Non-GAAP net income (loss) consists of GAAP net income (loss) before taxes, excluding, as applicable, share-based compensation expense under SFAS No. 123R, amortization of purchased intangibles, the 2007 changes in the value of the make-whole provision of our convertible notes, as adjusted by the amount of additional taxes payable or tax benefit that the company would accrue if it used non-GAAP results instead of GAAP results to calculate the company's tax liability.
Non-GAAP EPS is defined as non-GAAP net income divided by the weighted average number of shares on a fully-diluted basis.
Non-GAAP gross profit and gross margin consist of GAAP gross profit and gross margin excluding share-based compensation expense under SFAS No 123R.
Non-GAAP operating expenses consist of GAAP operating expenses excluding share-based compensation expense under SFAS No. 123R and amortization of purchased intangibles
Non-GAAP tax rate consists of the GAAP tax rate adjusted for the tax effect of the adjustments from GAAP net income to non-GAAP net income.
Management believes that it is useful in measuring Thoratec's
operations to exclude amortization of intangibles, and in-process research
and development expenses. These costs are primarily fixed at the time of an
acquisition and, unlike other fixed costs that result from ordinary
operations, are the result of infrequent and irregular events. Management
believes it is useful to exclude 2007 changes in the value of the
make-whole provision of our convertible notes as this item is also
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