Polycom (PLCM) 8-K Polycom Announces Revenues of $336 Million for Third Quarter 2013

Exhibit 99.2

POLYCOM, INC.

Condensed Consolidated Statements of Operations

(In thousands, except per share amounts)

(Unaudited)

	Three Months Ended						Nine Months Ended
	September 30, 2013			September 30, 2012			September 30, 2013			September 30, 2012
Revenues:
Product revenues	$	242,515		$	247,058		$	740,066		$	780,611
Service revenues		93,946			88,334			280,381			258,991
Total revenues		336,461			335,392			1,020,447			1,039,602
Cost of revenues:
Cost of product revenues		102,830			102,235			309,994			316,863
Cost of service revenues		38,587			36,799			114,714			106,123
Total cost of revenues		141,417			139,034			424,708			422,986
Gross profit		195,044			196,358			595,739			616,616
Operating expenses:
Sales and marketing		107,292			117,853			325,663			348,041
Research and development		54,220			53,997			164,782			153,425
General and administrative		28,468			27,376			76,461			72,375
Amortization of purchased intangibles		2,487			2,512			7,535			7,318
Restructuring costs		24,887			6,171			34,639			21,829
Acquisition-related expenses		39			6,334			3,411			11,793
Total operating expenses		217,393			214,243			612,491			614,781
Operating income (loss)		(22,349	)		(17,885	)		(16,752	)		1,835
Interest expense		(850	)		(287	)		(1,736	)		(470	)
Interest income and other income (expense)		(784	)		57			(1,041	)		(2,540	)
Interest and other income (expense), net		(1,634	)		(230	)		(2,777	)		(3,010	)
Loss from continuing operations before provision for income taxes		(23,983	)		(18,115	)		(19,529	)		(1,175	)
Provision for (benefit from) income taxes		(5	)		(2,709	)		(2,963	)		105
Loss from continuing operations		(23,978	)		(15,406	)		(16,566	)		(1,280	)
Income from operations of discontinued operations, net of taxes		—			645			—			7,710
Gain from sale of discontinued operations, net of taxes		—			—			459			—
Net income (loss)	$	(23,978	)	$	(14,761	)	$	(16,107	)	$	6,430
Basic and diluted net income (loss) per share:
Loss per share from continuing operations	$	(0.14	)	$	(0.09	)	$	(0.10	)	$	(0.01	)
Income per share from discontinued operations, net of taxes	$	—		$	—		$	—		$	0.04
Gain per share from sale of discontinued operations, net of taxes	$	—		$	—		$	—		$	—
Basic net income (loss) per share	$	(0.14	)	$	(0.08	)	$	(0.09	)	$	0.04
Number of shares used in computation of net income (loss) per share:
Basic and diluted		170,310			176,847			172,644			177,331

Note:

Earnings per share amounts for continuing operations, discontinued operations and net income, as presented above, are calculated individually and may not sum due to rounding differences.

As a result of the net loss from continuing operations for all periods presented, all potentially issuable common shares have been excluded from the diluted shares used in the computation of earnings per share as their effect is anti-dilutive.

The tax provision and net income for the three and nine months ended September 30, 2012 have been revised from previously issued financial statements to correct an error. These adjustments were not considered material to previously issued financial statements. However, because of the significance of these adjustments to the current period, the Company has revised the prior periods contained herein. The adjustments had no impact on income before provision for income taxes or net cash flows.

POLYCOM, INC.

Condensed Consolidated Balance Sheets

(In thousands)

(Unaudited)

	September 30, 2013		December 31, 2012
ASSETS
Current assets
Cash and cash equivalents	$	712,694	$	477,073
Short-term investments		161,339		197,196
Trade receivables, net		175,223		194,654
Inventories		107,681		99,960
Deferred taxes		48,562		48,916
Prepaid expenses and other current assets		66,861		52,539
Total current assets		1,272,360		1,070,338
Property and equipment, net		122,379		133,319
Long-term investments		79,776		50,333
Goodwill and purchased intangibles		605,411		608,802
Deferred taxes		26,702		28,406
Other assets		28,864		21,238
Total assets	$	2,135,492	$	1,912,436
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	91,136	$	89,983
Accrued payroll and related liabilities		33,878		39,469
Taxes payable		4,880		4,736
Deferred revenue		172,056		158,482
Current portion of long term debt		6,250		—
Other accrued liabilities		71,592		63,018
Total current liabilities		379,792		355,688
Non-current liabilities
Deferred revenue		88,112		91,061
Long term debt		243,750		—
Taxes payable		14,926		15,598
Deferred taxes		229		236
Other non-current liabilities		34,381		22,079
Total liabilities		761,190		484,662
Stockholders’ equity		1,374,302		1,427,774
Total liabilities and stockholders’ equity	$	2,135,492	$	1,912,436

The tax provision and net income for the year ended December 31, 2012 have been revised from previously issued financial statements to correct an error. These adjustments were not considered material to previously issued financial statements. However, because of the significance of these adjustments to the current period, the Company has revised the prior periods contained herein. The adjustments had no impact on income before provision for income taxes or net cash flows.

POLYCOM, INC.

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

	Nine Months Ended
	September 30, 2013			September 30, 2012
Cash flows from operating activities:
Net income (loss)	$	(16,107	)	$	6,430
Adjustments to reconcile net income to net cash provided by operating activities:
Gain from sale of discontinued operations, net of tax		(459	)		—
Depreciation and amortization		49,654			45,592
Amortization of purchased intangibles		11,335			15,878
Amortization of debt issue costs		52			—
Write-down of excess and obsolete inventories		5,625			5,297
Provision for doubtful accounts		—			800
Stock-based compensation expense		53,300			66,256
Excess tax benefits from stock-based compensation		(780	)		(9,587	)
Loss on disposals of property and equipment		3,658			3,502
Changes in assets and liabilities, net of the effect of acquisitions:
Trade receivables		21,857			20,435
Inventories		(13,346	)		(13,858	)
Deferred taxes		2,058			(12,947	)
Prepaid expenses and other assets		(18,915	)		4,188
Accounts payable		(1,118	)		(31,552	)
Taxes payable		(4,006	)		1,032
Other accrued liabilities		24,661			19,958
Net cash provided by operating activities		117,469			121,424
Cash flows from investing activities:
Purchases of property and equipment		(41,793	)		(51,979	)
Purchases of investments		(200,945	)		(212,377	)
Proceeds from sale of investments		21,802			37,794
Proceeds from maturities of investments		185,634			178,162
Net cash received from sale of discontinued operations		556			—
Net cash paid in purchase acquisitions		(7,974	)		(4,583	)
Net cash used in investing activities		(42,720	)		(52,983	)
Cash flows from financing activities:
Proceeds from issuance of common stock under employee option and stock purchase plans		23,326			24,362
Proceeds from debt, net of debt issue costs		247,582			—
Repurchase of common stock		(110,816	)		(62,073	)
Excess tax benefits from stock-based compensation		780			9,587
Net cash provided by (used in) financing activities		160,872			(28,124	)
Net increase in cash and cash equivalents		235,621			40,317
Cash and cash equivalents, beginning of period		477,073			375,441
Cash and cash equivalents, end of period	$	712,694		$	415,758