Basis of Presentation

In the opinion of the management of Emulex Corporation (Emulex or the Company), the accompanying unaudited condensed consolidated financial statements contain adjustments, which are normal recurring accruals necessary to present fairly the Company’s consolidated financial position, results of operations, comprehensive (loss) income, and cash flows. Interim results for the three and six months ended December 29, 2013 are not necessarily indicative of the results that may be expected for the fiscal year ending June 29, 2014. The accompanying condensed consolidated interim financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2013. The preparation of the condensed consolidated financial statements requires the use of estimates and actual results could differ materially from management’s estimates.

The accompanying consolidated financial statements include the accounts of Emulex and its wholly-owned subsidiaries. Material intercompany transactions and balances have been eliminated in consolidation.

The Company has a 52 or 53-week fiscal year that ends on the Sunday nearest to June 30. Accordingly, every fifth or sixth fiscal year will be a 53-week fiscal year. Fiscal 2014 is a 52-week fiscal year. The last 53-week fiscal year was fiscal 2011.

Supplemental Cash Flow Information



	Six Months Ended
	December 29, 2013		December 30, 2012
	(in thousands)
Cash paid during the period for:
Interest	$	2	$	4
Income taxes	2,803		3,200
Non-cash activities:
Purchases of property and equipment not paid, net	203		275
Accrued payroll tax withholdings for shares issued to employees	43		—
Release of In-Process Research & Development (IPRD) to Developed Technology	8,070		—