from operations
|
$
|
459,594
|
|
|
$
|
466,150
|
|
|
$
|
489,519
|
|
Amortization of acquired intangible assets
|
26,642
|
|
|
27,067
|
|
|
32,057
|
|
|||
Stock-based compensation
|
144,506
|
|
|
126,677
|
|
|
111,996
|
|
|||
Amortization of capitalized stock-based compensation and capitalized interest expense
|
15,439
|
|
|
13,618
|
|
|
10,506
|
|
|||
Restructuring charges
|
10,301
|
|
|
767
|
|
|
1,189
|
|
|||
Acquisition-related costs
|
1,064
|
|
|
865
|
|
|
4,807
|
|
|||
Legal matter costs
|
890
|
|
|
3,291
|
|
|
285
|
|
|||
Benefit from adoption of software development activities
|
—
|
|
|
—
|
|
|
(2,670
|
)
|
|||
Non-GAAP income from operations
|
$
|
658,436
|
|
|
$
|
638,435
|
|
|
$
|
647,689
|
|
|
|
|
|
|
|
||||||
GAAP operating margin
|
20
|
%
|
|
21
|
%
|
|
25
|
%
|
|||
Non-GAAP operating margin
|
28
|
%
|
|
29
|
%
|
|
33
|
%
|
|
2016
|
|
2015
|
|
2014
|
||||||
Net income
|
$
|
316,132
|
|
|
$
|
321,406
|
|
|
$
|
333,948
|
|
Amortization of acquired intangible assets
|
26,642
|
|
|
27,067
|
|
|
32,057
|
|
|||
Stock-based compensation
|
144,506
|
|
|
126,677
|
|
|
111,996
|
|
|||
Amortization of capitalized stock-based compensation and capitalized interest expense
|
15,439
|
|
|
13,618
|
|
|
10,506
|
|
|||
Restructuring charges
|
10,301
|
|
|
767
|
|
|
1,189
|
|
|||
Acquisition-related costs
|
1,064
|
|
|
865
|
|
|
4,807
|
|
|||
Legal matter costs
|
890
|
|
|
3,291
|
|
|
285
|
|
|||
Benefit from adoption of software development activities
|
—
|
|
|
—
|
|
|
(2,670
|
)
|
|||
Amortization of debt discount and issuance costs
|
18,638
|
|
|
18,525
|
|
|
15,463
|
|
|||
(Gain) loss on investments
|
(4,807
|
)
|
|
25
|
|
|
443
|
|
|||
Income tax effect of above non-GAAP adjustments and certain discrete tax items
|
(52,661
|
)
|
|
(58,309
|
)
|
|
(59,202
|
)
|
|||
Non-GAAP net income
|
$
|
476,144
|
|
|
$
|
453,932
|
|
|
$
|
448,822
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
GAAP net income per diluted share
|
$
|
1.79
|
|
|
$
|
1.78
|
|
|
1.84
|
|
|
Amortization of acquired intangible assets
|
0.14
|
|
|
0.16
|
|
|
0.17
|
|
|||
Stock-based compensation
|
0.82
|
|
|
0.70
|
|
|
0.62
|
|
|||
Amortization of capitalized stock-based compensation and capitalized interest expense
|
0.09
|
|
|
0.08
|
|
|
0.06
|
|
|||
Restructuring charges
|
0.06
|
|
|
—
|
|
|
0.01
|
|
|||
Acquisition-related costs
|
0.01
|
|
|
—
|
|
|
0.03
|
|
|||
Legal matter costs
|
0.01
|
|
|
0.02
|
|
|
—
|
|
|||
Benefit from adoption of software development activities
|
—
|
|
|
—
|
|
|
(0.01
|
)
|
|||
Amortization of debt discount and issuance costs
|
0.11
|
|
|
0.10
|
|
|
0.09
|
|
|||
(Gain) loss on investments
|
(0.03
|
)
|
|
—
|
|
|
—
|
|
|||
Income tax effect of above non-GAAP adjustments and certain discrete tax items
|
(0.30
|
)
|
|
(0.32
|
)
|
|
(0.33
|
)
|
|||
Non-GAAP net income per diluted share
|
$
|
2.70
|
|
|
$
|
2.52
|
|
|
$
|
2.48
|
|
|
|
|
|
|
|
||||||
Shares used in per share calculations
|
176,215
|
|
|
180,415
|
|
|
181,186
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
Net income
|
$
|
316,132
|
|
|
$
|
321,406
|
|
|
$
|
333,948
|
|
Amortization of acquired intangible assets
|
26,642
|
|
|
27,067
|
|
|
32,057
|
|
|||
Stock-based compensation
|
144,506
|
|
|
126,677
|
|
|
111,996
|
|
|||
Amortization of capitalized stock-based compensation and capitalized interest expense
|
15,439
|
|
|
13,618
|
|
|
10,506
|
|
|||
Restructuring charges
|
10,301
|
|
|
767
|
|
|
1,189
|
|
|||
Acquisition-related costs
|
1,064
|
|
|
865
|
|
|
4,807
|
|
|||
Legal matter costs
|
890
|
|
|
3,291
|
|
|
285
|
|
|||
Benefit from adoption of software development activities
|
—
|
|
|
—
|
|
|
(2,670
|
)
|
|||
Interest income
|
(14,702
|
)
|
|
(11,200
|
)
|
|
(7,680
|
)
|
|||
Amortization of debt discount and issuance costs
|
18,638
|
|
|
18,525
|
|
|
15,463
|
|
|||
Provision for income taxes
|
143,314
|
|
|
135,218
|
|
|
145,828
|
|
|||
Depreciation and amortization
|
292,221
|
|
|
258,878
|
|
|
204,843
|
|
|||
Other (income) expense, net
|
(3,788
|
)
|
|
2,201
|
|
|
1,960
|
|
|||
Adjusted EBITDA
|
$
|
950,657
|
|
|
$
|
897,313
|
|
|
$
|
852,532
|
|
Adjusted EBITDA margin
|
41
|
%
|
|
41
|
%
|
|
43
|
%
|
|
For the Years Ended December 31,
|
||||||||||
(in thousands)
|
2016
|
|
2015
|
|
2014
|
||||||
Net income
|
$
|
316,132
|
|
|
$
|
321,406
|
|
|
$
|
333,948
|
|
Non-cash reconciling items included in net income
|
509,814
|
|
|
425,366
|
|
|
319,312
|
|
|||
Changes in operating assets and liabilities
|
40,352
|
|
|
17,379
|
|
|
4,810
|
|
|||
Net cash flows provided by operating activities
|
$
|
866,298
|
|
|
$
|
764,151
|
|
|
$
|
658,070
|
|
|
For the Years Ended December 31,
|
||||||||||
(in thousands)
|
2016
|
|
2015
|
|
2014
|
||||||
Cash paid for acquired businesses, net of cash acquired
|
$
|
(95,439
|
)
|
|
$
|
(141,147
|
)
|
|
$
|
(386,532
|
)
|
Purchases of property and equipment and capitalization of internal-use software development costs
|
(316,289
|
)
|
|
(444,983
|
)
|
|
(318,627
|
)
|
|||
Net marketable securities activity
|
(58,484
|
)
|
|
153,060
|
|
|
(479,392
|
)
|
|||
Other investing activities
|
782
|
|
|
(2,494
|
)
|
|
5,745
|
|
|||
Net cash used in investing activities
|
$
|
(469,430
|
)
|
|
$
|
(435,564
|
)
|
|
$
|
(1,178,806
|
)
|
|
For the Years Ended December 31,
|
||||||||||
(in thousands)
|
2016
|
|
2015
|
|
2014
|
||||||
Activity related to convertible senior notes
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
655,413
|
|
Activity related to stock-based compensation
|
19,529
|
|
|
36,928
|
|
|
68,698
|
|
|||
Repurchases of common stock
|
(373,794
|
)
|
|
(302,606
|
)
|
|
(268,647
|
)
|
|||
Other financing activities
|
—
|
|
|
(2,050
|
)
|
|
(19,437
|
)
|
|||
Net cash (used in) provided by financing activities
|
$
|
(354,265
|
)
|
|
$
|
(267,728
|
)
|
|
$
|
436,027
|
|
|
Payments Due by Period
|
||||||||||||||||||
|
Total
|
|
Less than
12 Months
|
|
|
12 to 36
Months
|
|
|
36 to 60
Months
|
|
|
More than
60 Months
|
|
||||||
Real estate operating leases
|
$
|
785,426
|
|
|
$
|
53,410
|
|
|
$
|
89,788
|
|
|
$
|
109,140
|
|
|
$
|
533,088
|
|
Bandwidth and co-location agreements
|
126,197
|
|
|
105,451
|
|
|
20,167
|
|
|
579
|
|
|
—
|
|
|||||
Open vendor purchase orders
|
150,631
|
|
|
137,642
|
|
|
12,349
|
|
|
640
|
|
|
—
|
|
|||||
Convertible senior notes
|
690,000
|
|
|
—
|
|
|
690,000
|
|
|
—
|
|
|
—
|
|
|||||
Total contractual obligations
|
$
|
1,752,254
|
|
|
$
|
296,503
|
|
|
$
|
812,304
|
|
|
$
|
110,359
|
|
|
$
|
533,088
|
|
(in thousands, except share data)
|
December 31, 2016
|
|
December 31, 2015
|
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
324,169
|
|
|
$
|
289,473
|
|
Marketable securities
|
512,849
|
|
|
460,088
|
|
||
Accounts receivable, net of reserves of $6,145 and $7,364 at December 31, 2016 and 2015, respectively
|
368,596
|
|
|
380,399
|
|
||
Prepaid expenses and other current assets
|
104,303
|
|
|
123,228
|
|
||
Total current assets
|
1,309,917
|
|
|
1,253,188
|
|
||
Property and equipment, net
|
801,017
|
|
|
753,180
|
|
||
Marketable securities
|
779,311
|
|
|
774,674
|
|
||
Goodwill
|
1,228,503
|
|
|
1,150,244
|
|
||
Acquired intangible assets, net
|
149,463
|
|
|
156,095
|
|
||
Deferred income tax assets
|
8,982
|
|
|
4,700
|
|
||
Other assets
|
95,953
|
|
|
89,603
|
|
||
Total assets
|
$
|
4,373,146
|
|
|
$
|
4,181,684
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
76,120
|
|
|
$
|
61,982
|
|
Accrued expenses
|
238,777
|
|
|
216,166
|
|
||
Deferred revenue
|
52,972
|
|
|
54,154
|
|
||
Other current liabilities
|
6,719
|
|
|
138
|
|
||
Total current liabilities
|
374,588
|
|
|
332,440
|
|
||
Deferred revenue
|
3,758
|
|
|
4,163
|
|
||
Deferred income tax liabilities
|
11,652
|
|
|
12,888
|
|
||
Convertible senior notes
|
640,087
|
|
|
618,047
|
|
||
Other liabilities
|
118,691
|
|
|
93,268
|
|
||
Total liabilities
|
1,148,776
|
|
|
1,060,806
|
|
||
Commitments and contingencies (Note 11)
|
|
|
|
||||
Stockholders’ equity:
|
|
|
|
||||
Preferred stock, $0.01 par value; 5,000,000 shares authorized; 700,000 shares designated as Series A Junior Participating Preferred Stock; no shares issued or outstanding
|
—
|
|
|
—
|
|
||
Common stock, $0.01 par value; 700,000,000 shares authorized; 173,254,797 and 177,212,181 shares issued and outstanding at December 31, 2016 and 2015, respectively
|
1,733
|
|
|
1,772
|
|
||
Additional paid-in capital
|
4,239,588
|
|
|
4,437,420
|
|
||
Accumulated other comprehensive loss
|
(56,222
|
)
|
|
(41,453
|
)
|
||
Accumulated deficit
|
(960,729
|
)
|
|
(1,276,861
|
)
|
||
Total stockholders’ equity
|
3,224,370
|
|
|
3,120,878
|
|
||
Total liabilities and stockholders’ equity
|
$
|
4,373,146
|
|
|
$
|
4,181,684
|
|
(in thousands, except per share data)
|
For the Years Ended December 31,
|
||||||||||
2016
|
|
2015
|
|
2014
|
|||||||
Revenue
|
$
|
2,340,049
|
|
|
$
|
2,197,448
|
|
|
$
|
1,963,874
|
|
Costs and operating expenses:
|
|
|
|
|
|
||||||
Cost of revenue (exclusive of amortization of acquired intangible assets shown below)
|
809,001
|
|
|
725,620
|
|
|
610,943
|
|
|||
Research and development
|
167,628
|
|
|
148,591
|
|
|
125,286
|
|
|||
Sales and marketing
|
426,967
|
|
|
440,988
|
|
|
379,035
|
|
|||
General and administrative
|
439,916
|
|
|
388,265
|
|
|
325,845
|
|
|||
Amortization of acquired intangible assets
|
26,642
|
|
|
27,067
|
|
|
32,057
|
|
|||
Restructuring charges
|
10,301
|
|
|
767
|
|
|
1,189
|
|
|||
Total costs and operating expenses
|
1,880,455
|
|
|
1,731,298
|
|
|
1,474,355
|
|
|||
Income from operations
|
459,594
|
|
|
466,150
|
|
|
489,519
|
|
|||
Interest income
|
14,702
|
|
|
11,200
|
|
|
7,680
|
|
|||
Interest expense
|
(18,638
|
)
|
|
(18,525
|
)
|
|
(15,463
|
)
|
|||
Other income (expense), net
|
3,788
|
|
|
(2,201
|
)
|
|
(1,960
|
)
|
|||
Income before provision for income taxes
|
459,446
|
|
|
456,624
|
|
|
479,776
|
|
|||
Provision for income taxes
|
143,314
|
|
|
135,218
|
|
|
145,828
|
|
|||
Net income
|
$
|
316,132
|
|
|
$
|
321,406
|
|
|
$
|
333,948
|
|
Net income per share:
|
|
|
|
|
|
||||||
Basic
|
$
|
1.81
|
|
|
$
|
1.80
|
|
|
$
|
1.87
|
|
Diluted
|
$
|
1.79
|
|
|
$
|
1.78
|
|
|
$
|
1.84
|
|
Shares used in per share calculations:
|
|
|
|
|
|
||||||
Basic
|
174,917
|
|
|
178,391
|
|
|
178,279
|
|
|||
Diluted
|
176,215
|
|
|
180,415
|
|
|
181,186
|
|
|
For the Years Ended December 31,
|
||||||||||
(in thousands)
|
2016
|
|
2015
|
|
2014
|
||||||
Net income
|
$
|
316,132
|
|
|
$
|
321,406
|
|
|
$
|
333,948
|
|
Other comprehensive loss:
|
|
|
|
|
|
||||||
Foreign currency translation adjustments
|
(14,081
|
)
|
|
(22,872
|
)
|
|
(15,349
|
)
|
|||
Change in unrealized loss on investments, net of income tax benefit of $432, $773 and $689 for the years ended December 31, 2016, 2015 and 2014, respectively
|
(688
|
)
|
|
(970
|
)
|
|
(171
|
)
|
|||
Other comprehensive loss
|
(14,769
|
)
|
|
(23,842
|
)
|
|
(15,520
|
)
|
|||
Comprehensive income
|
$
|
301,363
|
|
|
$
|
297,564
|
|
|
$
|
318,428
|
|
(in thousands)
|
For the Years Ended December 31,
|
||||||||||
2016
|
|
2015
|
|
2014
|
|||||||
Cash flows from operating activities:
|
|
|
|
|
|
||||||
Net income
|
$
|
316,132
|
|
|
$
|
321,406
|
|
|
$
|
333,948
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
334,302
|
|
|
299,563
|
|
|
247,406
|
|
|||
Stock-based compensation
|
144,506
|
|
|
126,677
|
|
|
111,996
|
|
|||
Excess tax benefits from stock-based compensation
|
(5,514
|
)
|
|
(29,301
|
)
|
|
(32,238
|
)
|
|||
Provision (benefit) for deferred income taxes
|
7,308
|
|
|
4,098
|
|
|
(25,880
|
)
|
|||
Amortization of debt discount and issuance costs
|
18,638
|
|
|
18,525
|
|
|
15,463
|
|
|||
Other non-cash reconciling items, net
|
10,574
|
|
|
5,804
|
|
|
2,565
|
|
|||
Changes in operating assets and liabilities, net of effects of acquisitions and divestitures:
|
|
|
|
|
|
||||||
Accounts receivable
|
3,356
|
|
|
(56,247
|
)
|
|
(58,397
|
)
|
|||
Prepaid expenses and other current assets
|
23,881
|
|
|
7,137
|
|
|
(60,788
|
)
|
|||
Accounts payable and accrued expenses
|
18,491
|
|
|
51,624
|
|
|
94,698
|
|
|||
Deferred revenue
|
(1,213
|
)
|
|
3,224
|
|
|
7,725
|
|
|||
Other current liabilities
|
5,484
|
|
|
(345
|
)
|
|
(702
|
)
|
|||
Other non-current assets and liabilities
|
(9,647
|
)
|
|
11,986
|
|
|
22,274
|
|
|||
Net cash provided by operating activities
|
866,298
|
|
|
764,151
|
|
|
658,070
|
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
||||||
Cash paid for acquisitions, net of cash acquired
|
(95,439
|
)
|
|
(141,147
|
)
|
|
(386,532
|
)
|
|||
Purchases of property and equipment
|
(180,949
|
)
|
|
(311,676
|
)
|
|
(207,159
|
)
|
|||
Capitalization of internal-use software development costs
|
(135,340
|
)
|
|
(133,307
|
)
|
|
(111,468
|
)
|
|||
Purchases of short- and long-term marketable securities
|
(781,061
|
)
|
|
(692,879
|
)
|
|
(1,225,409
|
)
|
|||
Proceeds from sales of short- and long-term marketable securities
|
57,740
|
|
|
2,008
|
|
|
373,730
|
|
|||
Proceeds from maturities of short- and long-term marketable securities
|
664,837
|
|
|
843,931
|
|
|
372,287
|
|
|||
Other non-current assets and liabilities
|
782
|
|
|
(2,494
|
)
|
|
5,745
|
|
|||
Net cash used in by investing activities
|
(469,430
|
)
|
|
(435,564
|
)
|
|
(1,178,806
|
)
|
(in thousands)
|
For the Years Ended December 31,
|
||||||||||
2016
|
|
2015
|
|
2014
|
|||||||
Cash flows from financing activities:
|
|
|
|
|
|
||||||
Proceeds from the issuance of convertible senior notes, net of issuance costs
|
—
|
|
|
—
|
|
|
678,735
|
|
|||
Proceeds from the issuance of warrants related to convertible senior notes
|
—
|
|
|
—
|
|
|
77,970
|
|
|||
Purchase of note hedge related to convertible senior notes
|
—
|
|
|
—
|
|
|
(101,292
|
)
|
|||
Repayment of acquired debt and capital leases
|
—
|
|
|
—
|
|
|
(17,862
|
)
|
|||
Proceeds related to the issuance of common stock under stock plans
|
59,560
|
|
|
61,791
|
|
|
87,109
|
|
|||
Excess tax benefits from stock-based compensation
|
5,514
|
|
|
29,301
|
|
|
32,238
|
|
|||
Employee taxes paid related to net share settlement of stock-based awards
|
(45,545
|
)
|
|
(54,164
|
)
|
|
(50,649
|
)
|
|||
Repurchases of common stock
|
(373,794
|
)
|
|
(302,606
|
)
|
|
(268,647
|
)
|
|||
Other non-current assets and liabilities
|
—
|
|
|
(2,050
|
)
|
|
(1,575
|
)
|
|||
Net cash (used in) provided by financing activities
|
(354,265
|
)
|
|
(267,728
|
)
|
|
436,027
|
|
|||
Effects of exchange rate changes on cash and cash equivalents
|
(7,907
|
)
|
|
(10,036
|
)
|
|
(10,532
|
)
|
|||
Net increase (decrease) in cash and cash equivalents
|
34,696
|
|
|
50,823
|
|
|
(95,241
|
)
|
|||
Cash and cash equivalents at beginning of year
|
289,473
|
|
|
238,650
|
|
|
333,891
|
|
|||
Cash and cash equivalents at end of year
|
$
|
324,169
|
|
|
$
|
289,473
|
|
|
$
|
238,650
|
|
|
|
|
|
|
|
||||||
Supplemental disclosure of cash flow information:
|
|
|
|
|
|
||||||
Cash paid for income taxes, net of refunds received in the years ended December 31, 2016 and 2015 of $1,664 and $19,374, respectively
|
$
|
120,223
|
|
|
$
|
75,033
|
|
|
$
|
166,211
|
|
Non-cash financing and investing activities:
|
|
|
|
|
|
||||||
Purchases of property and equipment and capitalization of internal-use software development costs included in accounts payable and accrued expenses
|
$
|
36,742
|
|
|
$
|
19,327
|
|
|
$
|
45,868
|
|
Capitalization of stock-based compensation
|
$
|
23,093
|
|
|
$
|
17,867
|
|
|
$
|
15,226
|
|
(in thousands, except share data)
|
Common Stock
|
|
Additional Paid-in Capital
|
|
Treasury Stock
|
|
Accumulated Other Comprehensive Loss
|
|
Accumulated
Deficit
|
|
Total Stockholders' Equity
|
|||||||||||||||
Shares
|
|
Amount
|
|
|||||||||||||||||||||||
Balance at January 1, 2014
|
178,580,696
|
|
|
$
|
1,808
|
|
|
$
|
4,561,929
|
|
|
$
|
—
|
|
|
$
|
(2,091
|
)
|
|
$
|
(1,932,215
|
)
|
|
$
|
2,629,431
|
|
Issuance of common stock upon the exercise of stock options and vesting of restricted and deferred stock units, net of shares withheld for employee taxes
|
3,648,994
|
|
|
14
|
|
|
6,444
|
|
|
|
|
|
|
|
|
6,458
|
|
|||||||||
Issuance of common stock under employee stock purchase plan
|
700,879
|
|
|
7
|
|
|
29,264
|
|
|
|
|
|
|
|
|
29,271
|
|
|||||||||
Stock-based compensation
|
|
|
|
|
127,222
|
|
|
|
|
|
|
|
|
127,222
|
|
|||||||||||
Tax benefit from stock-based award activity, net
|
|
|
|
|
26,867
|
|
|
|
|
|
|
|
|
26,867
|
|
|||||||||||
Equity component of convertible senior notes, net of issuance costs of $1,649
|
|
|
|
|
99,627
|
|
|
|
|
|
|
|
|
99,627
|
|
|||||||||||
Issuance of warrants related to convertible senior notes
|
|
|
|
|
77,970
|
|
|
|
|
|
|
|
|
77,970
|
|
|||||||||||
Purchase of note hedge related to convertible senior notes
|
|
|
|
|
(101,292
|
)
|
|
|
|
|
|
|
|
(101,292
|
)
|
|||||||||||
Repurchases of common stock
|
(4,629,966
|
)
|
|
|
|
|
|
|
(268,647
|
)
|
|
|
|
|
|
|
|
(268,647
|
)
|
|||||||
Treasury stock retirement
|
|
|
(46
|
)
|
|
(268,601
|
)
|
|
268,647
|
|
|
|
|
|
|
—
|
|
|||||||||
Net income
|
|
|
|
|
|
|
|
|
|
|
333,948
|
|
|
333,948
|
|
|||||||||||
Foreign currency translation adjustment
|
|
|
|
|
|
|
|
|
(15,349
|
)
|
|
|
|
(15,349
|
)
|
|||||||||||
Change in unrealized gain on investments, net of tax
|
|
|
|
|
|
|
|
|
(171
|
)
|
|
|
|
(171
|
)
|
|||||||||||
Balance at December 31, 2014
|
178,300,603
|
|
|
1,783
|
|
|
4,559,430
|
|
|
—
|
|
|
(17,611
|
)
|
|
(1,598,267
|
)
|
|
2,945,335
|
|
||||||
Issuance of common stock upon the exercise of stock options and vesting of restricted and deferred stock units, net of shares withheld for employee taxes
|
2,756,357
|
|
|
27
|
|
|
(27,697
|
)
|
|
|
|
|
|
|
|
(27,670
|
)
|
|||||||||
Issuance of common stock under employee stock purchase plan
|
668,654
|
|
|
7
|
|
|
34,834
|
|
|
|
|
|
|
|
|
34,841
|
|
|||||||||
Stock-based compensation
|
|
|
|
|
144,544
|
|
|
|
|
|
|
|
|
144,544
|
|
|||||||||||
Tax benefit from stock-based award activity, net
|
|
|
|
|
|
|
28,870
|
|
|
|
|
|
|
|
|
28,870
|
|
|||||||||
Repurchases of common stock
|
(4,513,433
|
)
|
|
|
|
|
|
|
|
(302,606
|
)
|
|
|
|
|
|
(302,606
|
)
|
||||||||
Treasury stock retirement
|
|
|
(45
|
)
|
|
(302,561
|
)
|
|
302,606
|
|
|
|
|
|
|
—
|
|
|||||||||
Net income
|
|
|
|
|
|
|
|
|
|
|
321,406
|
|
|
321,406
|
|
|||||||||||
Foreign currency translation adjustment
|
|
|
|
|
|
|
|
|
(22,872
|
)
|
|
|
|
(22,872
|
)
|
|||||||||||
Change in unrealized gain on investments, net of tax
|
|
|
|
|
|
|
|
|
(970
|
)
|
|
|
|
(970
|
)
|
|||||||||||
Balance at December 31, 2015
|
177,212,181
|
|
|
$
|
1,772
|
|
|
$
|
4,437,420
|
|
|
$
|
—
|
|
|
$
|
(41,453
|
)
|
|
$
|
(1,276,861
|
)
|
|
$
|
3,120,878
|
|
(in thousands, except share data)
|
Common Stock
|
|
Additional Paid-in Capital
|
|
Treasury Stock
|
|
Accumulated Other Comprehensive Loss
|
|
Accumulated
Deficit
|
|
Total Stockholders' Equity
|
|||||||||||||||
Shares
|
|
Amount
|
|
|||||||||||||||||||||||
Balance at December 31, 2015
|
177,212,181
|
|
|
$
|
1,772
|
|
|
$
|
4,437,420
|
|
|
$
|
—
|
|
|
$
|
(41,453
|
)
|
|
$
|
(1,276,861
|
)
|
|
$
|
3,120,878
|
|
Issuance of common stock upon the exercise of stock options and vesting of restricted and deferred stock units, net of shares withheld for employee taxes
|
2,194,699
|
|
|
22
|
|
|
(27,416
|
)
|
|
|
|
|
|
|
|
(27,394
|
)
|
|||||||||
Issuance of common stock under employee stock purchase plan
|
863,419
|
|
|
9
|
|
|
39,905
|
|
|
|
|
|
|
|
|
39,914
|
|
|||||||||
Stock-based compensation
|
|
|
|
|
166,987
|
|
|
|
|
|
|
|
|
166,987
|
|
|||||||||||
Tax deficiency from stock-based award activity, net
|
|
|
|
|
(3,584
|
)
|
|
|
|
|
|
|
|
(3,584
|
)
|
|||||||||||
Repurchases of common stock
|
(7,015,502
|
)
|
|
|
|
|
|
(373,794
|
)
|
|
|
|
|
|
(373,794
|
)
|
||||||||||
Treasury stock retirement
|
|
|
(70
|
)
|
|
(373,724
|
)
|
|
373,794
|
|
|
|
|
|
|
—
|
|
|||||||||
Net income
|
|
|
|
|
|
|
|
|
|
|
316,132
|
|
|
316,132
|
|
|||||||||||
Foreign currency translation adjustment
|
|
|
|
|
|
|
|
|
(14,081
|
)
|
|
|
|
(14,081
|
)
|
|||||||||||
Change in unrealized gain on investments, net of tax
|
|
|
|
|
|
|
|
|
(688
|
)
|
|
|
|
(688
|
)
|
|||||||||||
Balance at December 31, 2016
|
173,254,797
|
|
|
$
|
1,733
|
|
|
$
|
4,239,588
|
|
|
$
|
—
|
|
|
$
|
(56,222
|
)
|
|
$
|
(960,729
|
)
|
|
$
|
3,224,370
|
|
|
|
|
Gross Unrealized
|
|
Aggregate
Fair Value
|
|
Classification on Balance Sheet
|
||||||||||||||||
|
Amortized Cost
|
|
|
|
|
|
|
Short-Term
Marketable
Securities
|
|
Long-Term
Marketable
Securities
|
|||||||||||||
As of December 31, 2016
|
|
Gains
|
|
Losses
|
|
|
|
||||||||||||||||
Commercial paper
|
$
|
40,965
|
|
|
$
|
—
|
|
|
$
|
(45
|
)
|
|
$
|
40,920
|
|
|
$
|
40,920
|
|
|
$
|
—
|
|
Corporate bonds
|
984,650
|
|
|
123
|
|
|
(3,697
|
)
|
|
981,076
|
|
|
418,495
|
|
|
562,581
|
|
||||||
U.S. government agency obligations
|
267,473
|
|
|
35
|
|
|
(1,366
|
)
|
|
266,142
|
|
|
53,157
|
|
|
212,985
|
|
||||||
|
$
|
1,293,088
|
|
|
$
|
158
|
|
|
$
|
(5,108
|
)
|
|
$
|
1,288,138
|
|
|
$
|
512,572
|
|
|
$
|
775,566
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
As of December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Commercial paper
|
$
|
2,491
|
|
|
$
|
—
|
|
|
$
|
(4
|
)
|
|
$
|
2,487
|
|
|
$
|
2,487
|
|
|
$
|
—
|
|
Corporate bonds
|
995,100
|
|
|
73
|
|
|
(3,365
|
)
|
|
991,808
|
|
|
432,585
|
|
|
559,223
|
|
||||||
U.S. government agency obligations
|
239,587
|
|
|
41
|
|
|
(575
|
)
|
|
239,053
|
|
|
25,016
|
|
|
214,037
|
|
||||||
|
$
|
1,237,178
|
|
|
$
|
114
|
|
|
$
|
(3,944
|
)
|
|
$
|
1,233,348
|
|
|
$
|
460,088
|
|
|
$
|
773,260
|
|
|
Total Fair Value
|
|
Fair Value Measurements at Reporting Date Using
|
||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||
As of December 31, 2016
|
|
|
|
|
|
|
|
||||||||
Cash Equivalents and Marketable Securities:
|
|
|
|
|
|
|
|
||||||||
Money market funds
|
$
|
8,726
|
|
|
$
|
8,726
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Commercial paper
|
40,920
|
|
|
—
|
|
|
40,920
|
|
|
—
|
|
||||
Corporate bonds
|
981,076
|
|
|
—
|
|
|
981,076
|
|
|
—
|
|
||||
U.S. government agency obligations
|
266,142
|
|
|
—
|
|
|
266,142
|
|
|
—
|
|
||||
Mutual funds
|
4,022
|
|
|
4,022
|
|
|
—
|
|
|
—
|
|
||||
|
$
|
1,300,886
|
|
|
$
|
12,748
|
|
|
$
|
1,288,138
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Contingent consideration obligation related to completed acquisitions
|
$
|
(7,100
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(7,100
|
)
|
|
|
|
|
|
|
|
|
||||||||
As of December 31, 2015
|
|
|
|
|
|
|
|
||||||||
Cash Equivalents and Marketable Securities:
|
|
|
|
|
|
|
|
||||||||
Money market funds
|
$
|
1,250
|
|
|
$
|
1,250
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Commercial paper
|
2,487
|
|
|
—
|
|
|
2,487
|
|
|
—
|
|
||||
Corporate bonds
|
991,808
|
|
|
—
|
|
|
991,808
|
|
|
—
|
|
||||
U.S. government agency obligations
|
239,053
|
|
|
—
|
|
|
239,053
|
|
|
—
|
|
||||
Mutual funds
|
1,414
|
|
|
1,414
|
|
|
—
|
|
|
—
|
|
||||
|
$
|
1,236,012
|
|
|
$
|
2,664
|
|
|
$
|
1,233,348
|
|
|
$
|
—
|
|
|
Other Liabilities:
Contingent Consideration Obligation |
||
Balance, January 1, 2015
|
$
|
(900
|
)
|
Fair value adjustment to Velocius contingent consideration included in general and administrative expense
|
(100
|
)
|
|
Achievement of final milestone related to Velocius contingent consideration
|
1,000
|
|
|
Balance, December 31, 2015
|
$
|
—
|
|
Contingent consideration obligation related to Soha Systems, Inc. acquisition
|
(1,600
|
)
|
|
Contingent consideration obligation related to Cyberfend, Inc. acquisition
|
(5,500
|
)
|
|
Balance, December 31, 2016
|
$
|
(7,100
|
)
|
|
December 31, 2016
|
|
December 31, 2015
|
||||
Due in 1 year or less
|
$
|
512,572
|
|
|
$
|
460,088
|
|
Due after 1 year through 5 years
|
775,566
|
|
|
773,260
|
|
||
|
$
|
1,288,138
|
|
|
$
|
1,233,348
|
|
|
December 31, 2016
|
|
December 31, 2015
|
||||
Trade accounts receivable
|
$
|
260,976
|
|
|
$
|
262,885
|
|
Unbilled accounts receivable
|
113,765
|
|
|
124,878
|
|
||
Gross accounts receivable
|
374,741
|
|
|
387,763
|
|
||
Allowance for doubtful accounts
|
(829
|
)
|
|
(906
|
)
|
||
Reserve for cash-basis customers
|
(5,316
|
)
|
|
(6,458
|
)
|
||
Total accounts receivable reserves
|
(6,145
|
)
|
|
(7,364
|
)
|
||
Accounts receivable, net
|
$
|
368,596
|
|
|
$
|
380,399
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
Beginning balance
|
$
|
7,364
|
|
|
$
|
9,023
|
|
|
$
|
3,703
|
|
Charges to income from operations
|
49,677
|
|
|
37,870
|
|
|
32,293
|
|
|||
Collections from cash basis customers and write-offs
|
(50,896
|
)
|
|
(39,529
|
)
|
|
(26,973
|
)
|
|||
Ending balance
|
$
|
6,145
|
|
|
$
|
7,364
|
|
|
$
|
9,023
|
|
|
December 31, 2016
|
|
December 31, 2015
|
||||
Prepaid income taxes
|
$
|
25,161
|
|
|
$
|
31,045
|
|
Other prepaid expenses
|
40,532
|
|
|
43,751
|
|
||
Other current assets
|
38,610
|
|
|
48,432
|
|
||
Total
|
$
|
104,303
|
|
|
$
|
123,228
|
|
|
December 31, 2016
|
|
December 31, 2015
|
|
Estimated Useful Life in Years
|
||||
Computer and networking equipment
|
$
|
1,170,471
|
|
|
$
|
1,046,739
|
|
|
3-7
|
Purchased software
|
51,727
|
|
|
46,509
|
|
|
3-10
|
||
Furniture and fixtures
|
41,968
|
|
|
35,212
|
|
|
5
|
||
Office equipment
|
24,497
|
|
|
21,108
|
|
|
3-5
|
||
Leasehold improvements
|
139,991
|
|
|
119,466
|
|
|
1-16
|
||
Internal-use software
|
656,053
|
|
|
546,520
|
|
|
2-7
|
||
Property and equipment, gross
|
2,084,707
|
|
|
1,815,554
|
|
|
|
||
Accumulated depreciation and amortization
|
(1,283,690
|
)
|
|
(1,062,374
|
)
|
|
|
||
Property and equipment, net
|
$
|
801,017
|
|
|
$
|
753,180
|
|
|
|
|
2016
|
|
2015
|
||||
Beginning balance
|
$
|
1,150,244
|
|
|
$
|
1,051,294
|
|
Acquisition of Xerocole, Inc.
|
—
|
|
|
12,859
|
|
||
Acquisition of Codemate A/S
|
—
|
|
|
69,445
|
|
||
Acquisition of Bloxx Limited
|
—
|
|
|
17,694
|
|
||
Acquisition of Concord Systems, Inc.
|
1,079
|
|
|
—
|
|
||
Acquisition of Soha Systems, Inc.
|
43,515
|
|
|
—
|
|
||
Acquisition of Cyberfend, Inc.
|
38,754
|
|
|
—
|
|
||
Foreign currency translation
|
(5,089
|
)
|
|
(1,048
|
)
|
||
Ending balance
|
$
|
1,228,503
|
|
|
$
|
1,150,244
|
|
|
December 31, 2016
|
|
December 31, 2015
|
||||||||||||||||||||
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
Carrying
Amount
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
Carrying
Amount
|
|||||||||||||
Completed technologies
|
$
|
119,091
|
|
|
$
|
(50,823
|
)
|
|
$
|
68,268
|
|
|
$
|
120,791
|
|
|
$
|
(58,633
|
)
|
|
$
|
62,158
|
|
Customer-related intangible assets
|
192,810
|
|
|
(114,209
|
)
|
|
78,601
|
|
|
191,710
|
|
|
(102,872
|
)
|
|
88,838
|
|
||||||
Non-compete agreements
|
5,030
|
|
|
(3,775
|
)
|
|
1,255
|
|
|
6,540
|
|
|
(3,374
|
)
|
|
3,166
|
|
||||||
Trademarks and trade names
|
3,700
|
|
|
(2,361
|
)
|
|
1,339
|
|
|
3,700
|
|
|
(1,767
|
)
|
|
1,933
|
|
||||||
Acquired license rights
|
490
|
|
|
(490
|
)
|
|
—
|
|
|
490
|
|
|
(490
|
)
|
|
—
|
|
||||||
Total
|
$
|
321,121
|
|
|
$
|
(171,658
|
)
|
|
$
|
149,463
|
|
|
$
|
323,231
|
|
|
$
|
(167,136
|
)
|
|
$
|
156,095
|
|
Total purchase consideration
|
|
$
|
107,047
|
|
|
|
|
||
Allocation of the purchase consideration:
|
|
|
||
Cash
|
|
$
|
664
|
|
Accounts receivable
|
|
1,976
|
|
|
Other current assets
|
|
393
|
|
|
Identifiable intangible assets
|
|
41,950
|
|
|
Goodwill
|
|
69,445
|
|
|
Deferred tax assets
|
|
5,230
|
|
|
Total assets acquired
|
|
119,658
|
|
|
Other current liabilities
|
|
(1,983
|
)
|
|
Current deferred revenue
|
|
(770
|
)
|
|
Deferred tax liabilities
|
|
(9,858
|
)
|
|
Total liabilities assumed
|
|
(12,611
|
)
|
|
Net assets acquired
|
|
$
|
107,047
|
|
|
Gross Carrying Amount
|
|
Weighted Average Useful Life (in years)
|
||
Completed technologies
|
$
|
25,310
|
|
|
9.8
|
Customer-related intangible assets
|
16,560
|
|
|
11.8
|
|
Non-compete agreements
|
80
|
|
|
2.0
|
|
Total
|
$
|
41,950
|
|
|
|
Total purchase consideration
|
|
$
|
392,104
|
|
|
|
|
||
Allocation of the purchase consideration:
|
|
|
||
Cash
|
|
$
|
33,072
|
|
Accounts receivable
|
|
11,208
|
|
|
Property and equipment
|
|
12,225
|
|
|
Identifiable intangible assets
|
|
87,040
|
|
|
Goodwill
|
|
293,926
|
|
|
Deferred tax assets
|
|
16,340
|
|
|
Other current and long-term assets
|
|
5,664
|
|
|
Total assets acquired
|
|
459,475
|
|
|
Other current liabilities
|
|
(5,940
|
)
|
|
Current deferred revenue
|
|
(5,812
|
)
|
|
Deferred tax liabilities
|
|
(36,203
|
)
|
|
Debt, capital leases and other long-term liabilities
|
|
(19,416
|
)
|
|
Total liabilities assumed
|
|
(67,371
|
)
|
|
Net assets acquired
|
|
$
|
392,104
|
|
|
Gross Carrying Amount
|
|
Weighted Average Useful Life (in years)
|
||
Completed technologies
|
$
|
26,800
|
|
|
6.9
|
Customer-related intangible assets
|
58,500
|
|
|
10.4
|
|
Non-compete agreements
|
940
|
|
|
3.0
|
|
Trademark
|
800
|
|
|
4.9
|
|
Total
|
$
|
87,040
|
|
|
|
|
December 31, 2016
|
|
December 31, 2015
|
||||
Payroll and other related benefits
|
$
|
111,421
|
|
|
$
|
108,230
|
|
Bandwidth and co-location
|
61,084
|
|
|
48,228
|
|
||
Property, use and other taxes
|
52,959
|
|
|
47,364
|
|
||
Professional service fees
|
4,277
|
|
|
4,636
|
|
||
Other accrued expenses
|
9,036
|
|
|
7,708
|
|
||
Total
|
$
|
238,777
|
|
|
$
|
216,166
|
|
|
December 31, 2016
|
|
December 31, 2015
|
||||
Deferred rent
|
$
|
29,668
|
|
|
$
|
32,876
|
|
Uncertain tax positions
|
73,231
|
|
|
53,641
|
|
||
Other long-term liabilities
|
15,792
|
|
|
6,751
|
|
||
Total
|
$
|
118,691
|
|
|
$
|
93,268
|
|
•
|
during any calendar quarter commencing after the calendar quarter ended June 30, 2014 (and only during such calendar quarter), if the last reported sale price of the Company's common stock for at least
20
trading days (whether or not consecutive) during the period of
30
consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to
130%
of the conversion price on each applicable trading day; or
|
•
|
during the
five
business day period after any
five
consecutive trading day period in which the trading price per
$1,000
principal amount of Notes for each trading day of the measurement period was less than
98%
of the product of the last reported sale price of the Company's common stock and the conversion rate on each such trading day; or upon the occurrence of specified corporate events.
|
|
December 31, 2016
|
|
December 31, 2015
|
||||
Liability component:
|
|
|
|
||||
Principal
|
$
|
690,000
|
|
|
$
|
690,000
|
|
Less: debt discount and issuance costs, net of amortization
|
(49,913
|
)
|
|
(71,953
|
)
|
||
Net carrying amount
|
$
|
640,087
|
|
|
$
|
618,047
|
|
|
|
|
|
||||
Equity component:
|
$
|
101,276
|
|
|
$
|
101,276
|
|
|
2016
|
|
2015
|
||||
Amortization of debt discount and issuance costs
|
$
|
22,040
|
|
|
$
|
21,280
|
|
Capitalization of interest expense
|
(3,402
|
)
|
|
(2,755
|
)
|
||
Total interest expense
|
$
|
18,638
|
|
|
$
|
18,525
|
|
2017
|
$
|
53,410
|
|
2018
|
45,202
|
|
|
2019
|
44,586
|
|
|
2020
|
54,206
|
|
|
2021
|
54,934
|
|
|
Thereafter
|
533,088
|
|
|
Total
|
$
|
785,426
|
|
|
Bandwidth and Co-location Commitments
|
|
Purchase Order Commitments
|
||||
2017
|
$
|
105,451
|
|
|
$
|
137,642
|
|
2018
|
13,799
|
|
|
10,522
|
|
||
2019
|
6,368
|
|
|
1,827
|
|
||
2020
|
386
|
|
|
320
|
|
||
2021
|
193
|
|
|
320
|
|
||
Thereafter
|
—
|
|
|
—
|
|
||
Total
|
$
|
126,197
|
|
|
$
|
150,631
|
|
|
Foreign Currency Translation
|
|
Net Unrealized Gains (Losses) on Investments
|
|
Total
|
||||||
Balance as of January 1, 2016
|
$
|
(44,936
|
)
|
|
$
|
3,483
|
|
|
$
|
(41,453
|
)
|
Other comprehensive loss
|
(14,081
|
)
|
|
(688
|
)
|
|
(14,769
|
)
|
|||
Balance as of December 31, 2016
|
$
|
(59,017
|
)
|
|
$
|
2,795
|
|
|
$
|
(56,222
|
)
|
|
2016
|
|
2015
|
|
2014
|
||||||
Cost of revenue
|
$
|
18,287
|
|
|
$
|
14,145
|
|
|
$
|
11,934
|
|
Research and development
|
29,739
|
|
|
23,927
|
|
|
19,341
|
|
|||
Sales and marketing
|
55,407
|
|
|
53,542
|
|
|
47,570
|
|
|||
General and administrative
|
41,073
|
|
|
35,063
|
|
|
33,151
|
|
|||
Total stock-based compensation
|
144,506
|
|
|
126,677
|
|
|
111,996
|
|
|||
Provision for income taxes
|
(49,014
|
)
|
|
(49,033
|
)
|
|
(39,182
|
)
|
|||
Total stock-based compensation, net of taxes
|
$
|
95,492
|
|
|
$
|
77,644
|
|
|
$
|
72,814
|
|
|
2014
|
|
Expected term (in years)
|
4.4
|
|
Risk-free interest rate
|
0.8
|
%
|
Expected volatility
|
40.4
|
%
|
Dividend yield
|
—
|
%
|
|
2016
|
|
2015
|
|
2014
|
|||
Expected term (in years)
|
0.5
|
|
|
0.5
|
|
|
0.5
|
|
Risk-free interest rate
|
0.5
|
%
|
|
0.2
|
%
|
|
0.1
|
%
|
Expected volatility
|
36.2
|
%
|
|
28.0
|
%
|
|
33.5
|
%
|
Dividend yield
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
Shares
(in thousands)
|
|
Weighted Average Exercise Price
|
|
Weighted Average Remaining Contractual Term
(in years)
|
|
Aggregate Intrinsic Value
(in thousands)
|
|||||
Outstanding at January 1, 2016
|
1,524
|
|
|
$
|
32.39
|
|
|
|
|
|
||
Exercised
|
(643
|
)
|
|
28.17
|
|
|
|
|
|
|||
Forfeited
|
(7
|
)
|
|
29.69
|
|
|
|
|
|
|||
Outstanding at December 31, 2016
|
874
|
|
|
$
|
35.51
|
|
|
2.36
|
|
$
|
27,261
|
|
Exercisable at December 31, 2016
|
829
|
|
|
$
|
35.58
|
|
|
2.24
|
|
$
|
25,781
|
|
Vested or expected to vest December 31, 2016
|
870
|
|
|
$
|
35.52
|
|
|
2.35
|
|
$
|
27,123
|
|
|
Units
(in thousands)
|
|
Weighted Average Grant Date Fair Value
|
|||
Outstanding at January 1, 2016
|
146
|
|
|
$
|
45.42
|
|
Granted
|
46
|
|
|
50.72
|
|
|
Vested and distributed
|
(28
|
)
|
|
57.24
|
|
|
Outstanding at December 31, 2016
|
164
|
|
|
$
|
44.90
|
|
|
December 31, 2016
|
|
RSUs with service-based vesting conditions
|
3,873
|
|
RSUs with market-based vesting conditions
|
127
|
|
RSUs with performance-based vesting conditions
|
116
|
|
Total
|
4,116
|
|
|
Units
(in thousands)
|
|
Weighted Average Grant Date Fair Value
|
|||
Outstanding at January 1, 2016
|
4,495
|
|
|
$
|
62.20
|
|
Granted
|
4,116
|
|
|
56.40
|
|
|
Vested
|
(2,374
|
)
|
|
59.13
|
|
|
Forfeited
|
(527
|
)
|
|
59.68
|
|
|
Outstanding at December 31, 2016
|
5,710
|
|
|
$
|
59.51
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
U.S.
|
$
|
273,176
|
|
|
$
|
233,247
|
|
|
$
|
408,391
|
|
Foreign
|
186,270
|
|
|
223,377
|
|
|
71,385
|
|
|||
Income before provision for income taxes
|
$
|
459,446
|
|
|
$
|
456,624
|
|
|
$
|
479,776
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
Current tax provision (benefit):
|
|
|
|
|
|
||||||
Federal
|
$
|
89,816
|
|
|
$
|
70,298
|
|
|
$
|
153,471
|
|
State
|
6,238
|
|
|
(1,750
|
)
|
|
4,978
|
|
|||
Foreign
|
39,952
|
|
|
62,572
|
|
|
13,259
|
|
|||
Deferred tax provision (benefit):
|
|
|
|
|
|
||||||
Federal
|
4,265
|
|
|
23,381
|
|
|
(13,073
|
)
|
|||
State
|
(86
|
)
|
|
(742
|
)
|
|
(15,220
|
)
|
|||
Foreign
|
3,916
|
|
|
(18,536
|
)
|
|
2,442
|
|
|||
Change in valuation allowance
|
(787
|
)
|
|
(5
|
)
|
|
(29
|
)
|
|||
Total
|
$
|
143,314
|
|
|
$
|
135,218
|
|
|
$
|
145,828
|
|
|
2016
|
|
2015
|
|
2014
|
|||
U.S. federal income tax rate
|
35.0
|
%
|
|
35.0
|
%
|
|
35.0
|
%
|
State taxes
|
2.0
|
|
|
1.7
|
|
|
2.3
|
|
Nondeductible stock-based compensation
|
2.3
|
|
|
1.9
|
|
|
1.4
|
|
U.S. federal, state and foreign research and development credits
|
(3.3
|
)
|
|
(4.1
|
)
|
|
(3.2
|
)
|
Foreign earnings
|
(3.4
|
)
|
|
(4.6
|
)
|
|
(1.9
|
)
|
Domestic production activities deduction
|
(1.7
|
)
|
|
(1.2
|
)
|
|
(2.2
|
)
|
State software development activities benefit
|
—
|
|
|
—
|
|
|
(2.4
|
)
|
Other
|
0.3
|
|
|
0.9
|
|
|
1.4
|
|
|
31.2
|
%
|
|
29.6
|
%
|
|
30.4
|
%
|
|
2016
|
|
2015
|
||||
Accrued bonus
|
$
|
18,390
|
|
|
$
|
13,161
|
|
Deferred revenue
|
10,055
|
|
|
11,334
|
|
||
Deferred rent
|
12,592
|
|
|
13,224
|
|
||
Stock-based compensation
|
32,030
|
|
|
31,705
|
|
||
Net operating losses
|
7,855
|
|
|
8,855
|
|
||
Unrealized losses
|
1,862
|
|
|
1,421
|
|
||
Tax credit carryforwards
|
23,629
|
|
|
22,918
|
|
||
License income
|
16,932
|
|
|
—
|
|
||
Other
|
7,048
|
|
|
5,989
|
|
||
Deferred tax assets
|
130,393
|
|
|
108,607
|
|
||
Depreciation and amortization
|
(10,470
|
)
|
|
(10,848
|
)
|
||
Acquired intangible assets
|
(44,788
|
)
|
|
(37,923
|
)
|
||
Internal-use software development costs capitalized
|
(77,375
|
)
|
|
(66,807
|
)
|
||
Deferred tax liabilities
|
(132,633
|
)
|
|
(115,578
|
)
|
||
Valuation allowance
|
(430
|
)
|
|
(1,217
|
)
|
||
Net deferred tax liabilities
|
$
|
(2,670
|
)
|
|
$
|
(8,188
|
)
|
|
2016
|
|
2015
|
|
Expirations at Various Dates Through:
|
||||
NOL carryforwards:
|
|
|
|
|
|
||||
Federal
|
$
|
16,500
|
|
|
$
|
21,500
|
|
|
2029
|
State
|
11,400
|
|
|
28,200
|
|
|
2034
|
||
Foreign
|
—
|
|
|
—
|
|
|
|
||
Federal and state research and development tax credit carryforwards
|
41,500
|
|
|
39,800
|
|
|
2031
|
|
2016
|
|
2015
|
|
2014
|
||||||
Balance at beginning of year
|
$
|
65,290
|
|
|
$
|
33,320
|
|
|
$
|
24,651
|
|
Gross increases — tax positions of prior periods
|
6,391
|
|
|
11,238
|
|
|
12,925
|
|
|||
Gross increases — current-period tax positions
|
6,252
|
|
|
27,043
|
|
|
2,106
|
|
|||
Gross decreases — tax positions of prior periods
|
(6,778
|
)
|
|
(5,996
|
)
|
|
(6,362
|
)
|
|||
Gross decreases — settlements
|
(2,038
|
)
|
|
(315
|
)
|
|
—
|
|
|||
Balance at end of year
|
$
|
69,117
|
|
|
$
|
65,290
|
|
|
$
|
33,320
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
Numerator:
|
|
|
|
|
|
||||||
Net income
|
$
|
316,132
|
|
|
$
|
321,406
|
|
|
$
|
333,948
|
|
Denominator:
|
|
|
|
|
|
||||||
Shares used for basic net income per share
|
174,917
|
|
|
178,391
|
|
|
178,279
|
|
|||
Effect of dilutive securities:
|
|
|
|
|
|
||||||
Stock options
|
384
|
|
|
794
|
|
|
1,221
|
|
|||
RSUs and DSUs
|
914
|
|
|
1,230
|
|
|
1,686
|
|
|||
Convertible senior notes
|
—
|
|
|
—
|
|
|
—
|
|
|||
Warrants related to issuance of convertible senior notes
|
—
|
|
|
—
|
|
|
—
|
|
|||
Shares used for diluted net income per share
|
176,215
|
|
|
180,415
|
|
|
181,186
|
|
|||
Basic net income per share
|
$
|
1.81
|
|
|
$
|
1.80
|
|
|
$
|
1.87
|
|
Diluted net income per share
|
$
|
1.79
|
|
|
$
|
1.78
|
|
|
$
|
1.84
|
|
|
2016
|
|
2015
|
|
2014
|
|||
Stock options
|
58
|
|
|
22
|
|
|
402
|
|
Service-based RSUs
|
2,262
|
|
|
660
|
|
|
786
|
|
Performance-based RSUs
|
690
|
|
|
1,007
|
|
|
570
|
|
Convertible senior notes
|
7,704
|
|
|
7,704
|
|
|
7,704
|
|
Warrants related to issuance of convertible senior notes
|
7,704
|
|
|
7,704
|
|
|
7,704
|
|
Total shares excluded from computation
|
18,418
|
|
|
17,097
|
|
|
17,166
|
|
(in thousands, except per share data)
|
First Quarter
|
|
Second Quarter
|
|
Third Quarter
|
|
Fourth Quarter
|
||||||||
Year ended December 31, 2016:
|
|
|
|
|
|
|
|
||||||||
Revenue
|
$
|
567,725
|
|
|
$
|
572,135
|
|
|
$
|
584,065
|
|
|
$
|
616,124
|
|
Cost of revenue (exclusive of amortization of acquired intangible assets)
|
194,736
|
|
|
206,323
|
|
|
204,467
|
|
|
203,475
|
|
||||
Net income
|
74,858
|
|
|
73,635
|
|
|
76,000
|
|
|
91,639
|
|
||||
Basic net income per share
|
0.42
|
|
|
0.42
|
|
|
0.44
|
|
|
0.53
|
|
||||
Diluted net income per share
|
0.42
|
|
|
0.42
|
|
|
0.43
|
|
|
0.52
|
|
||||
Year ended December 31, 2015:
|
|
|
|
|
|
|
|
||||||||
Revenue
|
$
|
526,536
|
|
|
$
|
540,723
|
|
|
$
|
551,030
|
|
|
$
|
579,159
|
|
Cost of revenue (exclusive of amortization of acquired intangible assets)
|
169,294
|
|
|
179,910
|
|
|
183,204
|
|
|
193,212
|
|
||||
Net income
|
77,746
|
|
|
67,200
|
|
|
88,040
|
|
|
88,420
|
|
||||
Basic net income per share
|
0.44
|
|
|
0.38
|
|
|
0.49
|
|
|
0.50
|
|
||||
Diluted net income per share
|
0.43
|
|
|
0.37
|
|
|
0.49
|
|
|
0.49
|
|
•
|
pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the company;
|
•
|
provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and
|
•
|
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company’s assets that could have a material effect on the financial statements.
|
Name
|
|
Position
|
F. Thomson Leighton
|
|
Chief Executive Officer and Director (Principal Executive Officer)
|
James Benson
|
|
Chief Financial Officer (Principal Financial and Accounting Officer)
|
Robert Blumofe
|
|
Executive Vice President – Platform and GM Enterprise & Carrier Division
|
James Gemmell
|
|
Executive Vice President and Chief Human Resources Officer
|
Melanie Haratunian
|
|
Executive Vice President and General Counsel
|
Rick McConnell
|
|
President and GM Web Division
|
William Wheaton
|
|
Executive Vice President and GM Media Division
|
George H. Conrades
|
|
Director
|
Pamela J. Craig
|
|
Director
|
Monte E. Ford
|
|
Director
|
Jill A. Greenthal
|
|
Director
|
Daniel R. Hesse
|
|
Director
|
Jonathan F. Miller
|
|
Director
|
Paul Sagan
|
|
Director
|
Frederic V. Salerno
|
|
Director
|
Steven Scopellite
|
|
Director
|
Naomi O. Seligman
|
|
Director
|
Bernardus Verwaayen
|
|
Director
|
(a)
|
Documents Filed as Part of this Annual Report on Form 10-K
|
1.
|
Financial Statements (included in Item 8 of this Annual Report on Form 10-K):
|
•
|
Report of Independent Registered Public Accounting Firm
|
•
|
Consolidated Balance Sheets as of
December 31, 2016 and 2015
|
•
|
Consolidated Statements of Income for the years ended
December 31, 2016, 2015 and 2014
|
•
|
Consolidated Statements of Comprehensive Income for the years ended
December 31, 2016, 2015 and 2014
|
•
|
Consolidated Statements of Cash Flows for the years ended
December 31, 2016, 2015 and 2014
|
•
|
Consolidated Statements of Stockholders' Equity for the years ended
December 31, 2016, 2015 and 2014
|
•
|
Notes to Consolidated Financial Statements
|
2.
|
Financial Statement Schedules
|
(b)
|
The exhibits required by Item 601 of Regulation S-K are listed in the Exhibit Index immediately preceding the exhibits and are incorporated herein.
|
(c)
|
Not applicable.
|
February 28, 2017
|
AKAMAI TECHNOLOGIES, INC.
|
|
|
|
|
|
By:
|
/s/ JAMES BENSON
|
|
|
James Benson
Chief Financial Officer
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ F. THOMSON LEIGHTON
|
|
Chief Executive Officer and Director (Principal Executive Officer)
|
|
February 28, 2017
|
F. Thomson Leighton
|
|
|||
|
|
|
|
|
/s/ JAMES BENSON
|
|
Chief Financial Officer (Principal Financial and Accounting Officer)
|
|
February 28, 2017
|
James Benson
|
|
|||
|
|
|
|
|
/s/ GEORGE H. CONRADES
|
|
Director
|
|
February 28, 2017
|
George H. Conrades
|
|
|||
|
|
|
|
|
/s/ PAMELA J. CRAIG
|
|
Director
|
|
February 28, 2017
|
Pamela J. Craig
|
|
|||
|
|
|
|
|
/s/ MONTE E. FORD
|
|
Director
|
|
February 28, 2017
|
Monte E. Ford
|
|
|||
|
|
|
|
|
/s/ JILL A. GREENTHAL
|
|
Director
|
|
February 28, 2017
|
Jill A. Greenthal
|
|
|
||
|
|
|
|
|
/s/ DANIEL R. HESSE
|
|
Director
|
|
February 28, 2017
|
Daniel R. Hesse
|
|
|
||
|
|
|
|
|
/s/ JONATHAN F MILLER
|
|
Director
|
|
February 28, 2017
|
Jonathan F. Miller
|
|
|||
|
|
|
|
|
/s/ PAUL SAGAN
|
|
Director
|
|
February 28, 2017
|
Paul Sagan
|
|
|||
|
|
|
|
|
/s/ FREDERIC V. SALERNO
|
|
Director
|
|
February 28, 2017
|
Frederic V. Salerno
|
|
|||
|
|
|
|
|
/s/ STEVEN SCOPELLITE
|
|
Director
|
|
February 28, 2017
|
Steven Scopellite
|
|
|||
|
|
|
|
|
/s/ NAOMI O. SELIGMAN
|
|
Director
|
|
February 28, 2017
|
Naomi O. Seligman
|
|
|||
|
|
|
|
|
/s/ BERNARDUS VERWAAYEN
|
|
Director
|
|
February 28, 2017
|
Bernardus Verwaayen
|
|
|
3.1(A)
|
Amended and Restated Certificate of Incorporation of the Registrant
|
|
|
3.2(B)
|
Amended and Restated By-Laws of the Registrant, as amended
|
|
|
4.1(C)
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Specimen common stock certificate
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4.2(D)
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Indenture (including form of Notes) with respect to Akamai’s 0% Convertible Senior Notes due 2019, dated as of February 20, 2014, between Akamai and U.S. Bank National Association, as trustee.
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10.1(E)
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Summary of the Registrant’s Compensatory Arrangements with Non-Executive Directors
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10.2@
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Summary of the Registrant’s Compensatory Arrangements with Executive Officers
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10.3(F)@
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Second Amended and Restated 1998 Stock Incentive Plan of the Registrant, as amended
|
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10.4(G)@
|
Amended and Restated 1999 Employee Stock Purchase Plan of the Registrant
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10.5(H)@
|
Amendment to Amended and Restated 1999 Employee Stock Purchase Plan of the Registrant
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10.6(I)@
|
2001 Stock Incentive Plan of the Registrant
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10.7(J)
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2006 Stock Incentive Plan of the Registrant
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10.8(K)@
|
2009 Akamai Technologies, Inc. Stock Incentive Plan
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10.9(L)@
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2013 Akamai Technologies, Inc. Stock Incentive Plan (as amended)
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10.10(M)
|
Amended and Restated 1999 Stock Compensation Plan of Acerno Intermediate Holdings, Inc. (formerly known as I-Behavior Inc.)
|
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10.11(N)
|
Blaze Software Inc. Stock Option Plan
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10.12(O)
|
Cotendo, Inc. Amended and Restated 2008 Stock Plan
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10.13(P)@
|
Form of Incentive Stock Option Agreement granted under the 2006 Stock Incentive Plan
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10.14(P)@
|
Form of Nonstatutory Stock Option Agreement granted under the 2006 Stock Incentive Plan
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10.15(Q)
|
Four Cambridge Center Lease Agreement dated October 1, 2007
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10.16(Q)
|
Eight Cambridge Center Lease Agreement dated October 1, 2007
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10.17 (R)
|
Amendment to Lease Agreement for Eight Cambridge Center dated November 7, 2016
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10.18 (R)
|
Amendment to Lease Agreement for Four Cambridge Center dated November 7, 2016
|
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10.19 (R)
|
Indenture of Lease for 145 Broadway, Cambridge, Massachusetts dated November 7, 2016
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10.20 (R)
|
Must-Take Premises and Right of First Offer Agreement among the Registrant, Boston Properties Limited Partnership and the Trustees of Ten Cambridge Center Trust dated November 7, 2016
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10.21(S)†
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Exclusive Patent and Non-Exclusive Copyright License Agreement, dated as of October 26, 1998, between the Registrant and Massachusetts Institute of Technology
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10.22(T)@
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Employment Letter Agreement between the Registrant and F. Thomson Leighton dated February 25, 2013
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10.23 (U)@
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Amendment to Employment Letter Agreement between the Registrant and F. Thomson Leighton dated November 12, 2015
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10.24(V)@
|
Form of Executive Bonus Plan
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10.25(W)@
|
Akamai Technologies, Inc. Executive Severance Pay Plan
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10.26(U)@
|
Form of Executive Change in Control and Severance Agreement
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10.27@
|
Akamai Technologies, Inc. Policy on Departing Director Compensation
|
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10.28(Y)@
|
Form of Incentive Stock Option Agreement for use under the 2009 Stock Incentive Plan
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10.29(Y)@
|
Form of Non-Qualified Stock Option Agreement for use under the 2009 Stock Incentive Plan (four year vest)
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10.30(Z)@
|
Form of Stock Option Agreement for use under the 2009 Stock Incentive Plan (three-year vest)
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10.31(AA)@
|
Form of Stock Option Grant Agreement for use under the 2009 Stock Incentive Plan
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10.32(BB)@
|
Form of Restricted Stock Unit Agreement for use under the 2013 Stock Incentive Plan (time vesting)
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10.33(BB)@
|
Form of Restricted Stock Unit Agreement for use under the 2013 Stock Incentive Plan (performance vesting)
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10.34(BB)@
|
Form of Stock Option Agreement for use under the 2013 Stock Incentive Plan
|
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10.35(BB)
|
Form of Deferred Stock Unit Agreement for use under the 2013 Stock Incentive Plan
|
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10.36(CC)@
|
Form of Performance-Based Vesting Restricted Stock Unit Agreement with Retirement Provision
|
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10.37(D)
|
Form of Call Option Confirmation between Akamai and each Option Counterparty
|
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10.38(D)
|
Form of Warrant Confirmation between Akamai and each Option Counterparty
|
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10.39(U)@
|
Form of Restricted Stock Unit Agreement for use under the 2013 Stock Incentive Plan (performance vesting 2015)
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10.40(DD)@
|
Akamai Technologies, Inc. U.S. Non-Qualified Deferred Compensation Plan
|
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10.41(EE)@
|
Separation and Release Agreement dated February 9, 2016 between the Registrant and Robert W. Hughes
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21.1
|
Subsidiaries of the Registrant
|
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23.1
|
Consent of Independent Registered Public Accounting Firm
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31.1
|
Certification of Chief Executive Officer pursuant to Rule 13a- 14(a)/Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended
|
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31.2
|
Certification of Chief Financial Officer pursuant to Rule 13a- 14(a)/Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended
|
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32.1
|
Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
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32.2
|
Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
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101.INS
|
XBRL Instance Document
|
|
|
101.SCH
|
XBRL Taxonomy Extension Schema Document
|
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|
101.CAL
|
XBRL Taxonomy Calculation Linkbase Document
|
|
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
101.LAB
|
XBRL Taxonomy Label Linkbase Document
|
|
|
101.PRE
|
XBRL Taxonomy Presentation Linkbase Document
|
(A)
|
Incorporated by reference to the Registrant’s Quarterly Report on Form 10-Q (File No. 000-27275, 701319) filed with the Commission on August 14, 2000.
|
(B)
|
Incorporated by reference to the Registrant's Current Report on Form 8-K (File No. 000-27275, 141172551) filed with the Commission on October 24, 2014.
|
(C)
|
Incorporated by reference to the Registrant’s Registration Statement on Form S-1, as amended, filed with the Commission on October 13, 1999.
|
(D)
|
Incorporated by reference to the Registrant's Current Report on Form 8-K (File No. 000-27275, 14629736) filed with the Commission on February 20, 2014.
|
(E)
|
Incorporated by reference to the Registrant’s Annual Report on Form 10-K (File No. 000-27275, 4660513) filed with the Commission on March 3, 2014.
|
(F)
|
Incorporated by reference to the Registrant’s Quarterly Report on Form 10-Q (File No. 000-27275, 04961682) filed with the Commission on August 9, 2004.
|
(G)
|
Incorporated by reference to the Registrant’s Annual Report on Form 10-K (File No. 000-27275, 06691330) filed with the Commission on March 16, 2006.
|
(H)
|
Incorporated by reference to the Registrant’s Quarterly Report on Form 10-Q (File No. 000-27275, 08823347) filed with the Commission on May 12, 2008.
|
(I)
|
Incorporated by reference to the Registrant’s Annual Report on Form 10-K (File No. 000-27275, 02560808) filed with the Commission on February 27, 2002.
|
(J)
|
Incorporated by reference to the Registrant’s Current Report on Form 8-K (File No. 000-27275, 06870771) filed with the Commission on May 26, 2006.
|
(K)
|
Incorporated by reference to the Registrant's Current Report on Form 8-K (File No. 000-27275, 11865051) filed with the Commission on May 23, 2011.
|
(L)
|
Incorporated by reference to the Registrant’s Registration Statement on Form S-8 filed with the Commission on May 15, 2015.
|
(M)
|
Incorporated by reference to the Registrant’s Registration Statement on Form S-8 filed with the Commission on November 18, 2008.
|
(N)
|
Incorporated by reference to the Registrant’s Registration Statement on Form S-8 filed with the Commission on February 29, 2012.
|
(O)
|
Incorporated by reference to the Registrant’s Registration Statement on Form S-8 filed with the Commission on March 14, 2012.
|
(P)
|
Incorporated by reference to the Registrant’s Annual Report on Form 10-K (File No. 000-27275, 07663384) filed with the Commission on March 1, 2007.
|
(Q)
|
Incorporated by reference to the Registrant’s Annual Report on Form 10-K (File No. 000-27275, 08655930) filed with the Commission on February 29, 2008.
|
(R)
|
Incorporated by reference to the Registrant's Current Report on Form 10-K (File No. 000-27275, 161988699) filed with the Commission on November 10, 2016.
|
(S)
|
Incorporated by reference to the Registrant's Registration Statement on Form S-1 filed with the Commission on September 27, 1999.
|
(T)
|
Incorporated by reference to the Registrant's Annual Report on Form 10-K (File No. 000-27275, 13657899) filed with the Commission on March 1, 2013.
|
(U)
|
Incorporated by reference to the Registrant’s Current Report on Form 8-K (File No. 000-27275, 151238671) filed with the Commission on November 17, 2015.
|
(V)
|
Incorporated by reference to the Registrant's Annual Report on Form 10-K (File No. 000-27275, 161466754) filed with the Commission on February 29, 2016.
|
(W)
|
Incorporated by reference to the Registrant’s Current Report on Form 8-K (File No. 000-27275, 12974652) filed with the Commission on July 23, 2012.
|
(X)
|
Intentionally omitted.
|
(Y)
|
Incorporated by reference to the Registrant’s Current Report on Form 8-K (File No. 000-27275, 09851919) filed with the Commission on May 26, 2009.
|
(Z)
|
Incorporated by reference to the Registrant’s Current Report on Form 8-K (File No. 000-27275, 12532825) filed with the Commission on January 18, 2012.
|
(AA)
|
Incorporated by reference to the Registrant’s Quarterly Report on Form 10-Q (File No. 000-27275, 121192724) filed with the Commission on November 9, 2012.
|
(BB)
|
Incorporated by reference to the Registrant's Quarterly Report on Form 10-Q (File No. 000-27275, 131025074) filed with the Commission on August 9, 2013.
|
(CC)
|
Incorporated by reference to the Registrant’s Current Report on Form 8-K (File No. 000-27275, 15585212) filed with the Commission on February 6, 2015.
|
(DD)
|
Incorporated by reference to the Registrant's Quarterly Report on Form 10-Q (File No. 000-27275, 15850176) filed with the Commission on May 11, 2015.
|
(EE)
|
Incorporated by Reference to the Registrant’s Current Report on Form 8-K (File No. 000-27275, 161401157) filed with the Commission on February 9, 2016.
|
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