Updating form 10 1 5 10 2

29-Dec-2015 15:01

The Company has reviewed hundreds of customer contracts and thousands of individual revenue transactions to determine whether revenue related to these contracts and transactions was recognized in accordance with U. Specifically, the misstatement in the application of U. GAAP rules regarding the timing of revenue recognition that have been identified to date primarily relate to: (i) transactions, principally in , in which we recognized revenue when the product shipped to the distributor, but we contractually retained title in the products until the distributor paid for the products in full or the distributor was not obligated to pay us until the products were sold through to the end-user; (ii) "bill and hold" transactions, principally in , which did not meet the criteria for revenue recognition under U. GAAP; and (iii) other transactions, in which we recognized revenue prior to full satisfaction of all contractual criteria for title and risk of loss passing to the customer. As of March 1, 2016, the daily effective federal funds rate (EFFR) is a volume-weighted median of transaction-level data collected from depository institutions in the Report of Selected Money Market Rates (FR 2420). Thus the rates published after September 19, 2008, likely reflect the direct or indirect effects of the new temporary programs and, accordingly, likely are not comparable for some purposes to rates published prior to that period. Rate posted by a majority of top 25 (by assets in domestic offices) insured U. Prime is one of several base rates used by banks to price short-term business loans. The rate charged for discounts made and advances extended under the Federal Reserve's primary credit discount window program, which became effective January 9, 2003. Yields on Treasury inflation protected securities (TIPS) adjusted to constant maturities. Yields on Treasury nominal securities at “constant maturity” are interpolated by the U. Treasury from the daily yield curve for non-inflation-indexed Treasury securities.Prior to March 1, 2016, the EFFR was a volume-weighted mean of rates on brokered trades. Weekly figures are averages of 7 calendar days ending on Wednesday of the current week; monthly figures include each calendar day in the month. This rate replaces that for adjustment credit, which was discontinued after January 8, 2003. The rate reported is that for the Federal Reserve Bank of New York. This curve, which relates the yield on a security to its time to maturity, is based on the closing market bid yields on actively traded Treasury securities in the over-the-counter market.The Company will pay or cause to be paid the Third Extension Fee to the consenting holders of the Notes on , 20 (and each of the quarters in 20), and would not be able to file the 2015 Form 10-K until this analysis was completed.Over the past four months, the Company has worked diligently to complete this analysis as promptly as practicable. During this review, we determined that, in fiscal years 20 and the first three quarters of fiscal year 2015, we had incorrectly recorded the timing of recognition of certain revenue transactions for such periods.Similarly, yields on inflation-indexed securities at “constant maturity” are interpolated from the daily yield curve for Treasury inflation protected securities in the over-the-counter market.

The 30-year Treasury constant maturity series was discontinued on February 18, 2002, and reintroduced on February 9, 2006. The constant maturity yield values are read from the yield curve at fixed maturities, currently 1, 3, and 6 months and 1, 2, 3, 5, 7, 10, 20, and 30 years.From February 18, 2002, to February 9, 2006, the U. Treasury published a factor for adjusting the daily nominal 20-year constant maturity in order to estimate a 30-year nominal rate. This method provides a yield for a 10-year maturity, for example, even if no outstanding security has exactly 10 years remaining to maturity.