-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, FlNeK28op7s1nzO2GVYpJkcC4SmTqtG4yMuLlTcpqYv2NyMdThXf4ab8sdApzWR3 bduVOU4LuthbUEy5RI6spw== 0001193125-09-187772.txt : 20090904 0001193125-09-187772.hdr.sgml : 20090904 20090904160101 ACCESSION NUMBER: 0001193125-09-187772 CONFORMED SUBMISSION TYPE: 10-Q/A PUBLIC DOCUMENT COUNT: 16 CONFORMED PERIOD OF REPORT: 20090630 FILED AS OF DATE: 20090904 DATE AS OF CHANGE: 20090904 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AKAMAI TECHNOLOGIES INC CENTRAL INDEX KEY: 0001086222 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-BUSINESS SERVICES, NEC [7389] IRS NUMBER: 043432319 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q/A SEC ACT: 1934 Act SEC FILE NUMBER: 000-27275 FILM NUMBER: 091056274 BUSINESS ADDRESS: STREET 1: 8 CAMBRIDGE CENTER CITY: CAMBRIDGE STATE: MA ZIP: 02142 BUSINESS PHONE: 6174443000 MAIL ADDRESS: STREET 1: 8 CAMBRIDGE CENTER CITY: CAMBRIDGE STATE: MA ZIP: 02142 10-Q/A 1 d10qa.htm AMENDMENT TO FORM 10-Q Amendment to Form 10-Q

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

Form 10-Q/A

 

 

Amendment No. 1

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2009

or

 

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

For the transition period from                      to                     

Commission file number 0-27275

 

 

Akamai Technologies, Inc.

(Exact name of registrant as specified in its charter)

 

Delaware   04-3432319

(State or other jurisdiction of

incorporation or organization)

 

(I.R.S. Employer

Identification Number)

8 Cambridge Center

Cambridge, MA 02142

(617) 444-3000

(Address, Including Zip Code, and Telephone Number,

Including Area Code, of Registrant’s Principal Executive Offices)

 

 

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”) during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer  x    Accelerated filer  ¨    Non-accelerated filer  ¨    Smaller reporting company  ¨
     

(Do not check if a smaller

reporting company)

  

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x

The number of shares outstanding of the registrant’s common stock as of August 5, 2009: 172,401,167 shares.

 

 

 


EXPLANATORY NOTE

The sole purpose of this Amendment No. 1 to our Quarterly Report on Form 10-Q for the period ended June 30, 2009, as originally filed with the Securities and Exchange Commission on August 10, 2009, is to furnish Exhibit 101 to the Form 10-Q in accordance with Rule 405 of Regulation S-T.

Exhibit 101 provides the following financial information from Akamai Technologies, Inc.’s Form 10-Q for the quarter ended June 30, 2009, formatted in eXtensible Business Reporting Language (XBRL):

(i) Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2009 and 2008

(ii) Condensed Consolidated Balance Sheets at June 30, 2009 and December 31, 2008

(iii) Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2009 and 2008

(iv) Notes to Condensed Consolidated Financial Statements

No other changes have been made to the original Form 10-Q. This Form 10-Q/A speaks as of the original filing date and has not been updated to reflect events occurring subsequent to the original filing date.

Pursuant to Rule 406T of Regulation S-T, the interactive data files on Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of sections 11 and 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of section 18 of the Securities and Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.

 

Item 6. Exhibits

The exhibits filed as part of this Form 10-Q/A are listed in the exhibit index immediately preceding the exhibits and are incorporated herein.


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 thereunto duly authorized.

 

    Akamai Technologies, Inc.
September 4, 2009     By:   /s/    J. DONALD SHERMAN        
        J. Donald Sherman
        Chief Financial Officer


EXHIBIT INDEX

 

10.1(1)   Form of Incentive Stock Option Agreement for use under the 2009 Stock Incentive Plan
10.2(1)   Form of Non-Qualified Stock Option Agreement for use under the 2009 Stock Incentive Plan
10.3(1)   Form of Time-Based Vesting Restricted Stock Unit Agreement for use under the 2009 Stock Incentive Plan
10.4(1)   Form of Time-Based Vesting Restricted Stock Unit Agreement for Executives for use under the 2009 Stock Incentive Plan
10.5(1)   Form of Three-Year Performance-Based Vesting Restricted Stock Unit Agreement for use under the 2009 Stock Incentive Plan
10.6(1)   Form of Deferred Stock Unit Agreement for Directors for use under the 2009 Stock Incentive Plan
10.7(2)   2009 Akamai Technologies, Inc. Stock Incentive Plan
Exhibit 31.1(3)   Certification of Chief Executive Officer pursuant to Rule 13a-14(a)/ Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended
Exhibit 31.2(3)   Certification of Chief Financial Officer pursuant to Rule 13a-14(a)/ Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended
Exhibit 32.1(3)   Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
Exhibit 32.2(3)   Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS   XBRL Instance Document.**
101.SCH   XBRL Taxonomy Extension Schema Document.**
101.CAL   XBRL Taxonomy Calculation Linkbase Document.**
101.LAB   XBRL Taxonomy Label Linkbase Document.**
101.PRE   XBRL Taxonomy Presentation Linkbase Document.**

 

(1) Filed as an exhibit to the Company’s Current Report on Form 8-K as filed with the Securities and Exchange Commission on May 26, 2009.

 

(2) Filed as Exhibit 99.1 to the Company’s Registration Statement on Form S-8 as filed with the Securities and Exchange Commission on May 19, 2009 (File No. 333-159340).

 

(3) Previously filed.

 

** submitted electronically herewith

Attached as Exhibit 101 to this report are the following formatted in XBRL (Extensible Business Reporting Language): (i) Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2009 and June 30, 2008, (ii) Condensed Consolidated Balance Sheets at June 30, 2009 and December 31, 2008, (iii) Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2009 and June 30, 2008 and (iv) Notes to Condensed Consolidated Financial Statements.

In accordance with Rule 406T of Regulation S-T, the XBRL-related information in Exhibit 101 to this Quarterly Report on Form 10-Q is deemed not filed or part of a registration statement or prospectus for purposes of sections 11 or 12 of the Securities Act, is deemed not filed for purposes of section 18 of the Exchange Act, and otherwise is not subject to liability under these sections.

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The complaints are similar and allege violations of the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended, primarily based on the allegation that the underwriters received undisclosed compensation in connection with the Company&#8217;s initial public offering. On April&#160;19, 2002, a single consolidated amended complaint was filed, reiterating in one pleading the allegations contained in the previously filed separate actions. The consolidated amended complaint defines the alleged class period as October&#160;28, 1999 through December&#160;6, 2000. A Special Litigation Committee of the Company&#8217;s Board of Directors authorized management to negotiate a settlement of the pending claims substantially consistent with a Memorandum of Understanding that was negotiated among class plaintiffs, all issuer defendants and their insurers. The parties negotiated a settlement that was subject to approval by the Court. On February&#160;15, 2005, the Court issued an Opinion and Order preliminarily approving the settlement, provided that the defendants and plaintiffs agree to a modification narrowing the scope of the bar order set forth in the original settlement agreement. The parties agreed to a modification narrowing the scope of the bar order, and on August&#160;31, 2005, the Court issued an order preliminarily approving the settlement. On December&#160;5, 2006, the U.S. Court of Appeals for the Second Circuit overturned the District Court&#8217;s certification of the class of plaintiffs who are pursuing the claims that would be settled in the settlement against the underwriter defendants. Thereafter, the District Court ordered a stay of all proceedings in all of the lawsuits pending the outcome of plaintiffs&#8217; petition to the Second Circuit for rehearing en banc and resolution of the class certification issue. On</font> <font face="Times New Roman" size="2">April&#160;6, 2007, the Second Circuit denied plaintiffs&#8217; rehearing petition, but clarified that the plaintiffs may seek to certify a more limited class in the District Court. On June&#160;25, 2007, the District Court signed an order terminating the settlement. On April&#160;2, 2009, the plaintiffs filed a motion for preliminary approval of a new proposed settlement among plaintiffs, the underwriter defendants, the issuer defendants and the insurers for the issuer defendants. The Company believes that it has meritorious defenses to the claims made in the complaint, and it intends to contest the lawsuit vigorously. An adverse resolution of this action could have a material adverse effect on its financial condition and results of operations in the period in which the lawsuit is resolved. The Company is not presently able to estimate potential losses, if any, related to this lawsuit.</font></p> <p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px; TEXT-INDENT: 4%"> <font face="Times New Roman" size="2">In addition, on or about October&#160;3, 2007, a purported Akamai shareholder filed a complaint in the U.S. District Court for the Western District of Washington, against the underwriters involved in its 1999 initial public offering of common stock, alleging violations of Section&#160;16(b) of the Exchange Act. The complaint alleges that the combined number of shares of the Company&#8217;s common stock beneficially owned by the lead underwriters and certain unnamed officers, directors and principal shareholders exceeded ten percent of its outstanding common stock from the date of the Company&#8217;s initial public offering on October&#160;29, 1999, through at least October&#160;28, 2000. The complaint further alleges that those entities and individuals were thus subject to the reporting requirements of Section&#160;16(a) and the short-swing trading prohibition of Section&#160;16(b) and failed to comply with those provisions. The complaint seeks to recover from the lead underwriters any &#8220;short-swing profits&#8221; obtained by them in violation of Section&#160;16(b). Akamai was named as a nominal defendant in the action but has no liability for the asserted claims. None of the Company&#8217;s directors or officers serving in such capacities at the time of its initial public offering are currently named as defendants in this action, but there can be no guarantee that the complaint will not be amended or a new complaint or suit filed to name such directors or officers as defendants in this action or another action alleging a violation of the same provisions of the Securities Exchange Act of 1934, as amended. On March&#160;12, 2009, the Court granted a joint motion by the Company and other issuer defendants to dismiss the complaint without prejudice on the grounds that Ms.&#160;Simmonds had failed to make an adequate demand on the Company prior to filing her complaint. In its order, the Court stated it would not permit Ms.&#160;Simmonds to amend her demand letters while pursuing her claims in the litigation. Because the Court dismissed the case on the grounds that it lacked subject matter jurisdiction, it did not specifically reach the issue of whether Ms.&#160;Simmonds&#8217; claims were barred by the applicable statute of limitations. However, the Court also granted a Joint Motion to Dismiss by the underwriter defendants in the action with respect to cases involving non-moving issuers, holding that the cases were barred by the applicable statute of limitations because the issuers&#8217; shareholders had notice of the potential claims more than five years prior to filing suit. Ms.&#160;Simmonds filed a Notice of Appeal on April&#160;10, 2009. The Company does not expect the results of this action to have a material adverse effect on its business, results of operations or financial condition.</font></p> <p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px; TEXT-INDENT: 4%"> <font face="Times New Roman" size="2">The Company is party to various other litigation matters that management considers routine and incidental to its business. 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Conversely, holders of the 1% convertible senior notes may require the Company to repurchase all or a portion of such notes at 100% of the principal amount plus</font> <font face="Times New Roman" size="2">accrued and unpaid interest on certain specified dates beginning on December&#160;15, 2010. In the event of a change of control of the Company, the holders may require Akamai to repurchase all or a portion of such 1% convertible senior notes at a repurchase price of 100% of the principal amount plus accrued and unpaid interest. Interest on the 1% convertible senior notes began to accrue as of the issue date and is payable semiannually on June&#160;15 and December&#160;15 of each year. The 1% convertible senior notes are senior unsecured obligations and are the same rank as all existing and future senior unsecured indebtedness of Akamai. The 1% convertible senior notes rank senior to all of the Company&#8217;s subordinated indebtedness. 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No authoritative reference available. false false 1 5 false UnKnown UnKnown UnKnown false true XML 10 R5.xml IDEA: Notes to Financial Statements 1.0.0.3 false Notes to Financial Statements false 1 $ false false Shares Standard http://www.xbrl.org/2003/instance shares 0 USD Standard http://www.xbrl.org/2003/iso4217 USD iso4217 0 USDperShareItemType Divide http://www.xbrl.org/2003/iso4217 USD iso4217 http://www.xbrl.org/2003/instance shares 0 2 0 akam_NotesToFinancialStatementsAbstract akam false na duration string No definition available. false false false false false true false false false 1 false false 0 0 false false No definition available. false 3 1 us-gaap_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock us-gaap true na duration string No definition available. false false false false false false false false false 1 false false 0 0 <div> <p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font face= "Times New Roman" size="2"><b>1. Nature of Business and Basis of Presentation</b></font></p> <p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px; TEXT-INDENT: 4%"> <font face="Times New Roman" size="2">Akamai Technologies, Inc. (&#8220;Akamai&#8221; or the &#8220;Company&#8221;) provides services for accelerating and improving the delivery of content and applications over the Internet. Akamai&#8217;s globally distributed platform comprises thousands of servers in hundreds of networks in approximately 70 countries. The Company was incorporated in Delaware in 1998 and is headquartered in Cambridge, Massachusetts. Akamai currently operates in one industry segment: providing services for accelerating and improving delivery of content and applications over the Internet.</font></p> <p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px; TEXT-INDENT: 4%"> <font face="Times New Roman" size="2">The accompanying interim consolidated financial statements are unaudited and have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information. These financial statements include the accounts of Akamai and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated in the accompanying financial statements.</font></p> <p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px; TEXT-INDENT: 4%"> <font face="Times New Roman" size="2">Certain information and footnote disclosures normally included in the Company&#8217;s annual audited consolidated financial statements and accompanying notes have been condensed or omitted in these interim financial statements. Accordingly, the unaudited consolidated financial statements included herein should be read in conjunction with the audited consolidated financial statements and accompanying notes included in Akamai&#8217;s annual report on Form 10-K for the year ended December&#160;31, 2008, filed with the Securities and Exchange Commission on March&#160;2, 2009.</font></p> <p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px; TEXT-INDENT: 4%"> <font face="Times New Roman" size="2">The results of operations presented in this quarterly report on Form 10-Q are not necessarily indicative of the results of operations that may be expected for any future periods. In the opinion of management, these unaudited consolidated financial statements include all adjustments and accruals, consisting only of normal recurring adjustments, that are necessary for a fair statement of the results of all interim periods reported herein.</font></p> <p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px; TEXT-INDENT: 4%"> <font face="Times New Roman" size="2">The Company evaluated subsequent events through August&#160;10, 2009, the date it filed its report on Form 10-Q for the quarter ended June&#160;30, 2009 with the Securities and Exchange Commission, and had no material subsequent events to report.</font></p> </div> 1. Nature of Business and Basis of Presentation Akamai Technologies, Inc. (&#8220;Akamai&#8221; or the &#8220;Company&#8221;) provides services for false false No definition available. No authoritative reference available. false 4 1 us-gaap_ScheduleOfNewAccountingPronouncementsAndChangesInAccountingPrinciplesTextBlock us-gaap true na duration string No definition available. false false false false false false false false false 1 false false 0 0 <div> <p style="MARGIN-TOP: 18px; MARGIN-BOTTOM: 0px"><font face= "Times New Roman" size="2"><b>2. Recent Accounting Pronouncements</b></font></p> <p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px; TEXT-INDENT: 4%"> <font face="Times New Roman" size="2">On January&#160;1, 2009, the Company adopted Financial Accounting Standards Board (&#8220;FASB&#8221;) Staff Position 157-2, &#8220;Effective Date of FASB Statement No.&#160;157&#8221; (&#8220;FSP 157-2&#8221;). 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MARGIN-BOTTOM: 0px; TEXT-INDENT: 4%"> <font face="Times New Roman" size="2">Aggregate expense related to amortization of other intangible assets for the three months ended June&#160;30, 2009 and 2008 was $4.2 million and $3.5 million, respectively. For the six months ended June&#160;30, 2009 and 2008, aggregate expense related to amortization of other intangible assets was $8.5 million and $7.1 million, respectively. Based on the Company&#8217;s other intangible assets as of June&#160;30, 2009, aggregate expense related to amortization of other intangible assets is expected to be $8.2 million for the remainder of 2009, and $16.4 million, $16.4 million, $15.4 million and $12.6 million for fiscal years 2010, 2011, 2012 and 2013, respectively.</font></p> </div> 10. Goodwill and Other Intangible Assets The Company recorded goodwill and other intangible assets as a result of business acquisitions that occurred from false false No definition available. No authoritative reference available. false 13 1 us-gaap_ConcentrationRiskDisclosureTextBlock us-gaap true na duration string No definition available. false false false false false false false false false 1 false false 0 0 <div> <p style="MARGIN-TOP: 18px; MARGIN-BOTTOM: 0px"><font face= "Times New Roman" size="2"><b>11. Concentration of Credit Risk</b></font></p> <p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px; TEXT-INDENT: 4%"> <font face="Times New Roman" size="2">Financial instruments that subject the Company to credit risk consist of cash and cash equivalents, marketable securities and accounts receivable. The Company maintains the majority of its cash, cash equivalents and marketable securities balances principally with domestic financial institutions that the Company believes are of high credit standing.</font></p> <p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px; TEXT-INDENT: 4%"> <font face="Times New Roman" size="2">At June&#160;30, 2009 and December&#160;31, 2008, the Company held ARS, with an estimated fair value of $247.1 million and $237.0 million, respectively, that have experienced failed auctions, which have prevented the Company from liquidating those investments. As a result, the Company has classified these investments as long-term marketable securities on its consolidated balance sheet as of June&#160;30, 2009. Based on its ability to access its cash and short-term investments and its expected cash flows, the Company does not anticipate the current lack of liquidity with respect to these ARS to have a material impact on its financial condition or results of operations during 2009. As of June&#160;30, 2009, the Company had recorded a pre-tax cumulative unrealized loss of $23.2 million related to the temporary impairment of the ARS, which was included in accumulated other comprehensive loss on its consolidated balance sheet. See Note 4.</font></p> <p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px; TEXT-INDENT: 4%"> <font face="Times New Roman" size="2">Concentrations of credit risk with respect to accounts receivable are limited to certain customers to which the Company makes substantial sales. The Company&#8217;s customer base consists of a large number of geographically dispersed customers diversified across numerous industries. To reduce risk, the Company routinely assesses the financial strength of its customers. Based on such assessments, the Company believes that its accounts receivable credit risk exposure is limited. No customer accounted for 10% or more of accounts receivable as of June&#160;30, 2009 or as of December&#160;31, 2008. The Company believes that, at June&#160;30,&#160;2009, concentration of credit risk related to accounts receivable is not significant.</font></p> </div> 11. Concentration of Credit Risk Financial instruments that subject the Company to credit risk consist of cash and cash equivalents, marketable securities and false false No definition available. No authoritative reference available. false 14 1 akam_ConvertibleSeniorDebenturesDisclosureTextBlock akam false na duration string No definition available. false false false false false false false false false 1 false false 0 0 <div> <p style="MARGIN-TOP: 18px; MARGIN-BOTTOM: 0px"><font face= "Times New Roman" size="2"><b>12. 1% Convertible Senior Notes</b></font></p> <p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px; TEXT-INDENT: 4%"> <font face="Times New Roman" size="2">As of June&#160;30, 2009, the carrying amount and fair value of the Company&#8217;s 1% convertible senior notes were $199.9 million and $266.8 million, respectively. The initial, and current, conversion price of the 1% convertible senior notes is $15.45 per share (equivalent to 64.7249 shares of common stock per $1,000 principal amount of 1% convertible senior notes). The conversion price is subject to adjustment in certain events. 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Segment and Geographic Information</b></font></p> <p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px; TEXT-INDENT: 4%"> <font face="Times New Roman" size="2">Akamai&#8217;s chief decision-maker, as defined under SFAS No.&#160;131, &#8220;Disclosures About Segments of an Enterprise and Related Information,&#8221; (&#8220;SFAS No.&#160;131&#8221;) is the Chief Executive Officer and the executive management team. As of June&#160;30, 2009, Akamai operated in one industry segment: providing services for accelerating and improving the delivery of content and applications over the Internet. The Company is not organized by market and is managed and operated as one business. A single management team that reports to the Chief Executive Officer comprehensively manages the entire business. The Company does not operate any material separate lines of business or separate business entities with respect to its services. Accordingly, the Company does not accumulate discrete financial information with respect to separate product lines and does not have separately reportable segments as defined by SFAS No.&#160;131.</font></p> <p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px; TEXT-INDENT: 4%"> <font face="Times New Roman" size="2">The Company deploys its servers into networks worldwide. As of June&#160;30, 2009, the Company had $139.4 million and $35.3 million of property and equipment, net of accumulated depreciation, located in the United States and in foreign locations, respectively. As of December&#160;31, 2008, the Company had $138.6 million and $35.9 million of property and equipment, net of accumulated depreciation, located in the United States and in foreign locations, respectively. Akamai sells its services through a direct sales force and channel partners located both in the United States and certain foreign locations. For both the three and six months ended June&#160;30, 2009, approximately 28% of revenues were derived from the Company&#8217;s operations outside the United States, including 17% from Europe. For the three and six months ended June&#160;30, 2008, approximately 26% and 25% of revenues, respectively, was derived from the Company&#8217;s operations outside the United States, including 19% and 18%, respectively, from Europe during such periods. No single country outside the United States accounted for 10% or more of revenues during these periods. For the three and six months ended June&#160;30, 2009 and 2008, no customer accounted for 10% or more of total revenues.</font></p> </div> 13. Segment and Geographic Information Akamai&#8217;s chief decision-maker, as defined under SFAS No.&#160;131, &#8220;Disclosures About Segments of an false false No definition available. 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For the remainder of 2009 and for the years ending December&#160;31, 2010, 2011 and 2012, the minimum commitments pursuant to these contracts in effect as of June&#160;30, 2009, are $35.4 million, $19.3 million, $0.7 million and $0.3 million, respectively. 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The complaints are similar and allege violations of the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended, primarily based on the allegation that the underwriters received undisclosed compensation in connection with the Company&#8217;s initial public offering. On April&#160;19, 2002, a single consolidated amended complaint was filed, reiterating in one pleading the allegations contained in the previously filed separate actions. The consolidated amended complaint defines the alleged class period as October&#160;28, 1999 through December&#160;6, 2000. A Special Litigation Committee of the Company&#8217;s Board of Directors authorized management to negotiate a settlement of the pending claims substantially consistent with a Memorandum of Understanding that was negotiated among class plaintiffs, all issuer defendants and their insurers. The parties negotiated a settlement that was subject to approval by the Court. On February&#160;15, 2005, the Court issued an Opinion and Order preliminarily approving the settlement, provided that the defendants and plaintiffs agree to a modification narrowing the scope of the bar order set forth in the original settlement agreement. The parties agreed to a modification narrowing the scope of the bar order, and on August&#160;31, 2005, the Court issued an order preliminarily approving the settlement. On December&#160;5, 2006, the U.S. Court of Appeals for the Second Circuit overturned the District Court&#8217;s certification of the class of plaintiffs who are pursuing the claims that would be settled in the settlement against the underwriter defendants. Thereafter, the District Court ordered a stay of all proceedings in all of the lawsuits pending the outcome of plaintiffs&#8217; petition to the Second Circuit for rehearing en banc and resolution of the class certification issue. On</font> <font face="Times New Roman" size="2">April&#160;6, 2007, the Second Circuit denied plaintiffs&#8217; rehearing petition, but clarified that the plaintiffs may seek to certify a more limited class in the District Court. On June&#160;25, 2007, the District Court signed an order terminating the settlement. On April&#160;2, 2009, the plaintiffs filed a motion for preliminary approval of a new proposed settlement among plaintiffs, the underwriter defendants, the issuer defendants and the insurers for the issuer defendants. The Company believes that it has meritorious defenses to the claims made in the complaint, and it intends to contest the lawsuit vigorously. An adverse resolution of this action could have a material adverse effect on its financial condition and results of operations in the period in which the lawsuit is resolved. The Company is not presently able to estimate potential losses, if any, related to this lawsuit.</font></p> <p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px; TEXT-INDENT: 4%"> <font face="Times New Roman" size="2">In addition, on or about October&#160;3, 2007, a purported Akamai shareholder filed a complaint in the U.S. District Court for the Western District of Washington, against the underwriters involved in its 1999 initial public offering of common stock, alleging violations of Section&#160;16(b) of the Exchange Act. The complaint alleges that the combined number of shares of the Company&#8217;s common stock beneficially owned by the lead underwriters and certain unnamed officers, directors and principal shareholders exceeded ten percent of its outstanding common stock from the date of the Company&#8217;s initial public offering on October&#160;29, 1999, through at least October&#160;28, 2000. The complaint further alleges that those entities and individuals were thus subject to the reporting requirements of Section&#160;16(a) and the short-swing trading prohibition of Section&#160;16(b) and failed to comply with those provisions. The complaint seeks to recover from the lead underwriters any &#8220;short-swing profits&#8221; obtained by them in violation of Section&#160;16(b). Akamai was named as a nominal defendant in the action but has no liability for the asserted claims. None of the Company&#8217;s directors or officers serving in such capacities at the time of its initial public offering are currently named as defendants in this action, but there can be no guarantee that the complaint will not be amended or a new complaint or suit filed to name such directors or officers as defendants in this action or another action alleging a violation of the same provisions of the Securities Exchange Act of 1934, as amended. On March&#160;12, 2009, the Court granted a joint motion by the Company and other issuer defendants to dismiss the complaint without prejudice on the grounds that Ms.&#160;Simmonds had failed to make an adequate demand on the Company prior to filing her complaint. In its order, the Court stated it would not permit Ms.&#160;Simmonds to amend her demand letters while pursuing her claims in the litigation. Because the Court dismissed the case on the grounds that it lacked subject matter jurisdiction, it did not specifically reach the issue of whether Ms.&#160;Simmonds&#8217; claims were barred by the applicable statute of limitations. However, the Court also granted a Joint Motion to Dismiss by the underwriter defendants in the action with respect to cases involving non-moving issuers, holding that the cases were barred by the applicable statute of limitations because the issuers&#8217; shareholders had notice of the potential claims more than five years prior to filing suit. Ms.&#160;Simmonds filed a Notice of Appeal on April&#160;10, 2009. The Company does not expect the results of this action to have a material adverse effect on its business, results of operations or financial condition.</font></p> <p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px; TEXT-INDENT: 4%"> <font face="Times New Roman" size="2">The Company is party to various other litigation matters that management considers routine and incidental to its business. Management does not expect the results of any of these routine actions to have a material adverse effect on the Company&#8217;s business, results of operations or financial condition.</font></p> <p style="MARGIN-TOP: 18px; MARGIN-BOTTOM: 0px; MARGIN-LEFT: 2%"> <font face="Times New Roman" size= "2"><b><i>Guarantees</i></b></font></p> <p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px; TEXT-INDENT: 4%"> <font face="Times New Roman" size="2">The Company has identified guarantees in accordance with FASB Interpretation No.&#160;45 (&#8220;FIN 45&#8221;), &#8220;Guarantor&#8217;s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others&#8212;an interpretation of FASB Statements No.&#160;5, 57 and 107 and rescission of FASB Interpretation No.&#160;34.&#8221; FIN 45 elaborates on the existing disclosure requirements for most guarantees, including loan guarantees such as standby letters of credit. FIN 45 also clarifies that at the time an entity issues a guarantee, that entity must recognize an initial liability for the fair value, or market value, of the obligation it assumes under the guarantee and must disclose that information in its interim and annual financial statements. The Company evaluates losses for guarantees under SFAS No.&#160;5, &#8220;Accounting for Contingencies, as Interpreted by FIN 45.&#8221; The Company considers such factors as the degree of probability that the Company would be required to satisfy the liability associated with the guarantee and the ability to make a reasonable estimate of the amount of loss. To date, the Company has not encountered material costs as a result of such obligations and has not accrued any liabilities related to such obligations in its financial statements. The fair value of the Company&#8217;s outstanding guarantees as of June&#160;30, 2009 was determined to be immaterial.</font></p> </div> 15. 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No authoritative reference available. false 6 3 us-gaap_AllowanceForDoubtfulAccountsReceivableCurrent us-gaap true credit instant monetary No definition available. false false false false false false false false false 1 false true 16540000 16540 false false 2 false true 11270000 11270 false false No definition available. No authoritative reference available. false 7 3 us-gaap_RestrictedInvestmentsNoncurrent us-gaap true debit instant monetary No definition available. false false false false false false false false false 1 true true 153000 153 false false 2 true true 153000 153 false false No definition available. No authoritative reference available. false 8 3 us-gaap_PreferredStockParOrStatedValuePerShare us-gaap true na instant decimal No definition available. false false false false false false false false true 1 true true 0.01 0.01 false false 2 true true 0.01 0.01 false false No definition available. No authoritative reference available. false 9 3 us-gaap_PreferredStockSharesAuthorized us-gaap true na instant shares No definition available. false false false false false false false false false 1 false true 5000000 5000000.00 false false 2 false true 5000000 5000000.00 false false No definition available. No authoritative reference available. false 10 3 us-gaap_ConvertiblePreferredStockSharesReservedForFutureIssuance us-gaap true na instant shares No definition available. false false false false false false false false false 1 false true 700000 700000.00 false false 2 false true 700000 700000.00 false false No definition available. No authoritative reference available. false 11 3 us-gaap_PreferredStockSharesIssued us-gaap true na instant shares No definition available. false false false false false false false false false 1 false true 0 0 false false 2 false true 0 0 false false No definition available. No authoritative reference available. false 12 3 us-gaap_PreferredStockSharesOutstanding us-gaap true na instant shares No definition available. false false false false false false false false false 1 false true 0 0 false false 2 false true 0 0 false false No definition available. No authoritative reference available. false 13 3 us-gaap_CommonStockParOrStatedValuePerShare us-gaap true na instant decimal No definition available. false false false false false false false false true 1 true true 0.01 0.01 false false 2 true true 0.01 0.01 false false No definition available. No authoritative reference available. false 14 3 us-gaap_CommonStockSharesAuthorized us-gaap true na instant shares No definition available. false false false false false false false false false 1 false true 700000000 700000000.00 false false 2 false true 700000000 700000000.00 false false No definition available. No authoritative reference available. false 15 3 us-gaap_CommonStockSharesIssued us-gaap true na instant shares No definition available. false false false false false false false false false 1 false true 173515314 173515314.00 false false 2 false true 169371675 169371675.00 false false No definition available. No authoritative reference available. false 16 3 us-gaap_CommonStockSharesOutstanding us-gaap true na instant shares No definition available. false false false false false false false false false 1 false true 172802114 172802114.00 false false 2 false true 169371675 169371675.00 false false No definition available. No authoritative reference available. false 17 3 us-gaap_TreasuryStockShares us-gaap true na instant shares No definition available. false false false false false false false false false 1 false true 713200 713200.00 false false 2 false true 0 0 false false No definition available. No authoritative reference available. false false 2 13 false Thousands NoRounding Hundreds false true XML 14 FilingSummary.xml IDEA: XBRL DOCUMENT 1.0.0.3 true Sheet 11 - Statement - Statement Of Financial Position Classified Statement Of Financial Position Classified R1.xml false Sheet 12 - Statement - Statement Of Financial Position Classified (Parenthetical) Statement Of Financial Position Classified (Parenthetical) R2.xml false Sheet 13 - Statement - Statement Of Income Alternative Statement Of Income Alternative R3.xml false Sheet 14 - Statement - Statement Of Cash Flows Indirect Statement Of Cash Flows Indirect R4.xml false Notes 15 - Disclosure - Notes to Financial Statements Notes to Financial Statements R5.xml false Sheet 16 - Disclosure - Document Information Document Information R6.xml false Sheet 17 - Disclosure - Entity Information Entity Information R7.xml false Book All Reports All Reports 1 10 0 0 3 128 false false eol_0001193125-09-170630_STD_p6m_20090630_0 83 eol_0001193125-09-170630_STD_p6m_20081231_0 1 eol_0001193125-09-170630_STD_Inst_20080630_0 2 eol_0001193125-09-170630_STD_p3m_20090630_0 20 eol_0001193125-09-170630_STD_Inst_20081231_0 43 eol_0001193125-09-170630_STD_Inst_20090805_0 1 eol_0001193125-09-170630_STD_Inst_20071231_0 1 eol_0001193125-09-170630_STD_Inst_20090630_0 43 eol_0001193125-09-170630_STD_p3m_20080630_0 20 eol_0001193125-09-170630_STD_p6m_20080630_0 55 true true EXCEL 15 Financial_Report.xls IDEA: XBRL DOCUMENT begin 644 Financial_Report.xls MT,\1X*&Q&N$`````````````````````/@`#`/[_"0`&```````````````" M`````0``````````$```Q`````$```#^____```````````"````________ M____________________________________________________________ M____________________________________________________________ M____________________________________________________________ M____________________________________________________________ M____________________________________________________________ M____________________________________________________________ M____________________________________________________________ M____________________________________________________________ M____________________________________________________________ M_______________________]_____O____W___\$````!0````8````'```` M"`````D````*````"P````P````-````#@````\````0````$0```!(````3 M````%````!4````6````%P```!@````9````&@```!L````<````'0```!X` M```?````(````"$````B````(P```"0````E````)@```"<````H````*0`` M`"H````K````+````"T````N````+P```#`````Q````,@```#,````T```` M-0```#8````W````.````#D````Z````.P```#P````]````/@```#\```!` M````00```$(```!#````1````$4```!&````1P```$@```!)````2@```$L` M``!,````30```$X```!/````4````%$```!2````4P```%0```!5````5@`` M`%<```!8````60```%H```!;````7````%T```!>````7P```&````!A```` M8@```&,```!D````90```&8```!G````:````&D```!J````:P```&P```!M M````;@```&\```!P````<0```'(```!S````=````'4```!V````=P```'@` M``!Y````>@```'L```!\````?0```'X```!_````@````%(`;P!O`'0`(`!% M`&X`=`!R`'D````````````````````````````````````````````````` M```````````6``4`__________\"```````````````````````````````` M`````````,"[WJ*:+````GP```*````"A M````H@```*,```"D````I0```*8```"G````J````*D```"J````JP```*P` M``"M````K@```*\```"P````L0```+(```"S````M````+4```"V````MP`` M`+@```"Y````N@```+L```"\````O0```+X```"_````P````,$```#"```` MPP```/[____^_____O__________________________________________ M____________________________________________________________ M____________________________________________________________ M____________________________________________________________ M____________________________________________________________ M______________________________\)"!````8%`$88S0?!@```!@(``.$` M`@"P!,$``@```.(```!<`'``!P``&)R;```!@(````````````````` M```````````````````````````````````````````````````````````` M`````````````````````````````````````````````````````$(``@"P M!&$!`@```,`!```]`0X``0`"``,`!``%``8`!P"<``(`#@`9``(````2``(` M```3``(```"O`0(```"\`0(````]`!(`\`!:`$PLBQHX```````!`%@"0``" M````C0`"````(@`"````#@`"``$`MP$"````V@`"````,0`<`,@```#_?Y`! 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-----END PRIVACY-ENHANCED MESSAGE-----