VRSN » Topics » Major Customers

This excerpt taken from the VRSN 10-Q filed May 8, 2009.

Major Customers

One customer accounted for approximately 14% and 12% of the Company’s revenues from continuing operations during the three months ended March 31, 2009 and 2008 respectively. No customer accounted for 10% or more of accounts receivable at March 31, 2009, and December 31, 2008.

This excerpt taken from the VRSN 10-K filed Mar 3, 2009.

Major Customers

 

One customer accounted for approximately 13% and 10% of revenues from continuing operations in 2008 and 2007, respectively and no customer accounted for 10% or more of revenues from continuing operations in 2006. No customer accounted for 10% or more of accounts receivable in 2008, 2007 or 2006.

 

 

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

 

DECEMBER 31, 2008, 2007 AND 2006

 

This excerpt taken from the VRSN 10-K filed Feb 29, 2008.

Major Customers

 

No customer accounted for 10% or more of consolidated revenues or accounts receivable in 2007, 2006 or 2005.

 

This excerpt taken from the VRSN 8-K filed Nov 5, 2007.

Major Customers

No customer accounted for 10% or more of consolidated revenues or accounts receivable in 2006, 2005 or 2004.

This excerpt taken from the VRSN 10-K filed Jul 12, 2007.

Major Customers

 

No customer accounted for 10% or more of consolidated revenues or accounts receivable in 2006, 2005 or 2004.

 

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This excerpt taken from the VRSN 10-K filed Mar 13, 2006.

Major Customers

 

No customer accounted for 10% or more of consolidated revenues or accounts receivable in 2005, 2004 or 2003.

 

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

 

DECEMBER 31, 2005, 2004 AND 2003

 

This excerpt taken from the VRSN 10-Q filed Nov 9, 2005.

Major Customers

 

No customer accounted for 10% or more of consolidated revenues for the three or nine months ended September 30, 2005 or 2004.

 

This excerpt taken from the VRSN 10-Q filed May 10, 2005.

Major Customers

 

No customer accounted for 10% or more of consolidated revenues for the three months ended March 31, 2005 and 2004.

 

Note 11. Income Taxes

 

For the three months ended March 31, 2005, VeriSign recorded income tax expense of $26.4 million. For the three months ended March 31, 2004, VeriSign recorded income tax expense of $6.6 million. VeriSign has not recorded a benefit for U.S. federal and state deferred tax assets due to the uncertainty of their realization.

 

In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of deferred tax assets will not be realized. The realization of deferred tax assets is based on several factors, including the Company’s past earnings and the scheduling of deferred tax liabilities and projected income from operating activities. Management does not believe it is more likely than not that the deferred tax assets relating to U.S. federal and state operations are realizable. The amount of the deferred tax asset considered realizable, however, will be increased in the near future if the Company continues to accumulate additional positive evidence in future periods that will be sufficient to indicate it is more likely than not that the deferred tax asset will be realized.

 

VeriSign follows FASB Interpretation (“FIN”) No. 18, “Accounting for Income Taxes in Interim Periods,” and APB 28, “Interim Financial Reporting” for its quarterly income tax provision. Accordingly, management’s guidance regarding the effects of the realizability of the deferred tax assets on continuing operations, goodwill, and additional paid-in capital remain materially unchanged from the guidance provided in Note 13, “Income Taxes,” in VeriSign’s Form 10-K for the year ended December 31, 2004. As such, if the valuation allowance relating to deferred tax assets were released as of December 31, 2004, approximately $240.7 million would be credited to the statement of operations, $268.6 million would be credited to additional paid-in capital, and $5.4 million would be credited to goodwill. However, management would continue to apply a valuation allowance of $33.4 million to the deferred tax asset for capital loss carryforwards, and $48.9 million to the deferred tax asset relating to the write-down of investments, due to the limited carryover life of such tax attributes.

 

Note 12. Network Solutions and International Affiliates

 

VeriSign retained a 15% interest in Network Solutions domain name registrar business after the sale to Pivotal Private Equity on November 25, 2003. Through November 25, 2003, Network Solutions purchased certain products and services from the Company and these intercompany revenues were eliminated in the Company’s consolidated financial statements through that date. VeriSign recognized $10.1 million and $11.6 million from Network Solutions as a customer during the three months ended March 31, 2005 and 2004, respectively.

 

As part of the consideration for the Company’s sale of its Network Solutions domain name registrar business on November 25, 2003, VeriSign received a $40 million senior subordinated note that bears interest at 7% per annum for the first three years and 9% per annum thereafter and matures five years from the date of closing. During the three months ended March 31, 2005, VeriSign received a payment from Network Solutions in the amount of $20.0 million, which included $14.0 million to reduce the principal balance of the note receivable, $3.8 million of interest income related to the note receivable and a dividend payment of $2.2 million recorded in other income. The remaining principal and interest are due upon maturity. The present value of the note at March 31, 2005 was approximately $24.6 million using a 10% market interest rate.

 

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

 

In addition to the above, VeriSign recognized revenues totaling $2.1 and $2.5 million for the three months ended March 31, 2005 and 2004, respectively, from customers, including VeriSign Affiliates, in which it holds an equity investment.

 

Note 13. Resolution of Tariff Dispute

 

During the three months ended March 31, 2005, VeriSign completed a settlement of litigation with a telecommunications carrier, resolving disputes over certain tariff charges for SS7 traffic that VeriSign passed through to telecommunications carriers who purchased its SS7 services. Under the settlement, the carrier refunded and/or credited certain amounts to VeriSign and VeriSign refunded and/or credited certain amounts to its customers. As a result of the settlement, VeriSign recorded other income of approximately $6.0 million during the three months ended March 31, 2005.

 

Note 14. Foreign Currency and Hedging Instruments

 

VeriSign conducts business throughout the world and transacts in multiple foreign currencies. As VeriSign continues to expand its international operations, the Company is increasingly exposed to foreign currency risks. In the fourth quarter of 2003, VeriSign initiated a foreign currency risk management program designed to mitigate foreign exchange risks associated with the monetary assets and liabilities of its operations that are denominated in non-functional currencies. The primary objective of this hedging program is to minimize the gains and losses resulting from fluctuations in exchange rates. The Company does not enter into foreign currency transactions for trading or speculative purposes, nor does it hedge foreign currency exposures in a manner that entirely offsets the effects of changes in exchange rates. The program may entail the use of forward or option contracts and in each case these contracts are limited to a duration of less than 12 months.

 

At March 31, 2005, VeriSign held forward contracts in notional amounts totaling approximately $75.4 million to mitigate the impact of exchange rate fluctuations associated with certain foreign currencies. All hedge contracts were recorded at fair market value on the balance sheet and in earnings at year end 2004 and for the first three months of 2005. The Company attempts to limit its exposure to credit risk by executing foreign exchange contracts with high-quality financial institutions.

 

Note 15. Recent Accounting Pronouncements

 

In December 2004, the FASB issued SFAS No. 123R, “Share-Based Payment,” which requires the measurement of all employee share-based payments to employees, including grants of employee stock options, using a fair-value-based method and the recording of such expense in their consolidated statements of operations. The accounting provisions of SFAS 123R are effective for fiscal years beginning after June 15, 2005. VeriSign is required to adopt SFAS 123R in the first quarter of 2006. The pro forma disclosures previously permitted under SFAS 123 no longer will be an alternative to financial statement recognition. See Note 2, “Stock Compensation Plans and Unearned Compensation” above for further information regarding the pro forma net income (loss) and net income (loss) per share amounts, for the three months ended March 31, 2005 and 2004, as if VeriSign had used a fair-value-based method similar to the methods required under SFAS 123R to measure compensation expense for employee stock incentive awards. Although the Company has not yet determined whether the adoption of SFAS 123R will result in amounts that are similar to the current pro forma disclosures under SFAS 123, VeriSign is evaluating the requirements under SFAS 123R and expects the adoption to have a significant adverse impact on their consolidated statements of operations and net income per share.

 

In December 2004, the FASB issued FASB Staff Position No. FAS 109-1 (“FAS 109-1”), Application of FASB Statement No. 109, “Accounting for Income Taxes,” to the Tax Deduction on Qualified Production Activities Provided by the American Jobs Creation Act of 2004.” The American Jobs Creation Act (“AJCA”) introduces a special 9% tax deduction on qualified production activities. FAS 109-1 clarifies that this tax deduction should be accounted for as a special tax deduction in accordance with SFAS 109. Pursuant to the

 

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

 

AJCA, VeriSign will not be able to claim this tax benefit until the first quarter of fiscal 2006. The Company does not expect the adoption of these new tax provisions to have a material impact on their condensed consolidated financial position, results of operations or cash flows.

 

In December 2004, the FASB issued FASB Staff Position No. FAS 109-2 (“FAS 109-2”), “Accounting and Disclosure Guidance for the Foreign Earnings Repatriation Provision within the American Jobs Creations Act of 2004.” The AJCA introduces a limited time 85% dividends received deduction on the repatriation of certain foreign earnings to a U.S. taxpayer (repatriation provision), provided certain criteria are met. FAS 109-2 provides accounting and disclosure guidance for the repatriation provision. The Company does not expect the adoption of these new tax provisions to have a material impact on their condensed consolidated financial position, results of operations or cash flows.

 

Note 16. Subsequent Events

 

On April 6, 2005, VeriSign completed its acquisition of LightSurf Technologies, Inc. (“LightSurf”), a Santa Cruz, California-based privately held provider of multimedia messaging and interoperability solutions for the wireless market. VeriSign paid approximately $270 million in common stock for all of the outstanding capital stock, warrants and vested options of LightSurf. VeriSign also assumed all unvested stock options and paid certain transaction-related expenses of LightSurf.

 

On April 25, 2005, VeriSign announced it had executed a definitive asset purchase agreement with Lightbridge, Inc. to acquire Lightbridge’s Intelligent Network Solutions technology platform and related customer base for approximately $17 million in cash. The transaction is subject to customary closing conditions and is expected to close during the second quarter of 2005.

 

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

This excerpt taken from the VRSN 10-K filed Mar 16, 2005.

Major Customers

 

No customer accounted for 10% or more of consolidated revenues in 2004, 2003 or 2002.

 

Note 17. Network Solutions and International Affiliates

 

VeriSign retained a 15% interest in Network Solutions domain name registrar business after the sale to Pivotal Private Equity on November 25, 2003. Through November 25, 2003, Network Solutions purchased certain products and services from the Company and these intercompany revenues were eliminated in the Company’s consolidated financial statements through that date. VeriSign recognized $43.5 million and $3.9 million from Network Solutions as a customer in 2004 and 2003, respectively.

 

As consideration for the Company’s sale of its Network Solutions domain name registrar business on November 25, 2003, VeriSign received a $40 million senior subordinated note that bears interest at 7% per annum for the first three years and 9% per annum thereafter and matures five years from the date of closing. The principal and interest are due upon maturity. This note is subordinated to a term loan made by ABLECO Finance to the Network Solutions business in the principal amount of approximately $40 million as of the closing date. The present value of the note at December 31, 2004 was approximately $40.0 million using a 10% market interest rate.

 

In addition to the above, VeriSign recognized revenues totaling $8.1 million in 2004, $10.3 million in 2003, and $27.1 million in 2002 from customers, including VeriSign Affiliates, in which it holds an equity investment.

 

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

 

DECEMBER 31, 2004, 2003 AND 2002

 

Note 18. Subsequent Events

 

On January 10, 2005, VeriSign announced that it had executed a definitive agreement to acquire LightSurf Technologies, Inc. (“LightSurf”). Under the terms of the agreement, VeriSign agreed to issue shares of its Common Stock having a value of approximately $270 million for all of the outstanding capital stock, warrants and vested options of LightSurf and to pay certain transaction-related expenses of LightSurf. In addition, VeriSign will assume all unvested stock options of LightSurf. LightSurf is a leading privately held provider of multimedia messaging and interoperability solutions for the wireless market. The transaction is subject to certain closing conditions, including the issuance of a permit from the California Department of Corporations. The transaction is anticipated to close by the end of the first quarter of 2005.

 

In the first quarter of 2005, VeriSign completed a settlement of litigation with a telecommunications carrier, resolving disputes over certain tariff charges for SS7 traffic that VeriSign passed through to telecommunications carriers who purchased its SS7 services. Under the settlement, the carrier refunded and/or credited certain amounts to VeriSign and VeriSign refunded and/or credited certain amounts to its customers. As a result of the settlement, VeriSign will record a reduction in cost of revenues of approximately $5 million in the first quarter of 2005.

 

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"Major Customers" elsewhere:

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