These adjustments reconcile the Company's GAAP results of operations to the reported non-GAAP results of operations. The Company believes that presentation of net income and net income per share excluding equity-based compensation, amortization of intangible assets, acquired in-process research and development, integration and acquisition expenses in connection with the acquisition of Chipidea provides meaningful supplemental information to investors, as well as management that is indicative of the Company's ongoing operating results and facilitates comparison of operating results across reporting periods. The Company uses these non-GAAP measures when evaluating its financial results as well as for internal planning and budgeting purposes. These non-GAAP measures should not be viewed as a substitute for the Company's GAAP results, and may be different than non-GAAP measures used by other companies.
(g) This adjustment reflects the equity-based compensation expense related to the Company's adoption of SFAS No. 123 revised (SFAS 123R). For the nine months ending March 31, 2009, $3.6 million of equity-based compensation was allocated as follows: $1.1 million to research and development, $1.1 million to sales and marketing and $1.4 million to general and administrative. For the nine months ending March 31, 2008, $6.3 million equity-based compensation expense was allocated as follows: $2.3 million to research and development, $1.9 million to sales and marketing and $2.1 million to general and administrative. Management believes that it is useful to investors to understand how the expenses associated with the adoption of SFAS 123R are reflected in net income.
(h) This adjustment reflects the expense related to the amortization of intangibles acquired in connection with the acquisition of Chipidea included in operating expenses. For the nine months ending March 31, 2009, $3.2 million of amortization expense related to these intangible assets was allocated as follows: $3.0 million to cost of sales, $22,000 to research and development and $170,000 to sales and marketing. For the nine months ending March 31, 2008, $5.6 million of amortization expense related to these intangible assets was allocated as follows: $5.3 million to cost of sales, $17,000 to research and development and $291,000 to sales and marketing.
(i) This adjustment reflects the amortization expense related to the amount held in escrow and payable to the founders of Chipidea in connection with the acquisition of Chipidea. For the nine months ending March 31, 2009, this adjustment also reflects legal fees incurred in association with certain financing activities and amortization of loan origination fees. For the nine months ending March 31, 2009, $3.5 million was expensed related to the escrow amount payable to the founders of Chipidea and was allocated as follows: $0.4 million to general and administrative and $3.1 million to research and development. For the nine months ending March 31, 2008, $4.0 million was expensed related to the escrow amount payable to the founders of Chipidea and was allocated as follows: $1.3 million to general and administrative and $2.7 million to research and development. In addition, legal fees of $0.3 million were expensed to general and administrative related to certain financing activities and $1.5 million was expensed to other expenses related to the amortization of loan origination fees.
(j) This adjustment reflects integration expense related to the acquisition of Chipidea recorded in accounting and legal expense under general and administrative.
(k) This adjustment reflects acquired in-process research and development expense related to the acquisition of Chipidea.
(l) This adjustment reflects restructuring expense related to reduction in workforce and facilities exit costs.
(m) This adjustment reflects the non-GAAP tax adjustment due to the adjustments described above.
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