Subsequent Events

Update on Investments in FireEye

As of March 31, 2014, we held the following securities in FireEye: (i) approximately 309,000 shares of common stock issued pursuant to our exercise of certain warrants on March 4, 2014 (“Warrant Shares”), and (ii) approximately 5.5 million shares of common stock acquired through prior investments by our managed direct venture funds (“Fund Shares”).

Subsequent to March 31, 2014, we sold all of our Warrant Shares resulting in a realized pre-tax loss of $14 million. This loss reflects the decline in the market share price of FireEye from March 4, 2014 (the date of exercise of the FireEye warrants) to the date of sale of the Warrant Shares during the last week of April 2014. (Note that as of March 31, 2014, approximately $8.2 million of this loss was recorded in a separate component of Shareholders' equity reflecting the decline in value of the Warrant Shares from the date of exercise to March 31, 2014).

In addition, from March 31, 2014 to May 7, 2014, the market share price of FireEye’s common stock has decreased by approximately 53% from $61.57 to $28.65. Based on this decrease, we would expect a total decrease in the pre-tax valuation of our Fund Shares, subsequent to March 31, 2014 and through May 7, 2014, of approximately $150 million ($29 million, net of noncontrolling interests). (This is a non-GAAP financial measure. See reconciliation below.)

As such, on a combined basis, if FireEye’s stock price at June 30, 2014 were the same as its price of $28.65 as of close of business on May 7, 2014, the Company would expect to report a loss on its FireEye holdings of $43.0 million on a pre-tax basis.

Investment gains (or losses) relating to the remaining Fund Shares are subject to FireEye’s stock price, which is subject to market conditions and various other factors. Additionally, the gains (and losses) relating to the Fund Shares reported above are currently unrealized, and to the extent such gains (or losses) will become realized is subject to a variety of factors, including among other things, changes in prevailing market prices and timing of any sales of securities, which are subject to our securities sales and governance processes and lock-up agreements (currently scheduled to expire during the second quarter of 2014).

The table below sets forth a reconciliation of the non-GAAP financial measure discussed above:



Non-GAAP losses on investments securities, net of noncontrolling interests (Dollars in millions)	Through May 7, 2014
GAAP losses on certain nonmarketable and other securities	$	150
Less: losses attributable to noncontrolling interests, including carried interest	121
Non-GAAP losses on certain nonmarketable and other securities, net of noncontrolling interests	$	29