Akamai (AKAM) 8-K Other events

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of report: February 28, 2003
(Date of earliest event reported)

AKAMAI TECHNOLOGIES, INC.

(Exact Name of Registrant as Specified in Charter)

Delaware	0-27275	04-3432319
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

8 Cambridge Center, Cambridge, Massachusetts 02142
(Address of Principal Executive Offices) (Zip Code)

Registrant’s telephone number, including area code: (617) 444-3000

TABLE OF CONTENTS

	Item 5. Other Events.
Akamai Technologies, Inc. Condensed Consolidated Balance Sheet
Akamai Technologies, Inc. Condensed Consolidated Statements of Operations
SIGNATURES

Item 5. Other Events.

     On February 28, 2003, we settled a lawsuit filed against us in June 2001 by a former employee alleging breach of contract. Under the terms of the settlement, we agreed to make a $3.55 million payment, of which $1.75 million will be reimbursed by our insurance carriers. We have recorded the net amount of $1.8 million as general and administrative expenses, increased other current assets by $1.75 million and increased accrued expenses by $3.55 million as of December 31, 2002.

     On January 28, 2003, we issued a press release that included our unaudited condensed consolidated statement of operations for the three and twelve months ended December 31, 2002 and unaudited condensed consolidated balance sheet as of December 31, 2002. On that date, we also held a telephone conference with the investing public to review those financial results during which we announced that we had positive earnings before income taxes, depreciation and amortization, or EBITDA. Subsequent to the date of the press release and the telephone conference, the parties participated in a mediation that resulted in the settlement. Accordingly, we recorded adjustments to our consolidated financial statements as of December 31, 2002. Furthermore, as a result of the adjustments above, our EBITDA was materially reduced by $1.8 million. EBITDA is, however, an unaudited financial metric that could be subject to additional adjustments over time. A revised reconciliation of net loss calculated in accordance with generally accepted accounting principles in the United States of America to normalized net loss and EBITDA, giving effect only to the adjustments related to settlement of this lawsuit, is available on our web site at www.akamai.com. We are not including the information contained on our web site as part of, or incorporating by reference into, this Current Report on Form 8-K.

     Set forth below is a reconciliation from our consolidated financial statements included in our press release on January 28, 2003 to the adjusted consolidated financial statements.

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Akamai Technologies, Inc.
Condensed Consolidated Balance Sheet
(dollar amounts in thousands)
(unaudited)

				Per Press Release						Adjusted
				December 31, 2002			Adjustment			December 31, 2002
		Assets
	Cash and cash equivalents			$	111,262		$	—		$	111,262
	Restricted cash and marketable securities				3,664						3,664
	Accounts receivable, net				17,574						17,574
	Prepaid expenses and other current assets				7,433			1,750			9,183
			Current assets:		139,933			1,750			141,683
	Restricted cash				10,244						10,244
	Property and equipment, net				63,159						63,159
	Goodwill and other intangible assets, net				7,410						7,410
	Other assets				7,367						7,367
			Total assets	$	228,113		$	1,750		$	229,863
		Liabilities and stockholders’ (deficit) equity
	Accounts payable and accrued expenses			$	50,359		$	3,550		$	53,909
	Other current liabilities				27,455						27,455
			Current liabilities:		77,814			3,550			81,364
	Other liabilities				16,589						16,589
	Convertible notes				300,000						300,000
			Total liabilities		394,403			3,550			397,953
Stockholders’ (deficit) equity					(166,290	)		(1,800	)		(168,090	)
			Total liabilities and stockholders’ (deficit) equity	$	228,113		$	1,750		$	229,863

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Akamai Technologies, Inc.
Condensed Consolidated Statements of Operations
(dollar amounts in thousands, except per share data)
(unaudited)

			Three Months Ended									Year Ended
			Per Press Release						Adjusted			Per Press Release						Adjusted
			December 31,						December 31,			December 31,						December 31,
			2002			Adjustment			2002			2002			Adjustment			2002
Revenue			$	35,352		$	—		$	35,352		$	144,976		$	—		$	144,976
Cost and operating expenses:
	Cost of revenue (before network-related depreciation)			6,603						6,603			38,371						38,371
	Research and development			2,845						2,845			17,158						17,158
	Sales and marketing			11,760						11,760			53,068						53,068
	General and administrative			11,091			1,800			12,891			54,044			1,800			55,844
	Amortization of CNN advertising			1,371						1,371			5,634						5,634
	Amortization of goodwill and other intangible assets			2,231						2,231			11,930						11,930
	Depreciation			17,141						17,141			78,488						78,488
	Equity-related compensation			5,562						5,562			21,195						21,195
	Restructuring charge			26,675						26,675			45,824						45,824
		Total cost and operating expenses		85,279			1,800			87,079			325,712			1,800			327,512
Operating loss				(49,927	)		(1,800	)		(51,727	)		(180,736	)		(1,800	)		(182,536	)
Interest expense, net				4,053						4,053			15,310						15,310
(Gain) loss on investments				(299	)					(299	)		6,099						6,099
Loss before provision for income taxes				(53,681	)		(1,800	)		(55,481	)		(202,145	)		(1,800	)		(203,945	)
Provision for income taxes				123						123			492						492
Net loss			$	(53,804	)	$	(1,800	)	$	(55,604	)	$	(202,637	)	$	(1,800	)	$	(204,437	)
Basic and diluted net loss per share			$	(0.47	)				$	(0.48	)	$	(1.80	)				$	(1.81	)
Weighted average common shares outstanding				114,866						114,866			112,766						112,766

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SIGNATURES

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

Dated:  March 13, 2003	AKAMAI TECHNOLOGIES, INC.
	/s/ Kathryn Jorden Meyer
	Kathryn Jorden Meyer Vice President, General Counsel and Secretary

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